A report just published by Accenture suggests that organizations that made substantial investments in IT have been generally weathering the economic storm brought on by the COVID-19 pandemic.
Conducted in collaboration with the research firm Oxford Economics Intelligent Operations, the global survey of 1,100 senior-level executives classified respondents in four categories spanning different levels of operations maturity: stable (2%), efficient (32%), predictive (59%), and future-ready (7%).
The small number of organizations that achieved future-ready classification are nearly twice as efficient and three times more profitable than their peers is the same vertical industry. Accenture surmises in the report that if more organizations achieved the same level of future-ready status, roughly $5.4 trillion of additional economic value could be unlocked.
The small number of future-ready organizations identified in the study were ranked highly for speed of innovation (83%), employee engagement/retention (80%), customer experience (75%), business value from data (73%), and employee talent and reskilling (68%).
The same companies ranked highly when it came to IT investments such as cloud (90%), machine intelligence (71%), automation at scale (67%), smarter data (52%), and agile workforce (34%). More than two thirds (78%) also noted they are exploring new areas to scale and maximize the value of their cloud investments, while 63% said they expect to scale AI practices by 2023.
Overall, the Accenture report notes organizations that were able to move one higher maturity level in 2020 were 7.6% more efficient in terms of lower operating expenses per dollar of revenue and 2.3 percentage points more profitable in terms of EBITDA as a percentage of revenues than they were three years ago.
Also read: AI to Become Mainstream in 2021
The AI Push in IT
While mileage certainly varies from one organization to another as they invest in IT, it’s already apparent investments in areas such as AI are about to have a profound impact, notes Manish Sharma, group chief executive of Accenture Operations.
Unfortunately, many business leaders are under the impression that investments in AI are about to automate processes to the point that company hiring is about to sharply decline. Those assumptions, however, are based on a level of AI capability that is not likely to be attained any time soon. Instead, as more low-level tasks become automated organizations will need to train employees how to apply AI in a way that makes the organization more competitive, adds Sharma.
In effect, Sharma says, business leaders will need to up-level skills across the organization. AI isn’t going to replace the need for people in the near future. Rather, smart businesses will employ AI to augment individuals that have a deep understanding of how their processes work.
“Good leaders know it’s always about maximizing talent,” says Sharma.
That doesn’t mean AI won’t have a profound impact on the tasks employees routinely handle today. However, the organizations that teach their employees how to effectively apply AI are the ones that will be in the best position to dominate their sectors. In contrast, organizations that limit their AI efforts to automating processes to reduce costs are merely racing to a bottom that is all but guaranteed to end badly.