IoT, AI have positive impact on business but costs, security concerns remain: Study
Decision makers are optimistic about the impact of artificial intelligence, Internet of Things, predictive analytics and blockchain on business and society, but costs, security concerns and lack of skills are barriers to adoption, a new study by Tata Communications has stated.
Titled ‘The Cycle of Progress,’ the study revealed that leaders differ vastly from managers on their organisation’s digital transformation.
According to the study, 41% of board members and 33% of C-level respondents believe that they lead in the adoption of new technologies, in comparison to just 18% of directors and 14% of department heads.
Decision makers in Europe and North America are more optimistic about the potential of digital solutions to boost their competitiveness compared with their peers in Asia and the Middle East, the study stated. Yet, the perceived high cost of innovation, lack of skills and the threat of cyberattacks are major barriers to digital transformation globally.
The bi-annual study aims to assess the power and potential of digital infrastructure in the global digital economy by tracking decision makers’ views around emerging technologies.
The study found that decision makers see a significant positive impact from IoT (48%), predictive analytics (43%) and AI (43%). It also suggested that business leaders in the West tend to have a less optimistic view on AI than their Eastern counterparts. For example, decision makers in Germany and the UK see AI as having a little or negative impact (29% in both countries), whereas Indian decision makers see it as having a significant or slight positive impact (95%).
“'The Cycle of Progress’ sounds a warning call for businesses, with a clear ‘perception versus reality’ gap emerging between different levels in organisations, as innovation gathers momentum,” said Srinivasan CR, chief digital officer, Tata Communications.
He added that this disparity highlights that directors and business unit heads must get better at informing the CEO of any challenges they face when rolling out new technologies such as IoT and AI.
“CEOs should ask their teams more probing questions and not get carried away by the digital transformation hype. This reality check will help businesses make the most of the latest technology innovations to deliver new customer experiences and reimagine how they operate,” he said.
The study suggested that some technologies are fast becoming ubiquitous in large and small organisations alike. IoT (53%), predictive analytics (51%), AI (46%) and blockchain (44%) are the most widely adopted in the respondents’ organisations, with sales and marketing and customer service leading in the use of these technologies as compared to the finance, human resources and legal departments.
The study also showed that decision makers in Asia and the Middle East have seen greater benefits than those in Europe and North America after deploying these technologies. For example, 41% of decision makers in Singapore have seen new sources of revenue after deploying IoT, compared with just 24% of those in Germany and 19% in the UK. Similarly, 40% of decision makers in the UAE and Saudi Arabia say that the adoption of blockchain has made their business more secure, compared with just 16% in the UK.
The findings of this independent and private study are based on over 1,600 business decision makers, drawn from organisations with over 250 employees or operations in more than one country. The respondents are based in Germany, France, the UK, Hong Kong, Singapore, India, UAE, Saudi Arabia, US and Canada. The inaugural study was completed in October 2018 and asked participants a mix of questions on the impact of technology in the preceding and forthcoming six months.