26 October, 2023

AI and automation: A reality check on infrastructure preparedness



26 October, 2023

AI and automation: A reality check on infrastructure preparedness

AI and automation: A reality check on infrastructure preparedness

Artificial intelligence (AI) and automation. These two concepts have been the talk of the town for quite a while now, heralded as integral factors in gaining a competitive edge in today’s dynamic business world. But, do they really live up to the hype?

Recent statistics from IBM suggest a sobering reality. The ROI on enterprise-wide AI initiatives averages just 5.9%, falling short of the standard 10% cost of capital. As such, many organisations are finding that their investments in these technologies are not delivering on their promise. So what is going on here? Is the tech just not quite as good as we hoped, or are these businesses simply struggling to integrate them into their operations effectively? 

Let’s pull back the curtain and uncover the truth. 

The dual nature of AI and automation implementation 

The promise of transformative value from AI and automation is real. But it only materialises when implemented thoughtfully across both technical and cultural dimensions. Many initiatives fail because companies focus entirely on one aspect while neglecting the other. 

On the technical side, AI and automation integration require robust data pipelines, clean datasets, modernised legacy systems, and specialised human capital. For example, let’s say you invest a large chunk of capital into an AI-powered customer service chatbot. If your backend systems are fragmented, the chatbot may only be able to solve simple issues, delivering minimal value. 

Culturally, AI and automation change how employees work. Organisations must proactively re-skill workers, redefine roles, and address valid concerns about job losses. Again, if you plan to automate a key production process without proper change management, it may lead to low worker morale and productivity, thus diminishing the ROI on your investment.  

The companies that succeed with AI and automation take a dual-pronged approach from the start. They build a solid technical foundation while bringing people along on the journey.  

Recognising real value 

Maximising the ROI of AI and automation requires recognising where real value lies for your specific business. The excitement over AI’s potential can often lead to investing in technology for novelty’s sake rather than economic benefit. However, sustainable innovation comes not from implementing the latest AI capabilities, but from aligning initiatives with tangible business needs.

There are two key indicators that an AI or automation project will drive real value: 

  • It solves a clearly defined business problem. Look for areas of inefficiency, delays, or dissatisfaction that negatively impact operations and profitability. Target projects to root causes.
  • It has a direct measurable impact on key performance metrics. Determine what metrics truly matter for financial, operational, and customer outcomes. Tie projects directly to moving these needles.  

To discern real vs perceived value, take an objective view of proposed AI and automation investments. Measure against your key objectives. If a project has unclear business impact or doesn’t address a real pain point, it may not be the best use of resources. Prioritise investments that will drive tangible improvements. 

The moulding of AI and automation to specific use cases 

The “one-size-fits-all” approach rarely works, especially when it comes to AI and automation. Generic solutions might promise the moon, but often they don’t deliver. The reason? Every business is unique, with its own set of challenges and needs. That’s why it’s crucial to custom-fit your AI and automation strategies to your specific use cases. 

Look at Netflix. Their AI isn’t some off-the-shelf product. It’s specifically tailored to their needs, designed to analyse viewer behaviour and make personalised recommendations. And it works like a charm, keeping you hooked on show after show!

In contrast, companies that implement generic AI solutions often see minimal benefits. The technology fails to improve specific outcomes and people quickly abandon using it. To maximise value, resist the temptation of vanity AI projects. Instead, clearly define use cases and then mould the technology to fit. Partner with implementation experts who will tailor solutions to your organisation. 

The role of infrastructure preparedness in AI and automation 

Robust infrastructure is the crucial foundation for successful AI and automation integration. Yet many businesses struggle with legacy systems and siloed data that hinder implementation. Facing tight budgets and deadlines, some push forward anyway, only to hit roadblocks. The most common infrastructure challenges are: 

  • Fragmented, incomplete datasets spread across systems 
  • Outdated interfaces and inability to pull real-time data 
  • Lack of skills for data engineering and model development 

Without addressing these issues upfront, companies will fight constant technical fires trying to make AI work. Delays and cost overruns follow as deadlines are missed. To avoid this fate, be realistic about your infrastructure readiness. Invest in bringing foundations up to par before full-scale implementations. Key areas to shore up are: 

  • Consolidating datasets into centralised, cloud-based data lakes 
  • Modernising ageing interfaces and APIs for real-time data access 
  • Hiring technical talent or educating internal teams on AI engineering

With the fundamentals in place, AI and automation projects can then build capabilities atop a stable stack. Get ready before leaping in. 

The current state of your business 

So, where does your business stand? Are you on the brink of AI and automation readiness, or are there gaping holes that need to be addressed? It’s time for a candid self-assessment. 

Take a hard look at your current infrastructure, your corporate culture, and your specific business needs. Do you have the necessary data and computing power? Is your team ready to embrace AI? Are your use cases clearly defined? By identifying any weaknesses now, you can start working on solutions and set your business up for AI and automation success. 

How we can help 

At Davies, we know what it takes to drive real returns from AI and automation. With vast experience implementing solutions tailored to client’s specific needs, we ready organisations on both technical and cultural fronts. Our experts perform in-depth infrastructure assessments, identify high-value AI applications, and involve stakeholders at every step. Get in touch with us today to discuss how we can help maximise your AI and automation ROI through comprehensive strategic preparation. 

Mat Paixao
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