Artificial intelligence is coming. Is your business ready?

September 26, 2017

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CEOs see the potential—and the risks. Our strategist’s guide and responsible AI framework can set companies on the right path.

As machines continue to assume many of the tasks that once depended on human agency—such as driving a car or making a decision—we find ourselves looking toward a future in which nearly all technology applications will likely incorporate some form of artificial intelligence (AI). It has already changed the trajectory of scientific research, enabling new creative and technological milestones. At the same time, the rapid advancement of AI technologies has raised fundamental questions about social values and the potential unintended consequences of AI.

A recent PwC survey of CEOs worldwide conducted in mid-2017 reveals that a majority of top executives agree that AI will ultimately impact every facet of business, offering an unprecedented opportunity to innovate and grow companies in nearly every industry. In fact, PwC estimates that AI will drive global gross domestic product (GDP) gains of $15.7 trillion by 2030.

But business leaders also express a range of concerns about AI, starting with its potential to disrupt the companies that these executives operate. Interestingly, our survey found that those most concerned about their businesses’ vulnerability to disruption are the leaders of two types of companies: those that are currently using AI (24% of the total number of companies surveyed), and those that are not yet using it and do not see it as a priority for their businesses (21%).



Determining the right AI strategy

There is a learning curve involved in AI adoption, in which barriers and responsibilities are revealed the more one gains an understanding of the way AI works. Appreciating AI’s challenges and opportunities is an important part of setting your organization’s course. As noted in A Strategist’s Guide to Artificial Intelligence, the optimal approach to AI will vary from one organization to the next. Even within the same enterprise, executives will not apply AI in the same way to every business problem. We have defined four principal ways to apply AI, listed here in order of the simplest to the most advanced application:

  1. Automated intelligence: Improves human productivity by automating manual tasks (e.g., software that compares documents and spots inconsistencies and errors).
  2. Assisted intelligence: Helps people perform tasks faster and better (e.g., medical image classification, real-time operational efficiency improvement).
  3. Augmented intelligence: Helps people make better decisions by analyzing past behavior (e.g., media curation, guided personal budgeting, on-the-fly decision analysis).
  4. Autonomous intelligence: Automates decision-making processes without human intervention while also putting controls into place (e.g., self-driving vehicles, full-fledged language translation, robots that mimic people).

As humans and machines collaborate more intimately in the AI applications of the future, AI’s potential will grow in the number and variation of tasks it can complete. Self-maintaining factories and buildings, algorithm-based customer service representatives that sound and act human, and personalized offerings that anticipate customers’ needs are all feasible in tomorrow’s AI-enabled applications.

Of course, essential to any strategy is determining the ideal mix of AI approaches. This will vary by industry, level of risk tolerance, and how quickly companies need to roll out AI initiatives to achieve their business goals.

AI as business catalyst

There are no clear boundaries among these types of AI; they exist on a continuum. Part of the process of developing an AI strategy is to both assess where you are today and plan for a future of more fully realized autonomous intelligence. In addition to thinking in broad strokes, companies should identify and evaluate their specific pain points that AI can help address.

Embedding AI into specific business processes where it can produce positive results is a good place to start. Over time, it will become natural to integrate AI into any new business initiative. Ultimately, your enterprise-wide AI proficiency should include:

  • Defining who will lead and be accountable for AI initiatives
  • Identifying people in your organization with AI expertise or going outside your organization to recruit talent
  • Determining where AI can add value or address pain points
  • Using AI to enhance the capabilities that are most critical to business success
  • Improving decision-making and other processes with automated intelligence

A responsible approach

The popular perception of artificial intelligence is that of complex, intelligent machines that can beat expert human players in games like Jeopardy! and chess. But games have prescribed rules and well-defined outcomes, and each match ends in a win, loss, or tie. Games are also closed-loop systems whose outcomes affect only the players. The software can be manipulated, and it can fail without posing a serious risk to those involved. That’s not the case with other AI applications, in which risks may include vehicle crashes, factory failures, or inaccurate translations.

One particular concern about AI that CEOs acknowledged in our survey was the possibility that unintended bias could creep into an AI algorithm or decision-making model. A clear majority (76%) of the CEOs we surveyed express concern about this potential pitfall.

What is ultimately needed is a way to mitigate the inherent risks of AI-empowered solutions. It is essential to build trust with users and other stakeholders that such technologies are being operated responsibly and with appropriate controls in place. To work toward that goal, we have developed a responsible AI framework that can help companies ensure appropriate governance of AI. It provides a practical mechanism for ensuring effective monitoring and stewardship of AI outcomes by guiding companies as they:

  • Establish clear policies with respect to data privacy, decision rights, and transparency
  • Set up governance structures to monitor possible errors and problems
  • Develop communications practices to explain AI-related decisions
  • Study the impact of AI on employment and strive to ensure AI complements human knowledge and expertise

AI offers a vast opportunity for business innovation. Inevitably, its emergence will take many of us out of our comfort zones. Approaching it with carefully considered strategies that incorporate responsibility at every step will position CEOs and the organizations they represent to fully reap its benefits.


For an in-depth discussion of these topics, please see:
A Strategist’s Guide to Artificial Intelligence and Accelerating innovation: How to build confidence and trust in AI

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Contacts

Chris Curran

Principal and Chief Technologist, PwC US Tel: +1 (214) 754 5055 Email

Vicki Huff Eckert

Global New Business & Innovation Leader Tel: +1 (650) 387 4956 Email

Mark McCaffrey

US Technology, Media and Telecommunications (TMT) Leader Tel: +1 (408) 817 4199 Email