AI and Automation Boost Productivity and Resilience in Mid-Market Organizations
Artificial intelligence (AI) and automation have become buzzwords in recent years, with varying opinions on their potential impact. However, amidst these debates, the true purpose of AI often gets overlooked—the urgent need to address productivity challenges. The hope is that AI and automation can help solve the productivity paradox that has plagued economies worldwide.
According to Goldman Sachs analysts, AI has the potential to deliver a significant increase in global GDP and lift productivity growth. They predict that AI could contribute to a 7% increase in global GDP and drive a 1.5 percentage point boost in productivity growth over a decade.
Interestingly, despite technological advancements, productivity has declined since the computer era. This productivity paradox raises questions about whether AI can reverse this trend. The Brookings Institute highlighted that labor productivity experienced significant growth until the 1970s. Since then, it has slowed down, despite growth in the 1990s. The advent of the PC and the internet did not fully address productivity challenges.
AI and automation hold the promise of being as disruptive as previous major technologies. However, it remains to be seen if this disruption will lead to tangible productivity gains. Goldman Sachs economists suggest that automation and AI could lead to significant changes in workflows, with up to 300 million full-time occupations affected and between 25% to 50% of U.S. occupations witnessing their workloads being taken over by automation.
Contrary to the doom and gloom perspective, AI can have a positive impact. The Brookings Institute article referenced various studies that showcased how AI improves productivity. For instance, experienced call center workers became 14% more productive using generative AI tools, while inexperienced workers achieved over 30% productivity gains.
However, Goldman Sachs analysts caution that it could take up to a decade for the full benefits of AI to materialize. Therefore, organizations must invest in AI today to reap future rewards. Doing nothing comes with substantial costs and threatens organizational resilience. AI and automation should not be perceived as wholesale threats; instead, they can enable companies to become more resilient. In an increasingly fast-paced world, organizations that use AI to analyze information in real time or automate processes can adapt quickly and thrive.
For mid-market organizations lacking the resources of their larger competitors, the challenge lies in effectively incorporating AI. To achieve the necessary organizational resilience, businesses must recognize that AI and automation will fundamentally transform company structures, culture, and operations. This transformation will necessitate investment in intangible goods, such as business processes and new skills, as highlighted by the Brookings Institute. However, one additional imperative must also be considered: data gravity.
Data remains a significant concern in the age of AI. Is the data accurate and reflective of the entire demographic? Is it transparent? Confidence in data integrity is crucial, especially when it comes to the decisions made by autonomous systems. Would a mid-market organization trust its financial processes to AI if it lacked confidence in the quality of the inputted data?
To keep pace with AI, systems must access information within an organization’s different IT infrastructure. This data must be secure, maintain integrity, and remain unbiased. Agile data is a requirement for AI. Hence, organizations should adopt a data gravity strategy that consolidates all data into a central hub, creating a unified view.
With a robust data foundation, organizations can achieve the agility necessary for intelligent transformation using AI and automation tools, thereby driving productivity. This allows teams to reevaluate business processes and streamline them. For instance, AI assistants can trigger invoice processing, auto-populate forms, and prompt human approval, streamlining invoicing procedures significantly.
While the evolution of the relationship between AI and people remains intriguing, the primary focus should be on empowering employees to regain time and equipping them with insights to better serve customers. This approach enables organizations to identify new opportunities rapidly, a crucial aspect for CEOs aiming to respond to evolving market conditions. Mid-sized organizations that traditionally lacked resources to explore diverse market opportunities can leverage AI and core systems to drive revenue growth, operational efficiencies, and profitability. Establishing the right foundations can create opportunities for a new generation of mid-sized companies.
The message is clear: Embrace AI and automation today as part of the organizational resilience strategy, underpinned by a robust data gravity approach. Implementing AI correctly can allow your business to operate at the speed of AI.
[Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs, and technology executives.]
