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Companies are rushing to use AI – but few see a payoff

With some DHL In the shipping centers, artificial intelligence is now helping employees ensure that pallets are safely loaded onto cargo planes. A computer vision system captures each pallet and an algorithm assesses whether it can be stacked with other pallets or is too cumbersome to fit on the next flight.

DHL is one of a growing number of companies using AI. In addition to the pallet scanning system, AI helps route deliveries, control robots that move packages around warehouses, and control an experimental robotic arm that picks and sorts packages. According to a new report, DHL is also among a small minority of companies using AI – just 11 percent – who say they have achieved a significant return on investment using the technology.

The Boston Consulting Group and MIT Sloan Management Review report is one of the first to examine whether companies can benefit from AI. His sobering finding offers a dose of realism amid the recent AI hype. The report also offers some clues as to why some companies benefit from AI and others appear to be pouring money down the drain.

One key: keep experimenting with AI even if an initial project doesn't bring much payoff. The authors say that the most successful companies learn from the early adoption of AI and adapt their business practices based on the results. 73 percent of those who did this most effectively say their investments are paying off. Companies in which employees work closely with AI algorithms – learn from them but also help to improve them – also performed better, according to the report.

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"The people who really get value step back and let the machine tell them what they can do differently," says Sam Ransbotham, a professor at Boston College who co-authored the report. He says there is no simple formula for achieving a return on investment, but adds that "the essentials don't blindly apply AI" to a company's processes.

AI became a buzzword for businesses after research showed how machine learning algorithms can perform certain tasks with superhuman abilities – if enough training data and computing power are provided. In recent years it has become clearer that AI often still needs a helping hand from people in order to perform well.

The new study surveyed 3,000 managers in companies in various industries, as well as executives and academics. More than half of managers – 57 percent – said their company is piloting or using AI, up from 44 percent in 2018.

This is far more common than suggested in a recent U.S. census report that found that relatively few companies across the economy have started using AI. The BCG report focused on larger companies, most with annual sales in excess of $ 100 million. The more companies use AI, the more effective the use of the technology becomes.

The BCG report identified a sizeable return on investment of $ 100 million in new revenue or cost savings per year for companies with annual sales of $ 10 billion or more. A sizeable return on investment of $ 20 million has been defined for companies with revenues between $ 500 billion and $ 10 billion. For companies with sales between $ 100 million and $ 500 million, the threshold was $ 10 million.

"We can see that this mixture of man and machine brings companies good performance."

Sam Ransbotham, professor at Boston College

The researchers behind the study used machine learning (of course) to analyze the survey results and identify key insights from companies that see a significant return on investment for AI.

The report highlights companies that have implemented AI as part of a broader rethinking of how they work and have seen higher returns as a result. Repsol, for example a Spanish energy and utility company, uses AI to identify problems with its drilling operations. coordinate the blending, storage and delivery of oil; and to automatically generate offers for customers. However, according to the report, Repsol benefits most from how it learns from these processes and, as a result, adopts new business practices.