Author: Rain Newton-Smith,CBI Chief Economist
It’s hard to separate the hype from facts, especially when it comes to new technology. With so much attention given to Artificial Intelligence in the media, it’s no wonder many companies feel overwhelmed and are holding off on investing until the frenzy dies down and a clear business case emerges.
This scepticism is warranted, but only to an extent. AI may have varying potential for different industries, but that also means it’s the perfect time to explore its relevance for your organisation. If the UK is to compete with other global tech hubs, and particularly with Silicon Valley where VC funding grows on trees, we must take matters into our own hands and be unafraid to experiment with new ways of working.
Encouragingly, the CBI’s research found that 25% of UK businesses have invested in AI technologies or plan to do so in the next five years. There is also a widespread acceptance that we’ve only begun to scratch the surface of what’s possible. For instance, many of the retailers we work with believe AI will have an even bigger impact on their industry than analysts expect, from smarter online chatbots to advanced warehouse automation with the potential to transform their supply chain.
This begs the question of where to start. There is certainly an imperative to invest in new ways of working, but this investment still needs to be strategic. When it comes to AI, this means looking at your operations and the roles within your organisation and determining which routine tasks or time-draining processes can be automated.
For some companies, it might be easiest to draw inspiration from other businesses, or from other industries. Take the automotive sector, which has made great strides in its use of automation and Artificial Intelligence. According to a McKinsey report, car manufacturers around the world stand to save $215 billion in the short to medium-term by optimising their value chain processes with AI.
There are of course barriers to investing in new technologies. Small and medium-sized businesses in particular tend to think the cost of finance is higher than it is in reality. In truth, interest rates in the UK are lower than ever at the moment, which has brought down risk and made long-term technology investments more feasible.
This is not meant to advocate irresponsible spending, but rather to highlight that despite a climate of socio-political uncertainty, conditions in the UK are ideal for companies looking to experiment with new technologies. The CBI is also throwing its weight behind AI, having recently called on the Government to establish a joint commission with the aim of assessing the technology’s impact on people, jobs and the economy.
It’s worth making one more point around ownership. Any company that wants to approach AI strategically needs a guide, someone with both the technical skills and vision to understand where new technologies are going and how they can best serve the business. Appointing a qualified individual to take on this role needs to be a priority.
If you haven’t already, listen to The Oracle Business Podcast ‘Technology fact, or future fiction?’ episode.
You can also find out how Oracle Cloud technology has helped other growing businesses like yours by reading Oracle’s Modern Business Magazine.