Report: AI will be vital to revenue growth for digital organisations
- 11 October, 2018 12:28
Artificial intelligence (AI) is cementing its place in digital commerce, with a recent Gartner survey finding 70 per cent of digital commerce organisations report that their AI projects are very or extremely successful.
Gartner conducted a survey of 307 digital commerce organisations currently using or piloting AI, including 30 in Australia and New Zealand, to understand the adoption, value, success and challenges of AI in digital commerce. The analyst firm found three-quarters of respondents are seeing double-digit improvements in the outcomes they measure, such as customer satisfaction (19 per cent), revenue (15 per cent) and cost reduction (15 per cent).
Gartner also predicts that by 2020, AI will be used by at least 60 per cent of digital commerce organisations and that 30 per cent of digital commerce revenue growth will be attributable to AI technologies.
The survey found a wide range of applications for AI in digital commerce. The top three uses are: Customer segmentation; product categorisation; and fraud detection.
Despite early success, however, digital commerce organisations still face significant challenges implementing AI. The survey shows a lack of quality training data and in-house skills are the top challenges in deploying AI in digital commerce.
On average, 43 per cent of respondents chose to custom-build the solutions developed in-house or by a service provider. In comparison, 63 per cent of the more successful organisations are leveraging a commercial AI solution.
“Digital commerce is fertile ground for AI technologies, thanks to an abundance of multidimensional data in both customer-facing and back-office operations,” said Gartner research director, Sandy Shen. “Solutions of proven performance can give you higher assurance as those have been tested in multiple deployments, and there is a dedicated team maintaining and improving the model.
“Organisations looking to implement AI in digital commerce need to start simple. Many have high expectations for AI and set multiple business objectives for a single project, making it too complex to deliver high performance. Many also run AI projects for more than 12 months, meaning they are unable to quickly apply lessons learned from one project to another.”
To increase the likelihood of success, Gartner advises digital commerce leaders to:
- Assess talent and if there is insufficient AI talent in-house to develop and maintain a high-performance solution, go with a commercial solution.
- Aim for under 12 months for a single AI project. Divide larger projects into phases and aim for under 12 months for the first phase, from planning, development and integration to complete launch.
- Ensure enough funding. Allocate the majority of the budget to talent acquisition, data management and processing, as well as integration with existing infrastructure and processes. Enough funding also helps secure high-performance solutions.
- Use the minimum viable product (MVP) approach. Break down complex business problems and develop targeted solutions to drive home business outcomes. Use AI to optimise existing technologies and processes, rather than to try to develop breakthrough solutions.
Survey respondents included organisations in the US, Canada, Brazil, France, Germany, the UK, Australia, New Zealand, India and China.