g-f(2)5 McKinsey Global Survey: The state of AI in 2020

Extra-condensed knowledge

• A small contingent of respondents coming from a variety of industries attribute 20 percent or more of their organizations’ earnings before interest and taxes (EBIT) to AI. These companies plan to invest even more in AI in response to the COVID-19 pandemic and its acceleration of all things digital. 
• This could create a wider divide between AI leaders and the majority of companies still struggling to capitalize on the technology; however, these leaders engage in a number of practices that could offer helpful hints for success. 
• And while companies overall are making some progress in mitigating the risks of AI, most still have a long way to go.

Genioux knowledge fact condensed as an image.

Condensed knowledge 

• About the research. The online survey was in the field from June 9 to June 19, 2020, and garnered responses from 2,395 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. Of those respondents, 1,151 said their organizations had adopted AI in at least one function and were asked questions about their organizations’ AI use. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP. McKinsey also conducted interviews with executives between May and August 2020 about their companies’ use of AI. All quotations from executives were gathered during those interviews.
• Since our 2019 survey, artificial intelligence has become more of a revenue driver. Companies earning the most from AI plan to invest even more in response to COVID-19—and perhaps widen the gap with others.
• The results of this year’s McKinsey Global Survey on artificial intelligence (AI) suggest that organizations are using AI as a tool for generating value. Increasingly, that value is coming in the form of revenues. A small contingent of respondents coming from a variety of industries attribute 20 percent or more of their organizations’ earnings before interest and taxes (EBIT) to AI. These companies plan to invest even more in AI in response to the COVID-19 pandemic and its acceleration of all things digital. This could create a wider divide between AI leaders and the majority of companies still struggling to capitalize on the technology; however, these leaders engage in a number of practices that could offer helpful hints for success. And while companies overall are making some progress in mitigating the risks of AI, most still have a long way to go.
• AI adoption and impact. 
• While the latest findings show no increase in AI adoption, some companies are capturing value from AI at the enterprise level, and many are generating revenue and cost reductions at least at the function level.
• 50 % of respondents report that their companies have adopted AI in at least one business function.
• By industry, respondents in the high-tech and telecom sectors are again the most likely to report AI adoption, with the automotive and assembly sector falling just behind them (down from sharing the lead last year). 
• The business functions in which organizations adopt AI remain largely unchanged from the 2019 survey, with service operations, product or service development, and marketing and sales again taking the top spots.
• Within these functions, the largest shares of respondents report revenue increases for inventory and parts optimization, pricing and promotion, customer-service analytics, and sales and demand forecasting. More than two-thirds of respondents who report adopting each of those use cases say its adoption increased revenue. The use cases that most commonly led to cost decreases are optimization of talent management, contact-center automation, and warehouse automation. Over half of respondents who report adopting each of those say the use of AI in those areas reduced costs.
• What separates the best from the rest. Companies seeing the highest bottom-line impact from AI exhibit overall organizational strength and engage in a clear set of core best practices. The companies seeing the most value from their use of AI report several strengths that set them apart from other respondents. 
• Better overall performance. The findings suggest that companies seeing more EBIT contribution from AI experience better year-over year growth overall than do other companies. Respondents at high-performing companies are nearly twice as likely as others to report EBIT growth in 2019 of 10 percent or more.
• Better overall leadership. Respondents at AI high performers rate their C-suite as very effective more often than other respondents do. They also are much more likely than others to say that their AI initiatives have an engaged and knowledgeable champion in the C-suite.
• Resource commitment to AI. Responses show that AI high performers invest more of their digital budgets in AI than their counterparts and are more likely to increase their AI investments in the next three years. High performers also tend to have the ability to develop AI solutions in-house—as opposed to purchasing solutions— and they typically employ more AI-related talent, such as data engineers, data architects, and translators, than do their counterparts. They also are much more likely than others to say their companies have built a standardized end-to end platform for AI-related data science, data engineering, and application development.

Category 2: The Big Picture of the Digital Age

[genioux fact extracted from McKinsey]

Authors of the genioux fact

Fernando Machuca

References

Global survey: The state of AI in 2020, McKinsey, November 2020.

ABOUT THE AUTHORS

The survey content and analysis were developed by Tara Balakrishnan, a consultant in McKinsey’s Silicon Valley office; Michael Chui, a partner of the McKinsey Global Institute and a partner in the San Francisco office; Bryce Hall, an associate partner in the Washington, DC, office; and Nicolaus Henke, a senior partner in the London office.