News: AI adoption by Indian corporates a strategic necessity: IIM BCG report


AI adoption by Indian corporates a strategic necessity: IIM BCG report

The report revealed eye-opening insights on India’s AI potential, with two-thirds of companies lagging behind in investment in AI within their Technology, Data, and Analytical capabilities.
AI adoption by Indian corporates a strategic necessity: IIM BCG report

The Brij Disa Centre for Data Science and Artificial Intelligence (CDSA) at IIM Ahmedabad, in collaboration with Boston Consulting Group's Digital Transformation unit, released a comprehensive report analysing the AI-readiness levels of Indian businesses titled 'AI in India - A Strategic Necessity’. 

The report studied approximately 130 companies operating in the Banking, Financial Services, and Insurance (BFSI), Consumer Goods (CG), and Industrial Goods (IG) sectors. Additionally, a research team conducted comprehensive interviews and surveys with CXOs from organisations of all sizes. Therefore, the study objectively and comprehensively measures a company's ability to leverage AI in order to drive its strategic objectives and enhance its financial and operational performance.  

While releasing the report, Professor Bharat Bhasker, Director of IIMA, stated, "India is poised to enter into a digital revolution where successful AI adoption by our industry can be a crucial determinant of India’s competitiveness globally. Successful adoption of AI could add up to 1.4 percentage points annually to the real GDP growth of India. From the perspective of corporates, the successful adoption of AI is expected to add over a five-year period, INR 1.5-2.5 trillion in incremental pre-tax profit for the top 500 Indian companies alone. This presents an incredible opportunity for the Indian industry and our companies can leverage the widespread internet access and cost-effective labour to move ahead and align themselves to the global AI maturity standards. I am confident that the joint study by the Brij Disa Centre IIM A and BCG will have significant implications for policymakers as well as industry leaders to foster a conducive ecosystem for the adoption of AI by Indian organisations, and their success in translating it into business performance.”

In addition, Sumit Sarawgi, Managing Director & Senior Partner, BCG commented, “Investments into AI could deliver extraordinary returns but success hinges on deploying AI at scale. An organisation-wide commitment is required for the successful AI-driven transformation of the organisation. The reason being the success derived from AI adoption, algorithms drive approximately 10% of the success, while data and technology infrastructure add a further 20%. The remaining 70% hinges on people, processes, and business transformation.” 

Key insights from the study are as under: 

  • Only a few Indian BFSI companies, primarily banks and new-age NBFCs, exhibit exceptionally high AI maturity, comparable to global frontrunners. 
  • The companies based on AI maturity level can be divided into Leaders, Steady Followers, Leapfroggers and Laggards.
  • Only 11% of companies stood as Leaders in AI maturity, facing a stiff challenge from 9% of companies identified as Leapfroggers who started their AI-driven journey late. However, in the last three years, Leapfroggers have made significant progress in AI maturity, converging with the Leaders on most aspects. 
  • However, a concern arose regarding the Laggards, which constitute about two-thirds of the companies, as they have shown limited exposure and investment in AI within their Technology, Data, and Analytical capabilities.

Furthermore, the report provided practical recommendations for companies at a mid-level of AI maturity to advance towards achieving global best-in-class AI standards. In the case of AI adoption leaders, the report emphasises the exploration of upcoming frontiers in AI excellence. The study indicates that investments in AI, which enhance end-user value and contribute to overall revenue growth, have the potential to drive substantial economic expansion and wage increases. India now has the opportunity to seize these benefits, but the challenge lies in transforming the immense potential of AI into reality.

The report also listed actionable guidance for companies with mid-level AI maturity to progress towards global best-in-class AI maturity levels. For leaders in AI adoption, the report focuses on exploring the next frontiers of AI excellence. Research shows that AI investments augmenting end-user value and topline growth could drive significant economic and wage expansion. The opportunity is India’s for the taking—the challenge is now to turn the enormous potential of AI into reality.

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Topics: Technology, #Artificial Intelligence, #HRTech

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