Early AI Apps Seen Generating ‘Business Value’
The rise of AI is reflected in recent market forecasts that predict it will help enterprises develop new products and services around applications like automated decision making.
Market analyst Gartner Inc. forecasts that global “business value” derived from artificial intelligence will reach $1.2 trillion this year as major players and nation-states invest heavily in AI development. The bullish forecast represents a whopping 70 percent annual increase in AI business value.
Gartner’s estimate of AI “business value” includes improved customer experience, cost reduction and, eventually new revenue. (It also notes that there “is no intrinsic business value from experimenting with AI technologies [and] AI must be used as part of a production system before there can be any business value.”)
Taken together, Gartner is forecasting a tripling of AI business value through 2022 totaling nearly $4 trillion.
Along with advances in computational power and volume, velocity and variety of data, the forecast identified deep neural network as a technology driver for the booming AI sector. These and other emerging machine learning technologies are expected to hasten development of AI-enhanced product and services over the next five years.
“Decision support [and] augmentation” is seen as an early application of deep neural networks, representing an estimated 36 percent of global business value during 2018. That total is forecast to jump to 44 percent by 2022, predicted Gartner (NYSE: IT).
Among the specific deep neural network applications are data mining and pattern recognition across ever-expanding data sets. The resulting tools could be used to classify data that could then “feed traditional programming systems,” the market analysts said this week.
The emerging capabilities are seen as critical for automating decision making. “This new level of automation reduces costs and risks, and enables, for example, increased revenue through better microtargeting, segmentation, marketing and selling,” noted John-David Lovelock, Gartner’s research vice president.
“As unstructured data and ambiguity are the staple of the corporate world, decision automation—as it matures—will bring tremendous business value to organizations,” the market analyst added. “For now, decision automation accounts for just two percent of the global AI-derived business value in 2018, but it will grow to 16 per cent by 2022.”
The Gartner forecast meshes with earlier assessments about the potential early applications of AI technology in the enterprise. Forrester Research also predicted late last year that AI implementations would shift toward automated decision-making and “real-time instructions” for improving customer service and other business processes.
While Gartner sees early customer service and cost reduction implementations generating the most AI business value, it predicts that deep learning and other tools will themselves begin generating new revenues—the third leg of its AI business value triad—by 2021. “In the long run, the business value of AI will be about new revenue possibilities,” Lovelock said.