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AI to be worth $1.2 trillion this year, says Gartner.

Global business value derived from artificial

intelligence (AI) is projected to total $1.2 trillion in 2018, according to

Gartner.

The market is expected to grow 70% from last year, and to

continue to grow to reach $3.9 trillion in 2022.

Gartner said that AI presented three different sources of business

value including an indirect costs due to use of AI in Customer Experience

deployments, increased sales of existing products or services or opening up new

opportunities, and cost reduction in production and delivery.

"AI promises to be the most disruptive class of technologies

during the next 10 years due to advances in computational power, volume,

velocity and variety of data, as well as advances in deep neural networks

(DNNs)," said John-David Lovelock, research vice president at Gartner.

"One of the biggest aggregate sources for AI-enhanced

products and services acquired by enterprises between 2017 and 2022 will be

niche solutions that address one need very well. Business executives will drive

investment in these products, sourced from thousands of narrowly focused,

specialist suppliers with specific AI-enhanced applications."

AI business value growth shows the typical S-shaped curve

pattern associated with an emerging technology. In 2018, the growth rate is

estimated to be 70%, but it will slow down through 2022 to 17%. After 2020, the

curve will flatten, resulting in low growth through the next few years.

"In the early years of AI, customer experience (CX) is the

primary source of derived business value, as organizations see value in using

AI techniques to improve every customer interaction, with the goal of

increasing customer growth and retention. CX is followed closely by cost

reduction, as organizations look for ways to use AI to increase process

efficiency to improve decision making and automate more tasks," said Lovelock.

"However, in 2021, new revenue will become the dominant

source, as companies uncover business value in using AI to increase sales of

existing products and services, as well as to discover opportunities for new

products and services. Thus, in the long run, the business value of AI will be

about new revenue possibilities."

Breaking out the global business value derived by AI type,

decision support/augmentation (such as DNNs) will represent 36% of the global

AI-derived business value in 2018. By 2022, decision support/augmentation will

have surpassed all other types of AI initiatives to account for 44% of global

AI-derived business value.

"DNNs allow organisations to perform data mining and pattern

recognition across huge datasets not otherwise readily quantified or

classified, creating tools that classify complex inputs that then feed

traditional programming systems. This enables algorithms for decision support/augmentation

to work directly with information that formerly required a human classifier,"

said Lovelock. "Such capabilities have a huge impact on the ability of

organizations to automate decision and interaction processes. This new level of

automation reduces costs and risks, and enables, for example, increased revenue

through better micro-targeting, segmentation, marketing and selling."

Virtual agents allow corporate organizations to reduce labour

costs as they take over simple requests and tasks from a call centre, help desk

and other service human agents, while handing over the more complex questions

to their human counterparts. They can also provide uplift to revenue, as in the

case of robo-advisors in financial services or upselling in call centres. As

virtual employee assistants, virtual agents can help with calendaring,

scheduling and other administrative tasks, freeing up employees' time for

higher value-add work and/or reducing the need for human assistants. Agents

account for 46% of the global AI-derived business value in 2018 and 26% by

2022, as other AI types mature and contribute to business value.

Decision automation systems use AI to automate tasks or

optimize business processes. They are particularly helpful in tasks such as

translating voice to text and vice versa, processing handwritten forms or

images, and classifying other rich data content not readily accessible to

conventional systems. As unstructured data and ambiguity are the staple of the

corporate world, decision automation - as it matures - will bring tremendous

business value to organizations. For now, decision automation accounts for just

2% of the global AI-derived business value in 2018, but it will grow to 16% by

2022.

Smart products account for 18% of global AI-derived business

value in 2018, but will shrink to 14% by 2022 as other DNN-based system types

mature and overtake smart products in their contribution to business value.

Smart products have AI embedded in them, usually in the form of cloud systems

that can integrate data about the user's preferences from multiple systems and

interactions. They learn about their users and their preferences to

hyperpersonalize the experience and drive engagement.

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Publication:ITP.net
Date:May 2, 2018
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