Dive Brief:

• Companies that are farther along in digitizing core parts of their businesses report higher rates of artificial intelligence (AI) usage in more business functions compared to peer companies and are investing more heavily in AI, according to a recent McKinsey Global Survey.
• Nearly half of the 2,135 respondents said their organizations have adopted at least one AI function into their standard business processes, while another 30% reported AI pilot programs. The companies don't expect AI to result in widespread headcount reductions.
• The survey found many organizations report they don't have fundamental processes in place to scale the use of AI by identifying opportunities for using AI and sourcing the data required for intelligent processes.

Dive Insight:

Digitally savvy companies lead the way on adopting AI with 67% of the most digitized companies saying they added AI into standard business processes. For all other companies, only 43% said they have adopted AI in some format.

However, most companies are still figuring out their strategies for embedding artificial intelligence into their business processes, according to the survey. Respondents identified the lack of a clear company strategy as the biggest barrier to AI adoption. Other top challenges include a lack of talent, functional silos that constrain interdepartmental solutions and a lack of executive commitment and ownership to implement AI across the company.

The survey focused on nine business capabilities that could benefit from AI:

• Natural language text understanding
• Natural language speech understanding
• Natural language generation
• Virtual agents or conversational interfaces
• Computer vision
• Machine learning
• Physical robotics
• Autonomous vehicles
• Robotic process automation (RPA)

At least 20% of the companies have adopted one of the functions so far. Overall, physical robotics and autonomous vehicles are the least commonly deployed, because they are used only in relevant industry sectors, such as manufacturing and supply chain and logistics. For example, half of the respondents in automotive and assembly said robots are embedded in at least one function or business unit, compared with 16% of the total average.

In the supply chain sector, the presence of AI-enabled robots and automated guided vehicles has grown as companies test and adopt smart technology including inventory-taking drones and driverless warehouse carts.

Supply chain management was the third highest sector in terms of value from AI adoption, behind manufacturing and risk. In the McKinsey survey, 76% of respondents in supply chain companies said they have already received moderate to significant value from AI, compared to 80% in both manufacturing and risk.

Respondents said AI wouldn't affect the number of employees within the next three years or so. In fact, digital leaders expect headcount to increase rather than decrease. In contrast, research from Forrester predicts that robotics and artificial intelligence will replace 12 million U.S. jobs by 2025.