More investment, less talk needed to drive AI adoption: Microsoft

• Digital transformation, AI, analytics growing in importance
• Real investments, leadership belief needed to spearhead adoption

NEWS ANALYSIS: A recent poll conducted by research firm IDC and sponsored by Microsoft Corp suggests that artificial intelligence (AI) will play a big part in improving innovation and productivity.

But despite the optimism expressed, there are still some impediments that prevent AI adoption amongst enterprises in Malaysia, according to officials involved in the research.

The perception-based study dubbed “Future Ready Business: Assessing Asia Pacific’s Growth Potential Through AI” is part of a larger study of Asian organisations commissioned by Microsoft that IDC surveyed. It involved over 1,600 business leaders and over 1,580 workers across 15 markets in Asia Pacific. In Malaysia, 100 business leaders and 100 workers were polled.

The research noted that in Asia, 80% of business leaders agreed that AI is instrumental for their organisation’s competitiveness but only 41% of organisations in the region have embarked on their AI journeys. The organisations that have adopted AI expect it to increase their competitiveness 100% by 2021.

In Malaysia, seven in 10 business leaders polled agreed that AI is instrumental for their organisation’s competitiveness but only 26% of organisations in Malaysia have embarked on their AI journeys. Also tellingly, some 29% of respondents say AI is “not important and is largely hype.”

Speaking to the media to reveal the survey findings, Microsoft Malaysia managing director K Raman (pic, above) further noted that only 2% of respondents have adopted AI as a core part of their strategy and merely 24% have started to experiment with AI as part of their strategy.

“And 40% are waiting for AI to mature before incorporating it into their strategy, while 34% have not started to consider AI as part of their strategy,” he said.

Quizzed as to why this is so, Raman alluded to three barriers to adoption. They are: lack of thought leadership and commitment to invest in AI; lack of skills, resources and continuous learning programmes; and the lack of advanced analytics or adequate infrastructure and tools to develop insights.

Pressed further as to why the adoption figures were so dismal, Raman said, “From my personal experience in dealing with a lot of organisations, developing a strategy is one thing but having an execution piece and putting your money where your mouth is, is really the other piece, if I can put it bluntly.

“When we interview the decision-makers in Asia Pacific and Malaysia, a lot of people today will not tell you they do not have a strategy, and if you ask any business leader, they will tell you they have a strategy.

“But if you go further and ask do you have money put aside for an execution plan or are you really investing in people, creating a different team to be led by say a chief digital officer (CDO), or even a chief AI officer, what we’ve seen is that there isn’t [follow through] behind the investment.

“And perhaps that’s why we see in Malaysia, there may be a stated strategy but the investment and execution is missing.”

IDC research director for Asia Pacific Datacentre Group Jun-Fwu Chin (pic, above), who was part of the study team, pointed out that a lot of IT investment today is done on a short-term basis and focused on return-on-investment (ROI), cost reductions and optimisation rather than on the monetisation perspective.

“This is particularly clear when we have conversations with C-level executives,” he pointed out. “How do CIOs get more IT budgets? By pitching for a budget for emerging technologies such as AI.”

Arguing that they may likely get that budget, Chin said such moves are only piecemeal at best and aren’t strategic.

“Approaching budgets this way is not investing on a strategic level — it’s just a method to get more IT budget, which is then used to purchase computing or infrastructure availability instead of investing on AI holistically. This still happens very commonly.”

Dr Karl Ng (pic), director of data economy for Malaysia Digital Economy Corporation (MDEC), added that when an organisation implements AI or for that matter any technological transformation, the key point is that, there must be thought leadership.

“One should not be merely paying lip service and just saying, ‘Yes, I’m going to do this’ but they must actually do it,” Ng argued.

When asked, what the panacea is for addressing these issues, Microsoft’s Raman said based on the findings of this study, what is becoming clear is that the tech intensity culture in any organisation is of paramount importance.

“Beyond the technical culture in driving the growth mindset and collaboration, organisations must be structured in how they train their workforce to use technology in a productive manner.

“They would need to foster an environment that encourages tech intensity such as developing centres of excellence to encourage collaborators to try new ideas and pilot projects and speeds this process up.

“Finally, you’ll need leadership to believe in the need for an innovation culture and help drive this across the whole organisation.”

Ng added, “Top management must actually take action, develop an AI or digital transformation strategy, put resources and money in place, and get an actual person – chief AI officer, CDO or chief technical officer (CTO) to drive it.

“Complementing this is the need to execute properly,” he argued. “There must be right tools and right platforms to be able to put resources in place.”