Although artificial intelligence (AI) has been a technology in development for decades, it burst into public consciousness thanks to OpenAI’s ChatGPT, and now generative AI is being infused into processes across the economic landscape.
“Agile companies will take advantage of AI and boost their position. Companies less so will perish,” declared Jensen Huang, the CEO of Nvidia, the leading AI chipmaker, in May during a speech to students graduating from the National Taiwan University in Taipei, according to media reports.
Businesses can’t escape AI and, as a result, many feel under pressure to embrace it or risk being left behind. Around three-quarters of companies (73%) are prioritising AI over other digital investments, according to a survey of 1,700 executives by Accenture. Nine in ten business leaders are using AI in a bid to deliver operational efficiencies
Despite hype being generated by media outlets, and businesses themselves, about the promises of generative AI and how large language models (LLMs) will transform multiple industries, companies need to think twice before jumping on the AI bandwagon.
Understand the problems trying to be solved
The clamour to invest in a technology that is being hyped up, be it AI, the metaverse or Web3, is often a case of the fear of missing out (FOMO).
“Every once in a while, there are watershed moments where everything that comes after is different. The world wide web and the iPhone are just two examples. Generative AI is shaping up to be one of those types of pivotal innovations,” says Brian Fox, CTO at software supply chain management firm Sonatype.
While there’s a logic to get involved early on “because the innovation will happen so quickly that it can be hard to catch up”, companies need to be able to separate pivotal innovation from pure hype, adds Fox.
Filip Kirschner, co-founder of software and product development studio Applifting, says his rule of thumb would be “to always look at how the technology applies to real-world problems”.
Companies should be asking themselves whether a particular technology is going to directly improve people’s lives. If yes, then the technology is worth investigating, adds Kirschner.
Test and seek feedback
With regard to how technology is impacting their own people, CIOs and CTOs need to ask whether it actually makes sense for those who use it and whether it actually helps them to do their job more quickly.
“If the answer to both these questions is undetermined, deployment could lead to cost leakages and even hamper morale of employees,” warns Ben Dilts, CTO of Lucid Software, a leading provider of visual collaboration software.
On this point, CIOs should work with key decision-makers in their IT teams to determine the appetite for a technology. “The non-technical team members, in particular, will have powerful insight on the practicality of a solution. So empower those stakeholders and involve them from the start,” advises Dilts.
Launching a pilot scheme or sandbox can be an effective way to get employees to test a new technology before it’s rolled out more broadly.
Recognise the unpredictability
The rush to buy into a shiny innovation is often driven by thoughts of the immediate impact it can have on the business or how it can be used to attract new customers and win new contracts.
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Back in January, Porsche launched an NFT focused on its iconic 911 sports car range. Not only was the German automaker months late to the NFT party, but it received criticism from the Web3 community for not having consulted a Web3 expert and because reselling the NFT was deemed unprofitable. It illustrates how not fully understanding a new technology can impact a brand negatively.
New technologies can also have their teething issues, which can hamper a company’s ability to leverage value from it. “Recognise that they are still new, completely unpredictable, and that it’s therefore dangerous to completely hang your hat on those things,” says Fox.
Yet even if a new technology were reliable and glitch-free, this doesn’t mean it will have longevity. So, it’s vital to try to determine whether it might have a short shelf-life and could easily be replaced by the next buzziest trend that comes along on a wave of momentum before integrating it into their stack.
“The reality is, technology fads come and go. The ones that are here to stay have plenty of successful use cases and have advanced at a pace that matches today’s business needs,” says Dilts.
Be prepared to take risks
Does this mean companies should hold back and wait to see if and how others succeed with a new technology first?
Well, according to KPMG’s 2022 CEO Outlook survey, 72% of CEOs currently have an “aggressive digital investment strategy, intended to secure first-mover or fast-follower status” despite rising inflation and interest rates having put pressure on IT budgets.
“If you’re the only player in the field, it’s sometimes better to wait a while before introducing the technology and risk your product’s experience and brand. But most of the time you want to be the single company that’s ahead and seen by your customers as an innovator,” says Kirschner, who recommends companies that want to be first-movers to “seek outside validation from technologists before pursuing it”.
Being a first-mover can be inherently risky, but there’s an argument to be made that taking risks is required to achieve business breakthroughs, suggests Fox.
“Your strategy has to be able to walk that fine line between building on things you know are strong, reliable, and around which there’s a lot of expertise, and taking calculated risks in areas that make sense, because the discoveries could be exponentially more beneficial.”
