AI - how much of it is hype?
Despite heavy investment in AI, many corporate AI strategies are failing.
Many business executives I speak with are also underwhelmed by the value being delivered from their AI investments.
A major culprit is the mishandling of data, but there are greater reasons why AI initiatives are failing, and they are very varied.
1. Poor Data Quality
Data quality is crucial for AI performance. According to Gartner, poor data quality costs organisations $12.9 million annually. AI systems trained on flawed or irrelevant data produce unreliable results, leading to incorrect insights and failed outcomes. A data governance strategy for data capture and production is essential.
2. Data Silos
Siloed data restricts AI's full potential. McKinsey found that organisations with integrated, cross-functional data are 4.5 times more likely to succeed with AI. Fragmented data limits AI's ability to generate comprehensive insights, leaving initiatives disconnected from broader business goals.
3. Compliance and Privacy Issues
Another key barrier is regulatory hurdles around data privacy. Forrester highlights that 54% of global enterprises face privacy concerns when adopting AI. Compliance with regulations like GDPR is critical, as mishandling personal data can halt AI initiatives and expose companies to legal risks.
4. Underinvestment in Data Infrastructure
Many organisations underinvest in data infrastructure, undermining their AI ambitions. Deloitte reports that while 76% of companies acknowledge the need for stronger data infrastructure, only 30% are actively addressing it. AI needs a scalable, secure data foundation to thrive.
5. Lack of Alignment Between Data and Business Objectives
AI projects often fail due to misalignment between data science teams and business objectives. According to Harvard Business Review, 85% of AI initiatives fail because of gaps in communication between these teams. Clear goals and collaboration are essential for success.
Any business now needs to consider AI's potential; from what I've been told, it is difficult to obtain impartial guidance or advice.
If your business wants to learn more, I can help, contact me here.
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