Challenges and Opportunities in Implementing Artificial Intelligence in Businesses: A TCS Study

Artificial intelligence (AI) is the buzzword of the tech world, with companies eager to integrate it into their businesses for increased efficiency and productivity. However, a recent study by Tata Consultancy Services (TCS) has revealed that while companies are enthusiastic about AI, they are struggling to assess its implementation effectively.

According to the TCS business study, nearly three-fourths (72%) of companies feel the need for a better way to evaluate the success of their AI implementations. Despite their high desire to become “AI-ready,” many companies are still grappling with key aspects such as revamping their operating models and measuring the impact of AI on their business operations.

TCS defines AI as generative AI, as well as established tools like predictive analytics, forecasting, machine learning, simulation, and robotics. Business executives emphasize the importance of demonstrating the return on investment in generative AI through performance indicators to justify their budget allocations.

While companies understand the transformative potential of AI, only 17% are actively discussing and planning for its enterprise-wide implementation. However, 55% of businesses are already adapting their business models, offerings, and sales strategies in anticipation of the AI revolution.

The potential rewards of AI adoption are significant, with the genAI industry projected to grow to $1.3 trillion in the next decade, up from $40 billion in 2022. Despite the high costs associated with building large-scale language models, more than half of companies are planning to develop their own enterprise-specific AI models.

To mitigate costs and leverage expertise, companies are turning to external vendors for AI implementation. TCS found that 23% of non-tech entities and 27% of technology companies are utilizing external vendors for their AI projects.

The growing interest in AI is reflected in the surge of AI-focused startups and private investments in the field, which have skyrocketed to $25.2 billion since 2022, according to Stanford University’s AI Index Report.

TCS conducted its AI for Business Study with insights from 1,272 companies across 12 industries and 24 countries. The study included interviews with CEOs, division heads, and product owners at the vice president or senior vice president level, providing a comprehensive view of the current state of AI adoption in the business world.