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APAC enterprises are just getting started on AI

Despite clear benefits of adopting the technology, only 41% of enterprises in the Asia-Pacific region have embarked on their artificial intelligence journey

Singapore-based Sembcorp is what many would consider to be a leader in harnessing artificial intelligence (AI) across its business.

Over the past year, the utilities, marine and urban development company has built up a significant data science team from scratch to solve problems such as reducing downtime of its power systems.

“We are also using machine learning techniques to forecast and predict commodity and grid prices, so we can make better procurement decisions and decisions on how we allocate our capital,” said Matthew Friedman, chief digital officer of Sembcorp.

Across the Asia-Pacific (APAC) region, enterprises such as Sembcorp, which have incorporated AI into their core business strategy and are reaping improvements, are far and few between, accounting for just 6% of organisations polled by IDC in a survey commissioned by Microsoft.

“AI is a game-changer and is key to driving competitiveness, not just for organisations but also for economies,” said Victor Lim, vice-president for consulting operations at IDC Asia-Pacific. “This is an ongoing race, and those that have not started will be left behind.”

According to the study, which involved 1,585 respondents in 15 APAC countries including Australia, China, Indonesia, Japan, Malaysia, Singapore and Thailand, only 41% of enterprises have started their AI journey, while 37% are waiting for the technology to mature before incorporating it into their business strategy.

Those that have embraced AI are reaping benefits such as accelerated innovation, greater competitiveness and margins, as well as more productive employees and better customer engagements, the study showed.

Across the region, Singapore was ahead of the pack in terms of investment, strategy and culture – three of the six indicators in IDC’s AI readiness model. It remained average on the other indicators – data, infrastructure and capabilities.

Asked about the biggest barriers to AI adoption, the survey respondents cited the lack of thought leadership and leadership commitment to invest in AI, a lack of tools and infrastructure to develop actionable insights, and the lack of skills, resources and learning programmes.

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Also, cultural traits required for AI adoption were found lacking among APAC enterprises, with workers being more sceptical than business leaders about culture readiness.

For example, 67% of workers who took part in the survey felt they were not empowered to take risks, make decisions independently and act quickly, and 52% of business leaders felt the same way.

The key to overcome barriers to AI adoption and drive organisational change is ongoing communications and demonstrating the benefits of AI across all levels of an organisation, according to Certis, a physical and cyber security service provider that has implemented AI initiatives to improve situational awareness of its security personnel, among other areas.

“When we rolled out the initiatives, people on the ground were able to realise the benefits of change through constant communication from our ‘ops-tech’ teams within business units,” said Fuji Foo, vice-president and head of business digitalisation at Certis.

According to IDC, spending on AI systems in the APAC region, excluding Japan, is expected to reach $4.6bn in 2021, representing a compound annual growth rate of 72.9% between 2016 and 2021.

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