Why artificial intelligence dominates analyst predictions

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In real estate, the mantra of success is always “Location, Location, Location!” For the tech industry and those they serve, “AI, AI, AI” appears to be the phrase that pays in 2018.

Each year, leading analyst firms identify a short list of key trends expected to dominate innovation in coming months. I find these third-party syntheses, with their 30,000-foot perspectives, an excellent way to stay abreast of major technology shifts. Further, these insights often complement the annual planning cycle, materializing to provide timely input to year-end strategy and forecast exercises.

For 2018, I reviewed publically available reports from multiple firms. Here are three I found particularly perceptive:

My analysis of Gartner, Forrester and IDC’s 2018 technology predictions revealed a landscape dominated by artificial intelligence. Not only was AI core to 9 of their 33 predictions, it was a vital enabler in nearly a dozen others. While other hot topics such as blockchain and augmented reality were noted, no other topic came close to AI in importance.

Quantitatively, there is no doubt that the AI tsunami is upon us. But what’s the force behind it. Let’s take a closer look.

Gartner Sees AI as Key for Next-Generation Digital Business Models and Ecosystems

If you use Amazon, Netflix or Uber, you enjoy the benefit of a next-generation digital business model. Their disrupted competitors? Not so much!

Business school strategies focusing on mass marketing of the best product, best service, or the lowest price alone can no longer win in a world of intelligent products, content, and services that cater to each customer’s specific needs. And operating models based on continuous improvement cannot keep pace with the discontinuous change that can arise for heavily automated Amazon-like digital business models. Disruption on this scale is why Gartner focuses so heavily on AI.

In its “AI Foundation” prediction, Gartner projects that “the ability to use AI to enhance decision making, reinvent business models and ecosystems, and remake the customer experience will drive the payoff for digital initiatives through 2025.” And it doesn’t stop there.

In its “Intelligent Apps and Analytics” prediction, Gartner foresees ubiquitous intersection of AI with software applications and analytics. In particular, the firm estimates that “over the next few years, every app, application, and service will incorporate AI at some level.”

Every business model, every application, every analytic. All powered by AI. If that doesn’t get your attention, read on.

Forrester Takes a Customer-Centric View of AI

While executives readily spout phrases such as “our customer is king” and “our customers are our biggest asset,” how many firms today can actually walk this talk?

It seems most organizations know little about their customers and their needs, and thus do little to provide personalized product and service experiences that delight and retain them. This may have been fine when your competitor was another cable provider and your customers were content to surf hundreds of channels looking for something they might like.

But what happens when Netflix shows up with AI-based personalized content suggestions from their million-item content catalog? I think you already know the answer.

To compete in the future, Forrester anticipates that intelligent agents will be tasked with enhancing customer experience. They’ll “collect preferences, behaviors, transactions, and emotions” and “use that data to increasingly influence consumer options and decisions.”

The result will be personalized next-generation customer experiences far surpassing today’s Netflix content model, and these will become the new normal for both B2C and B2B customer engagement.

And these customer experiences will do more than delight. For those overwhelmed by the influx of countless offers on every device 24x7x365, Forrester sees the rise of a new class of intelligent agent that can curate and shield consumers from the digital deluge.

Need numbers to bring this projection to life? If just 1 percent of U.S. customers make this intelligent-agent shift, $24 billion in spend moves with them. It’s not such a huge number by some standards, but neither was the iPhone sales number when introduced in 2007 when compared to the roughly one-million-iPhones-a-day Apple currently sells.

IDC Foresees Massive Digital Transformation Driven by AI

IDC uses the term “Digital Transformation” to describe the massive “technology-centric transformation altering business and society.” That may sound all-encompassing, but when you consider that Uber and Lyft, with 1.3 million contract drivers, will soon pass Walmart as the largest “employer” in the United States, it seems that IDC has it right.

And in typical IDC fashion, the firm has the numbers to prove it. Here is what IDC has to say about AI’s role with respect to Digital Transformation:

  • By 2019, 40 percent of digital transformation initiatives will use AI services
  • By 2021, 75 percent of commercial enterprise apps will use AI
  • By 2021, over 90 percent of consumers will interact with customer support bots
  • By 2021, over 50 percent of new industrial robots will leverage AI

AI clearly dominates analysts’ 2018 technology predictions, but it isn’t happening in a vacuum. The drivers are disruptive market and technology forces that are reshaping everyone’s business environment and everyone’s concept of “customer” and “service.” AI provides critical technology that helps enable new levels of automation in digital business models, new levels of personalization for customer engagement, and increasingly massive digital transformations.

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Artificial intelligence Machine learning Gartner Forrester Research