Concerns for disruption see UAE consumer goods CEOs embrace AI

27 August 2018 Consultancy-me.com

A new survey by KPMG has revealed that chief executives operating in the Middle East consumer goods sector are being confronted with market disruption from competitors at a greater rate than elsewhere.

“Change is one of life’s certainties, so those who look only to the past and the present are likely to be caught out by the future. This is particularly true in the consumer and retail sector, which is being transformed by three revolutions at once: geographic, demographic and technological,” says Willy Kruh, KPMG International Global Chair, Consumer & Retail, in the introduction to the firm’s 2018 Global Consumer Executive Top of Mind Survey.

Subtitled ‘No normal is the new normal’, the survey was conducted in collaboration with the Consumer Goods Forum, a CEO-led industry group which includes the global professional service leaders McKinsey & Company, BCG, Accenture, Roland Berger, Oliver Wyman, A.T. Kearney, Alvarez & Marsal, AlixPartners, Capgemini and the Big Four among its some 400 high-powered members (together accounting for €3.5 trillion in combined annual sales and employing over 10 million people worldwide).Market trends that present the most significant challenges for companiesCanvassing the thoughts of 530 international executives (~80 percent at Board or C-level and 36 percent being CEOs or presidents), with two thirds of respondents in leadership of consumer goods companies pulling in annual revenues of over $1 billion (and up to $50 billion or more), the number one challenge to business cited across the globe was the threat of new competitors with disruptive business models, raised by nearly a third of those surveyed.

For the Middle East contingent, the concern was even greater, with 40 percent focused on competitive market disruption. Another third were foremost concerned by political and regulatory changes/pressures, while the next most cited greatest challenge by Middle East executives was contending with shifting economic/geopolitical conditions – two categories absent from the top three challenges facing consumer goods companies in every other region.

Top market challenges for consumer goods executives by regionBut to overcome the challenge, local CEOs are planning to hit back through innovation, in the UAE at least, where almost half of the respondents reported they were intending to embrace artificial intelligence (AI) technologies in the coming two years. This accords with a broader cross-sector CEO survey conducted by KPMG in the Emirates earlier this year, which found that a full 100% of the UAE respondents considered innovation a priority for strategic growth – compared to barely half of their global counterparts.

As a contrast, while 53 percent of the latest survey’s global board members believed the use of artificial intelligence will be critical to survive, and a quarter globally cited changing technology as the greatest market challenge, just 19 percent of the global executives were planning to start harnessing AI over the next few years (with 6 percent already doing so). More broadly, 80 percent of CEOs in the UAE stated business transformation as a priority in the coming two years, a significantly higher rate than the 57 percent of respondents globally.

Again, the local consumer goods trend correlates with wider industry views, with 68 percent of Emirate-based CEOs in the last survey saying they were intending to invest in new technologies – primarily data analytics, robotic process automation, and cognitive technologies – against only 31 percent globally. It may be worth noting here that for the UAE, the primary concern for disruptive market competitors as redefining the consumer goods industry jumped from the regional 40 percent response rate to 60 percent – nearly double the contention globally.

Innovation imperative

Still, history is littered with once dominant enterprises which failed to adapt with sufficient haste to shifting technologies and were swiftly left behind, ceding competitive economic power to new players – the concentration and scale of which is only growing in the modern global economy. Here, the KPMG survey report projects that in two years from now, 72 percent of platform businesses such as Alibaba and Souq will be using AI compared to just 27 percent of retailers and only 15 percent of manufacturers – with the former increasingly dictating the terms of the market.

“Today’s consumer and retail market is beyond disruption – we are disrupted – and CEOs need to listen to the market, look outward and focus on changing their businesses,” Kruh sates bluntly in conclusion. With such platform companies only furthering the globalisation of the consumer goods market, the heightened regional concerns for disruption from Middle East consumer goods executives, and their readiness to react and innovate through the embrace of technology, may ultimately grant local players a competitive edge on the larger global stage.

“The 2018 Top of Mind Survey finds an industry aggressively navigating a sea of change, where retailers and manufacturers appear to be radically rethinking their strategy, culture and processes and becoming more agile as they focus on growth,” says KPMG Lower Gulf’s Head of Retail Anurag Bajpai. “We are envisaging a major push towards embracing technology to enhance the retail experience. The next few years in the UAE may see more brands adopting AI, VR and connected technology to transform the in-store experience and integrate online and offline experiences.”

EY launches advanced tool to assess trustworthiness of AI technology

12 April 2019 Consultancy-me.com

Global professional services firm Ernst & Young has announced the release of an advanced analytical tool to assess the trustworthiness of artificial intelligence.

Enabled by Microsoft Azure, the EY Trusted AI platform released by the global professional services firm Ernst & Young produces a technical score of an artificial intelligence system by leveraging advanced analytics to evaluate its technical design, measuring risk drivers including its “objective, underlying technologies, technical operating environment and level of autonomy compared with human oversight.”

Aimed at helping to resolve the issue of trust in technology, which the firm contends is the biggest barrier to wider AI adoption, the new tool’s risk scoring model is based on the ‘EY Trusted AI conceptual framework’ launched last year, which speaks to embedding trust mechanisms in an AI system at the earliest stages around the core pillars of ethics, social responsibility, accountability and explainability, and reliability.

“Trust must be a front-line consideration, rather than a box to check after an AI system goes live,” said Keith Strier, EY’s Global Advisory Leader for Artificial Intelligence. “Unlike traditional software, which can be fixed, tested and patched, if a neural network is trained on biased data, it may be impossible to fix, and the entire investment could be lost.”AI system overviewUsers of the new solution such as AI developers, executive sponsors, and risk professionals will be able to garner deeper insights into a given AI system to better identify and mitigate risks unique to artificial intelligence technology, with the platform score produced by the tool subject to a complex multiplier based on the impact on users – taking into account potential unintended consequences such as social and ethical implications.

According to the firm, it’s the first solution designed to help enterprises evaluate, monitor and quantify the impact and trustworthiness of AI, while an evaluation of governance and control maturity further serves to reduce residual risks and allow greater planning – helping to safeguard “products, brands, relationships and reputations” in the contemporary risk environment.

“If AI is to reach its full potential, we need a more granular view – the ability to predict conditions that amplify risks and then target mitigation strategies for risks that may undermine trust, while still considering traditional system risks such as reliability, performance and security,” said EY Global Trusted Artificial Intelligence Advisory Leader Cathy Cobey.

Offered as a standalone or managed service – which will be regularly updated with new AI risk metrics, measurement techniques and monitoring tools – the new solution will be available to clients globally this year, with further features including a guided interactive, web-based interface and a function to drill down for additional detail, as well as the ability to perform dynamic risk forecasting on when an AI component changes – such as an agent’s functional capabilities or level of autonomy.