BCG and MIT call for more focus on holistic AI strategies in MENA

06 January 2021 4 min. read

The Middle East is facing an artificial intelligence (AI) gap. While the intention to invest in artificial intelligence is strong, the effectiveness of implementation is lagging. This is according to new research from the Boston Consulting Group (BCG) and MIT Sloan School of Management.

The study covered the state of AI around the world, through analysis of data from more than 3,000 managerial-level respondents. Involved in the project were two BCG wings: research arm BCG Henderson Institute and advanced analytics arm BCG Gamma. MIT’s representation came through the MIT Sloan Management Review.

With the global report as context, Middle East based leaders of Boston Consulting Group discussed region-specific findings, and the numbers largely reflect each other. Globally, around 70% of global leaders understand the value that AI could bring to their business, and most are acting on this understanding.

Few organisations see significant benefits with AI

Nearly 60% are either piloting an AI solution or have deployed one, while a similar number have an AI strategy in place. Despite this active approach, few around the world have cracked the code on how to generate value from AI. Just over 10% report significant financial benefits from AI around the world.

In the Middle East, the potential of AI has been in focus for a while, and the number of AI-aware businesses is even higher than the global average at 75%. Nearly half have deployed pilots at the very least, while short of 60% have an AI strategy. Yet, the share generating significant financial value sits at 6% – even lower than the global number. According to BCG Gamma’s Middle East leader Elias Baltassis, one explanation for this lies in the AI approach used.

“Our study reveals organisations that ultimately achieve the most value from AI are the ones implementing a holistic approach – ensuring increased interactions and mutual learning between humans and machines.” Simple enough at face value, human-machine interaction holds a complex web of combinations.

The report lists five forms of interaction between AI and humans. On one extreme is complete AI autonomy, where the machine takes care of the decision and the implementation. Second is a division of labour, where AI decides and human implements. Third is a scenario where AI makes a recommendation, although the human has the last word.

Scenario four puts AI in a similarly advisory role, where AI generated insights can help the decision-making process. Lastly, the human makes the decision, which is evaluated in hindsight by AI. According to BCG, a successful AI implementation will have a strategy in place for each of these combinations. Indeed, the 30% plus of Middle Eastern businesses that used three to four of these modes if not all five were the most successful of the lot.

Staying ahead

Implementation aside, companies in the Middle East were also similar to their global counterparts when it comes to the driving forces of AI strategy. Around the world, competitive factors take centre stage when it comes to AI investments. BCG Middle East partner & associate for digital transformation Rami Mourtada showed how the same holds true from a regional standpoint.

Competitive pressures drive AI strategies

“94% of regional CTOs believe that AI will provide an advantage over their competition as opposed to 87% globally, 71% are concerned that they may lose that advantage should competitors begin using AI in their operations, and 77% of global counterparts share the same apprehension.”

“Moreover, market demands are also driving organisations to implement AI, with 60% believing that customers will begin to ask for AI-driven offerings, and another 63% under the impression that partners will ask the same. As such, it is imperative that organisations drive their AI strategies effectively and efficiently,” he added.

As businesses turn to the latest in AI, Mourtada suggests that they not only prepare for a substantial investment, but that they plan these investments to integrate with the people within their organisation. “One major takeaway from this report is that Middle Eastern companies need to calibrate their investments in technology, people, and learning processes.”

“Configuring a business to capitalise on AI capabilities requires substantial investment and companies most committed in this direction are far more likely to reap the rewards. Financial investments in technology and people are important, but it is also essential for companies to identify that investing social capital in learning is equally critical to creating significant value with AI.”