ISG Research: Automation and AI Use to Triple by 2019

In an ISG survey of more than 500 business and IT leaders, 16 percent say they are currently applying automation and artificial intelligence (AI) to one or more mission-critical business processes. More than three times as many (51 percent) say they expect to do so by 2019. This rapid increase in adoption, the ISG Automation and AI Survey report notes, suggests IT and business leaders are becoming more confident that current proof-of-concept and pilot projects will move into production in the next 24 months.

Overall investment in automation technologies – including robotic process automation (RPA), autonomics, virtual customer service agents and personal assistants, natural language processing and machine learning – is expected to double in the next two years, the survey finds, as enterprises look to harness technologies that have the flexibility to solve more than one business problem.

"Automation and artificial intelligence are top of mind for business executives and service providers alike – and with good reason," said Todd Lavieri, partner and president of ISG Americas. "Robotic process automation, autonomic systems and cognitive agents are making employees more productive by taking over routine, process-oriented tasks. At the same time, data scientists are using machine learning to find patterns and make predictions on vast troves of structured and unstructured data. These technologies, taken together, promise to usher in the next wave of enterprise growth and profitability."

A Strategic Imperative

Some 75 percent of respondents indicate automation and AI will be critical to their ability to deliver products and services competitively, and two-thirds say such technologies will be required to fend off competition from digital disruptors. An equal number say cognitive systems will be central to strategic decision-making.

From a functional perspective, nearly 70 percent say information technology will be most impacted by automation and AI – specifically by autonomics – in the next two years. Nearly 60 percent believe autonomics will double IT productivity by 2020.

Other key areas of impact are customer care, where more than 60 percent say virtual agents and chatbots will improve customer experience by 2020, and finance and accounting, where more than 50 percent say RPA will automate more than half of F&A processes in the same time frame.

Automation and AI also will force enterprises to completely reimagine their talent acquisition and retention strategies, more than 60 percent of respondents say, particularly for such hard-to-obtain-and-retain skills as software development and data science.

Disruptive to Outsourcing

More than 60 percent believe automation and AI will decrease the need to outsource IT and business-support functions, and more than half say it will enable them to repatriate work now performed offshore.

Among enterprise buyers, 54 percent say they expect providers will need to lower their costs by 25 percent or more as a result of automation and AI, and an even greater number – 65 percent – say such technologies will reduce the cost to manage their service provider relationships significantly.

Nearly half of enterprise buyers believe service providers are avoiding automation and AI to preserve short-term revenue. Yet, 54 percent say they prefer to buy the business outcomes of automation and AI (cost avoidance, productivity, quality, etc.) from a service provider rather than buy automation and AI software themselves.

"As ITO and BPO buyers increasingly look to automate processes before they outsource them, the need for traditional tower-based outsourcing services will wane – as will the need to have a significant number of delivery resources offshore," said Stanton Jones, director and principal analyst at ISG Research, and a co-author of the survey research report. "Buyers also are becoming savvier about the use of automation and are realizing their managed services providers are not always passing savings back to them as services become more automated."

More than 80 percent of respondents say the most important outcomes from enterprise automation and AI are avoiding long-term costs (such as adding new hires), boosting productivity and improving customer experience. The vast majority do not view automation and AI as a way to cut jobs, with nearly 70 percent saying such technologies are focused on automating tasks, not entire roles. Nearly three-quarters feel automation and AI will free up employees to work on more value-added activities.

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About the ISG Automation and AI Survey

The ISG Automation and AI Survey asked 532 IT and business leaders in April 2017 about their current and planned adoption of automation and AI solutions, the reasons behind their adoption, their success to date and how such technologies would impact their talent acquisition and retention strategies – both internally and through service providers.

About ISG

ISG (Information Services Group) (NASDAQ: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including 75 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; technology strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com.

SOURCE Information Services Group, Inc.

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