A new study from the Economist Intelligence Unit (EIU) and SAP SE has found that increased profitability is the top benefit realised by companies who are already yielding value from machine learning initiatives.
The study, ‘Making the most of Machine Learning: 5 Lessons from Fast Learners’, asked 360 senior executives across four geographic regions – North America, Europe, Asia Pacific and Latin America about their machine learning adoption.
According to the study, ‘Fast Learners’ – defined as those companies that are already seeing substantial benefits from machine learning – hold five key traits.
1. They make machine learning a C-level strategic priority.
Fast Learners have senior management who understand the strategic value of machine learning and are more open to embracing change. This is demonstrated by the fact that 75 per cent of Fast Learners plan to retrain employees displaced by machine learning to perform higher-value tasks that will retain them in the organisation.
2. They use machine learning to drive competitive differentiation and innovation.
Rather than being a threat, it’s a way to stand apart from the competition. Thirty-one per cent of Fast Learners say machine learning has already resulted in business model or business process innovation. For example, Ocado, an online grocery retailer based in the UK, created its own machine-learning based logistics platform for automated warehouses that it plans to license to other retailers.
3. They recognise the potential for new revenues and profitability.
Fast Learners know that machine learning can contribute to revenue growth opportunities, in part due to faster, more accurate and cost-efficient processes.
4. They keep key processes close to home.
Fast Learners are increasingly sourcing business functions such as finance and HR locally, rather than outsourcing to low-cost regions. Business relevance and customer value are expected to overtake cost in sourcing priorities.
5. They implement an enterprise-wide strategy.
Rather than dipping the toe in machine learning through individual business units or functions, leaders are adopting a holistic strategy across the organisation. This includes integrating machine learning into key customer-facing and product development functions, with 41 per cent saying machine learning is translating into higher customer satisfaction.
“Machine learning is creating results for businesses – both on their income statement and with their customers,” said Mike Flannagan, senior vice president, SAP Leonardo and Analytics. “Executives need to view machine learning not as a quick fix but as an integral part of a larger strategy to give their business a competitive edge. This requires looking past the initial investment and focusing on the potential for long-term business value.”