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Accelerating Competitive Advantage with AI Accelerating competitive advantage with AI How organisations are moving from experimentation to business impact Contents 01 Foreword from Cindy Rose 03 Executive Summary 07 Chapter 1: The state of AI in the UK 13 Chapter 2: From experimentation to implementation 23 Chapter 3: Creating a culture of participation 31 Chapter 4: Making AI work for everyone 41 Industry Spotlights 67 Conclusion 69 Appendix Cindy Rose CEO, Microsoft UK rtificial Intelligence is the engine of the has more than doubled. The challenge competitiveness, my colleagues and I A4th industrial revolution and is at the now is to move beyond tinkering, break understand the impact current political heart of the digital transformation currently out of the sandbox and harness the and economic turbulence is having on reshaping business, government and power of this technology at scale. organisations across all sectors. society. Little surprise, then, that the global Those looking for a reason to accelerate While uncertainty of this nature can AI market is expected to be worth up to their AI journey need look no further often breed caution and risk-aversion we $15.7 trillion by 2030.1 than perhaps the most important believe the better path lies in focusing For any organisation looking to get ahead finding of this year’s report. Namely, on ways in which we can create and in this AI-led future, the need to accelerate that organisations already moving from shape the future – a future in which the Foreword the adoption of new technology across experimentation to implementation UK maintains its global leadership in AI their entire organisation is pressing. are performing significantly better on and remains a competitive force. Given Indeed, if the message of our 2018 productivity and business outcomes this moment in our history, where both report, Maximising the AI Opportunity, than those still caught in the early stages leadership and competitiveness on the was ‘get started’, 12 months later it’s of exploration. global stage is more vital than ever, there ‘get serious’. Experimenting with AI in is no doubt that fully embracing AI-led pockets is a great way to build capability This gap is widening, with more advanced digital transformation is a critical success and prove the potential of AI, but to organisations realising the benefits on their factor for the country as a whole. deliver its full benefits, organisations bottom line, while also progressing more At Microsoft, our mission is to empower need to move beyond experimentation. rapidly in other key areas of their AI-led organisations to build on the positive There is now a clear link between an digital transformation, such as fostering steps they have already taken so they organisation’s full deployment of AI a culture of active participation among can achieve more. To help them move technologies and its ability to accelerate employees and establishing principles to from small-scale AI experimentation to growth, improve productivity and retain ensure they are using technology in an large-scale AI implementation in a way a competitive edge. ethical and responsible way. that drives value for their business, their employees, their customers and the UK as a whole. If the message of our 2018 report, Maximising the How they do it – technically, culturally AI Opportunity and ethically – is, above all, the story of , was ‘get started’, 12 months later this report. It is impossible to overstate it is ‘get serious’. how important this journey is for all of us and for generations to come. In this year’s report ‘Accelerating This case for increased velocity around AI competitive advantage with AI’, it adoption is applicable beyond individual is encouraging to see so many UK organisations too. Indeed, a key finding organisations are doing just that while in this report is 44% of leaders recognise acknowledging the vital role AI will play AI is a skill that will help secure their future in securing their future. Compared to last prospects. Yet over a quarter believe the year, the number using AI solutions in UK has the socio-economic structures their day-to-day operations has increased, in place to become a world leader in AI. while the number of UK business leaders Having been asked by the government Cindy Rose aspiring to be pioneers in AI innovation to lead a study into the UK’s digital CEO, Microsoft UK 01 02 n our 2018 study, Maximising the AI Perhaps most importantly of all, we find “Inthenextfiveyears, IOpportunity, we took a detailed look at those organisations already using AI the potential growth and performance at scale are performing an average of every successful benefits presented by Artificial Intelligence 11.5% better than those who are not – up (AI) for UK organisations. Using a mixture from 5% just one year ago. This is an company will of research among leaders and employees, extraordinary increase and clear evidence become an AI- along with the insights of experts across of the significant benefits awaiting the worlds of academia, business and companies who act now to embed AI company. It is government, we set out a clear roadmap across their business. now the next level to guide companies of all shapes, sizes and sectors in beginning their own AI journeys. This heightened performance includes of competitive forging ahead on vital areas like We also revealed a worrying gap between productivity and business outcomes as differentiation.” intent and action, with many organisations well as on more culturally-led (but no - Mitra Azizirad, Corporate Vice at risk of falling into a cycle of conversation less important) aspects such as fostering President for Microsoft AI and risk assessment rather than taking an ethos of active participation and practical steps to actually introduce the continuous learning among employees, technology into their operating model and establishing clear usage principles Executive and culture. to ensure the technology’s benefits are Twelve months on, we find a much- experienced in their entirety, without bias evolved story. Through an extensive and inclusively by all. literature review and by once again taking Summary The anatomy of an AI- the views of policymakers, business enabled organisation leaders, industry experts and employees, we discover that the need to not only So how exactly can UK organisations scale close that gap, but progress beyond it, has their use of AI and secure a competitive become supercharged. edge while, at the same time, doing so in a way that is ethical, responsible and in line Against a backdrop of fluctuating growth with the needs of their employees, partners forecasts, ongoing political uncertainty and customers? and ever more rapid digital disruption, we reveal AI-led digital transformation Along with a detailed look at the current increasingly holds the key to gaining state of AI in the UK, this is the question and retaining a competitive edge – for at the heart of the pages that follow. individual organisations and for the In particular, we view it through the UK itself. lens of what we call the ‘Anatomy of an Put another way, it is clear that simply AI-enabled organisation’. (See Figure 1.) getting started is no longer enough. This reveals how the organisations best Rather than experimenting with AI for placed for success are those in which three individual projects or business areas, core dimensions of AI usage – strategy, organisations that can move to full-scale performance and democratisation – are all implementation have an opportunity present and symbiotic. to unlock unprecedented performance This model also takes into account the benefits. Meanwhile, on the flipside, fact that as an organisation progresses its those who do not are in real danger AI journey, it naturally comes up against of falling further behind their more fresh challenges and complexities – both progressive counterparts. operationally and culturally. Following As Mitra Azizirad, Corporate Vice the model’s key tenets can therefore help President for Microsoft AI, explains: “In the answer these new questions and ensure the next five years, every successful company organisation continues to move forwards, will become an AI-company. It is now the without jeopardising either business next level of competitive differentiation.” outcomes or ethical performance. 03 04 Figure 1. The anatomy of an AI enabled organisation Strategy • Planning: Knowing what problems we are trying to solve and how to Strategy evaluate the benefits • Technical: The data and the technology that are required and are Involves deciding what available to achieve desired outcomes you will do for your • Skills: Knowing the AI capabilities the workforce needs customer better than • Learning: The participation-led actions that complement delivery your competitor Performance • Agility: Identifying lines of business ventures and IT requirements when combined with something AI can do Democratisation Performance • Impact: Meeting the defined performance measures • Ethics: A system of rules that govern our views of what are appropriate Allowing access to What you do, is just usages of AI the benefits of AI as important as to all, including the how you do it Democratisation skills needed • Diversity: Inclusive workforce • Bias: Different outcomes experienced by different groups as a result of AI • Culture: Social infrastructure that underpins work Positive progress the Industry Spotlights section later on – “ The UK is very but across the board there is a growing Amidst this pressing and holistic need for acceptance of the need to change as well as progress, there is much cause for positivity. well placed to an active determination to do so. Despite the level of political and economic succeed in AI and turbulence in the UK and the impact this The key now is to boost the power of that is having on organisations across sectors forward momentum. To accept that getting it presents massive (something we consider further in later started with AI is just that: the beginning.
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