Forbes India 15th Anniversary Special

Why 1,000 top executives voted for global AI standards

As AI systems begin to replicate complex human decisions, self-regulation by businesses won't be enough, most respondents said in a study by Tata Consultancy Services

Harichandan Arakali
Published: May 21, 2024 01:18:27 PM IST
Updated: May 21, 2024 11:22:32 AM IST

Why 1,000 top executives voted for global AI standardsIndia’s $250 billion-plus IT industry’s top companies are investing heavily into training their entire workforce to be AI-ready. Image: Shutterstock
 
Business leaders are less certain about how artificial intelligence (AI) will transform their operations for the better than the overall hype suggests, a new study by Tata Consultancy Services reveals.
 

Only 4 percent of the respondents in the survey said they’ve used AI in a way that had transformed their businesses, and nearly one in four said they hadn’t even moved beyond the initial exploratory phase, according to TCS’s AI for Business study. The company, India’s top IT services provider, released a report on its findings last week.
 
“Artificial intelligence has the potential to help companies reimagine entire value chains, experience pervasive performance improvements, and create new ways of working,” CEO K Krithivasan writes in the report. “At the same time, the findings from our AI study, as well as our own experience working with large organisations, show that most companies are also thinking of how to balance risk with opportunity as they move forward with their AI strategy.”

Why 1,000 top executives voted for global AI standards
 
An important finding is that “an overwhelming 81 percent of the leaders polled have asked for a more ‘global’ set of regulations and standards on AI”, Krithivasan adds.
 
Today, AI assists humans. As it matures, we will increasingly see it augment human activities and, eventually, transform businesses. AI will elevate human thinking with the ability to ideate based on machine output, he says.

Why 1,000 top executives voted for global AI standardsThe survey was conducted earlier this year by TCS’s Thought Leadership Institute, polling 1,272 senior executives with profit-and-loss responsibilities in 12 industry sectors across Asia, Europe, the Nordics, Latin America, the US and Britain.
 
About half of the respondents were from companies that had annual revenue between $1 billion and $5 billion and the other half belonged to enterprises with more than $5 billion in revenue.
 
The top barriers to business success include current corporate IT infrastructure and customer expectations, TCS found in the double-blind study.
 
Organisations also recognise the need to move beyond existing metrics to measure the success of AI implementations. Nearly three out of four respondents (72 percent) said they didn’t have the right metrics. Another 8 percent were not even aware of any useful KPIs (key performance indicators) they could apply to AI-enabled operations, according to the study.

Also read: TCS Chair: Six takeaways on what you should know about AI
 
India’s $250 billion-plus IT industry’s top companies are investing heavily into training their entire workforce to be AI-ready. They are creating an army of tens of thousands of specialists to deliver AI applications on multiple platforms, including those of the largest cloud providers, AWS, Microsoft and Google.
 
“The opportunities and challenges are still unfolding,” Yugal Joshi, a partner at Everest Group, an IT outsourcing consultancy, said in an interview with Forbes India. “Adoption of generative AI within the service providers organisations for delivery and productivity—that use case has become quite clear.”
 
The flip side is that if they see a lot of productivity gains and savings, clients are likely to say, “pass on those benefits to us, which is a sort of a negative”, from revenue perspective, he points out. Since the improved productivity can also help operating margins, the overall impact isn’t yet clear.
 
The combination of the global economic conditions and the geopolitical uncertainty that has kept their customers from spending more on IT has, in turn, led to the Indian IT companies reducing their workforce over the last 18 months.

Why 1,000 top executives voted for global AI standards
 
It’s not clear if the increased demand for AI applications among their customers also lead to a corresponding increase in hiring among the IT companies.
 
Among the respondents in the study—and it’s fair to assume many of them are customers of TCS—the question of what will happen to jobs drew opposing responses along a roughly even split. About 49 percent believe AI will either have no impact or increase job roles and 47 percent said AI will lead to more roles being eliminated than are created.

Why 1,000 top executives voted for global AI standards 
Unlike cloud computing, which is a broad, horizontal opportunity for everyone, the benefits of generative AI are currently limited to very specific deployments in individual segments or parts of a large company’s operations, Joshi at Everest says.
 
Therefore, “it’s very difficult to aggregate” the gains at an organisation’s level and turn that knowledge into a contract. However, that is the direction in which the IT companies are striving to go, which, in turn, will influence the number of people they hire to deliver the same type of work in an AI-led environment versus earlier, he says.