India is leading in Artificial Intelligence (AI) adoption, with new research from Boston Consulting Group (BCG) showing that 30 percent of Indian companies are effectively maximising the value through the use of this technology. Globally, 26 percent of companies are utilising AI, according to the BCG report. The Fintech, software, and banking sectors are increasingly using AI in their operations.
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BCG's Research on AI Capabilities
BCG's latest research on AI adoption found that of the 98 percent of companies that are at least experimenting with AI, only 26 percent have developed the necessary capabilities to move beyond proofs of concept and begin extracting value.
The report, titled "Where's the Value in AI?", was based on a survey of 1,000 Chief Experience Officers (CxOs) and senior executives from over 20 sectors, estimating their companies' AI maturity across 30 foundational capabilities, spanning 59 countries in Asia, Europe, and North America, and covering ten major industries, including media and telecommunications.
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According to BCG research, involving over 1,000 companies worldwide, only 4 percent of companies have developed cutting-edge AI capabilities across functions and are using them to consistently generate substantial value, while another 22 percent have implemented an AI strategy and advanced capabilities and are starting to generate value. BCG calls these companies leaders. The remaining 74 percent have yet to show tangible value from their use of AI, the report said.
The research notes that global CEOs seek tangible returns from AI technology after years of investing, hiring talent, and launching pilot programmes. However, realising the full potential of such technologies remains difficult.
AI Leaders in India
"India's swift adoption of AI is redefining its competitive edge globally, with 30 per cent of Indian companies having maximised AI's value potential–surpassing the global average of 26 percent. With 100 per cent of companies actively experimenting with AI, India stands out for its readiness to harness AI's potential," said Saibal Chakraborty, India Leader, Technology and Digital Advantage Practice, BCG, according to an ANI report.
Moreover, the research found that the maturity of India's AI leaders spans both traditional and digital sectors, signalling a broad-based adoption that's driving value beyond typical tech-driven industries.
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"As India's AI leaders go beyond productivity to reshape and invent new business models, India is poised to lead not only in AI adoption but in generating substantial and measurable value," said Chakraborty, the report further said.
The sectors with the highest percentages of AI leaders tend to be those that were among the first to experience digital disruption a decade and half ago and got the earliest start on building digital capabilities. These include fintech (49 percent are leaders), software (46 percent), and banking (35 percent).
Impact of AI on Business Functions
BGC noted that, overall, the companies in the survey derive 62 percent of the value they obtain from AI and generative AI in core business functions, including operations (23 percent), sales and marketing (20 percent), and R&D (13 percent). Support functions generate 38 percent of the value, with customer service (12 percent), IT (7 percent) and procurement (7 percent) leading the way.
BGC cited the example of a North American telco that is already using AI to analyse call recordings to identify opportunities for cost savings and higher customer satisfaction. The company has reportedly reduced call center interaction time by 20 percent and cut call transfers to live agents by 25 percent. AI-powered chatbots now handle 30 percent of calls, and the telco expects to reduce total costs in the relevant business unit by 25 percent, the report said.
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Things You Need to Know
According to BCG, AI refers to all artificial intelligence technologies and applications.
Predictive AI refers to the use of artificial intelligence products and systems to analyse historical and current data to make predictions about future events or trends. These systems use data analytics, machine learning, and various statistical algorithms to identify patterns and relationships in data, which can then be used to forecast outcomes with a certain level of probability.
GenAI refers to the use of products and programs that can generate new realistic content, such as text and images. Examples include ChatGPT for text generation and DALL-E for image generation.
