With the rapid rise of ChatGPT and other tools, Artificial Intelligence (AI) has become a key boardroom discussion the World over. So how are Indian companies leveraging AI... According to an IIM Ahmedabad (IIMA) and Boston Consulting Group (BCG) report, most Indian companies are lagging behind. The study reveals that select Indian BFSI companies, particularly banks and new-age NBFCs, have very high AI Maturity, on par with global frontrunners. Consumer Goods companies, which were once the vanguards of management practices, have fallen behind. The report highlights that INR 1.5-2.5 Trillion incremental pre-tax profit can be generated by the top 500 Indian companies in next 5 years by successfully leveraging AI.
67% of Indian Companies are Laggards
The Report divides companies into four groups based on their maturity level— Leaders, Steady Followers, Leapfroggers and Laggards. 11% of companies in the set were adjudged Leaders, that now face a stiff challenge from the Leapfroggers (9% of the companies) who started their AI-driven transformation journey late but have improved sharply in AI Maturity in the last three years, converging with the Leaders on most aspects of AI Maturity. However, the concern emerged with Laggards, about 2/3rds of the companies, that have some exposure and investment in AI in their Technology, Data and Analytical capabilities.
Source: IIM Ahmedabad (IIMA) and Boston Consulting Group (BCG) Report
Indian Banking Sector leads in leveraging Artificial Intelligence
According to the report, 71% of the Leaders and 55% of the Leapfroggers are from the BFSI industry, partly due to its “data-centric approach, necessitated by stringent regulatory requirements.”
Consumer goods companies, which were leaders of management thinking and practice in the last century, seems to have fallen behind the curve in today’s digital era. While 22% companies are AI Leaders in BFSI sector, only 5% companies are AI Leaders in Consumer Sector.
The report notes, “Despite India being home to select set of companies who are likely to be AI Maturity leaders globally, the overall picture is concerning. 67% of companies in this survey are AI Laggards, with current maturity well below 3.0. 75% of Consumer Goods (CG) and Industrial Goods (IG) organizations are Laggards in AI Maturity. While the maturity of the Laggards has inched up on an absolute level, AI is not their strategic priority. Where AI projects exist in such companies, they are associated with either peripheral or ancillary functions and the management is not focused on scaling up AI.”
Source: IIM Ahmedabad (IIMA) and Boston Consulting Group (BCG) Report
India’s Talent Deficit in Artificial Intelligence is glaring
Research shows that AI investments augmenting end-user value and topline growth could drive significant economic and wage expansion. The opportunity is India’s for the taking—the challenge is now to turn the enormous potential of AI into reality. This however requires a lot of investments in talent development. According to the report, top 500 Indian companies require 1 million hours of training in upskilling mid and senior level management on the business aspects of AI, digital transformation, Agile ways of working and more. Report also notes that there is a dearth of Data scientists with domain expertise. “Need for 25,000 to 30,000 advanced practitioners of AIML expected in Top 500 Companies in the next 3-5 years,” says the report.
India has only around 4.5% of the world’s AI professionals, and the talent crunch will get more acute, notes the report.
IIMA- BCG Collaborate to release "AI in India - A Strategic Necessity" Report
The Brij Disa Centre for Data Science and Artificial Intelligence (CDSA) at the Indian Institute of Management Ahmedabad (IIMA), a premier global management Institute and BCG X, the AI, and Digital Transformation unit of the Boston Consulting Group (BCG) have collaborated to release a comprehensive report titled "AI in India - A Strategic Necessity" on the AI readiness levels of Indian businesses. The report findings are based on the study of 130 companies from the Banking, Financial Services, and Insurance (BFSI), Consumer Goods (CG), and Industrial Goods (IG) sectors along with extensive interviews and surveys conducted on CXO’s of large-sized, medium, and small organisations.
The report was released on July 12, 2023, at the IIMA campus by Professor Bharat Bhasker, Director, IIMA, Professor Ankur Sinha, Professor Anindya Chakrabarti, Co-Chairs of the Brij Disa Centre for Data Science and Artificial Intelligence, Professor Arindam Banerjee, Debjit Ghatak, IIMA alumnus and General Manager, Brij Disa Centre for Data Science and AI, Sumit Sarawgi, Managing Director and Senior Partner, BCG, Deep Narayan Mukherjee, Vice President - Data Science, Rajat Mathur, Partner, BCG , all co-authors of the report from IIM A and BCG respectively.
Releasing the study, Professor Bharat Bhasker, Director of IIMA, said, "India is poised to enter into a digital revolution where successful AI adoption by our industry can be a crucial determinant of India’s competitiveness globally. Successful adoption of AI could add up to 1.4 percentage points annually to real GDP growth of India.” Sumit Sarawgi, Managing Director & Senior Partner, BCG commented, “Investments into AI could deliver extraordinary returns but success hinges on deploying AI at scale. An organisation wide commitment is required in successful AI driven transformation of the organisation.”
Collaboration between IIMA and BCG to provide insights on AI is laudable. The report offers actionable guidance for companies with mid-level AI maturity to progress towards global best-in-class AI maturity levels. Report will help industry and academia to focus on this cutting-edge topic.
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