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Provocative thinking, transformative insights,
tangible outcomes
AI:BUILT
TOSCALEFrom experimental to exponential
Achieve competitive agility
Abouttheauthors
Ketan leads Strategy & Consulting across
all Accenture Applied Intelligence industry
and functional practices. Ketan partners
with Fortune 500 C-suite executives and
board members to transform their digital
and analytics operating models by applying
intelligence through design-thinking,
AI, data strategy and a cloud-based
platform ecosystem.
He teaches AI at both the Kellogg School of
Management & McCormick School of
Engineering at Northwestern University.
Ketan in based in Chicago, Illinois.
KetanAwalegaonkar
Managing Director
Accenture Applied Intelligence
Robert has over 20 years of experience
shaping and delivering enterprise analytics
strategy and transformation programs for
Fortune 500 clients, including value
targeting, operating model & talent,
analytic delivery models, data &
technology architecture and employee
adoption programs.
He has co-authored several white papers on
analytics transformation including “The
Insight-Powered Enterprise” and “Preparing
for a Data Science Transformation”, and
co-created Accenture’s Analytics
Diagnostic (patent pending). Robert is
based in Portland, Oregon.
RobertBerkey
Managing Director
Accenture Applied Intelligence
Greg leads Communications, Media and
Technology within Accenture Strategy.
His role focuses on helping clients
worldwide achieve high performance
through profitable growth, accelerated
innovation, organizational agility, and
operational excellence.
Greg has over 25 years of consulting
experience across the telecom, media,
technology and retail industries, having
focused on new digital business launches,
strategic digital planning, business growth
strategies and cost transformation. Greg is
based in Dallas, Texas.
GregDouglass
Senior Managing Director
Accenture Strategy
Athena helps C-suite leaders address
some of their top challenges, including
changing business models, managing
data volumes, addressing analytics
immaturity and transitioning away from
legacy technology.
For 20 years, Athena has guided teams in
developing actionable strategies and
plans to create more value through
analytics and define the optimal
technology footprint. A frequent
commentator on digital trends in national
and global media publications, Athena is
based in San Francisco, California.
AthenaReilly
Managing Director
Accenture Strategy
2AI: BUILT TO SCALE
A full 84% of C-suite executives believe they must leverage
Artificial Intelligence (AI) to achieve their growth objectives.
Nearly all C-suite executives view AI as an enabler of their
strategic priorities. And an overwhelming majority believe
achieving a positive return on AI investments requires scaling
across the organization.
Yet 76% acknowledge they struggle when it comes to scaling
it across the business. What’s more, three out of four C-suite
executives believe that if they don’t scale AI in the next five
years, they risk going out of business entirely.
With the stakes higher than ever, what can we learn from
companies that successfully scale AI, achieving nearly 3x the
return on investment and a 30% premium on key financial
valuation metrics?
THENUMBERS
TELLTHESTORY
ofexecutivesbelieve
theyriskgoingout
ofbusinessin5years
iftheydon’tscaleAI
75%
ofexecutives
strugglewithhow
toscaleAIacross
thebusiness
76%
ofexecutivesbelieve
theywon’tachieve
theirgrowthobjectives
unlesstheyscaleAI
84%
3AI: BUILT TO SCALE
Nail it, then scale it
To answer that question, Accenture conducted a landmark global study involving
1,500 C-suite executives from organizations across 16 industries.
The study focused on determining the extent to which AI enables the business strategy, the top characteristics required to scale
AI, and the financial results when done successfully. The aim: Help companies progress on their AI journey, from one-off AI
experimentation to gaining a robust organization-wide capability that acts as a source of competitive agility and growth. Three
distinct groups of companies with increasing levels of capability required to successfully scale AI emerged from the research.
ProofofConcept
Factory
In our experience, most companies (80-85%) are
stuck on this path.They conduct AI experiments and
pilots but achieve a low scaling success rate and a
low return on their AI investments. Their efforts tend
to be siloed within a department or team and are
often IT-led. They lack a connection to a business
outcome or strategic imperative. The time and
investment it takes to scale is underestimated,
leaving the full potential of AI untapped.
01 StrategicallyScaling
Only 15-20% of companies have made this leap. These
companies have journeyed beyond proof of concept to
achieve a much higher success rate scaling AI—nearly
double. And a much higher return—nearly three times
their counterparts. As a C-suite priority, these
companies have a clear AI strategy and operating
model linked to the company’s business objectives,
supported by a larger, multi-dimensional team
championed by the Chief AI, Data or Analytics Officer.
However, the scaled AI is generally across point
solutions, e.g., personalization.
02 Industrialized
forGrowth
Very few (5%) companies have progressed to this point
on their AI journey. These companies have a digital
platform mindset and create a culture of AI with data
and analytics democratized across the organization.
They have scaled thousands of models with a responsible
AI framework. They promote product and service
innovation and realize benefits from increased visibility
into customer and employee expectations. Our
research indicates that industrializing AI will enable
competitive differentiation which is correlated with
significantly higher financial results.
03
Whatdo
wemean?
ArtificialIntelligence(AI)encompasses
multiple technologies that enable
computers to sense, comprehend, act, and
learn. AI includes techniques such as
machine learning, natural language
processing, knowledge representation,
computational intelligence, among others.
Pilot:Rolling out a capability with real data,
users and processes in a production
environment (using a subset of the relevant
scope). The purpose is to test how the
capability performs with a limited scope and
to make any needed modifications before
expanding to the full applicable scope.
Scale: Extension of the piloted capability
across the full applicable scope with all
relevant data, end users, customers, and
processes. Purpose is to maximize the
application’s value to the organization.
4AI: BUILT TO SCALE
Payingdividends:
Provenpremiumvalue
The C-suite executives surveyed
reported positive ROI on their AI
investments. We dug deeper.
Was there any relationship between successfully scaling AI across
the enterprise and key market valuation metrics? What was the
“premium” for being a leader?
Using survey data combined with publicly available financial data,
our team of data scientists created a model to identify the premium
for companies in our sample that successfully scale AI, controlling
for various characteristics of the companies.
We discovered a positive correlation between successfully scaling
AI and three key measures of financial valuation: Enterprise Value/
Revenue Ratio, Price/Earnings Ratio, Price/Sales Ratio.
Companies that were identified as Strategic Scalers realize a success rate of 70% or more in
their AI scaling initiatives and a return on their AI investment of 70% or higher.
Price/Sales
Ratio+28%
Price/Earnings
Ratio+33%
Enterprise Value/
Revenue Ratio+35%
5AI: BUILT TO SCALE
32%
Proofof
Concept
US $110m gap
86%
Strategic
Scalers
When the 1,500 companies in our research were
analyzed collectively, US$306 billion was spent on AI
applications in the past three years. The ROI gap
amongst them was significant. On average, it
spanned US$110 million between companies stuck in
Proof of Concept and those who have progressed to
becoming Strategic Scalers.1
Overall reported spend on Artificial Intelligence
initiatives over the past three years
Thegreatdivide
The difference in return on AI investments between companies in the Proof of Concept
stage and Strategic Scalers equates to an average of US$110 million.
$10 million
or less
$11-$50
million
Between
$101-$500 million
9%
38%
14%
14%26%
Over
$500 million
Between
$51-$100 million
6AI: BUILT TO SCALE
CompaniesstrategicallyscalingAIhavenearly
2xthesuccessrate
and3xthereturn
fromAIinvestmentsvs.companies
pursuingsiloedproofofconcepts
7AI: BUILT TO SCALE
AI’s evolutionary
paths to growth
ProofofConcept
Factory
•	 Analyticsburieddeepandnota
CEOfocus
•	 SiloedoperatingmodeltypicallyIT-led
•	 Unabletoextractvaluefromtheirdata
•	 Struggletoscaleasunrealistic
expectationsontimerequired
•	 Significantunderinvestment,yielding
lowreturns
01
StrategicallyScaling
•	 CEOfocuswithadvancedanalyticsand
datateamsolvingbigrockproblems
•	 Multi-disciplinaryteamsof200+
specialistschampionedbyChiefAI,
DataorAnalyticsOfficer
•	 Abletotuneoutdatanoiseandfocus
onessentials
•	 Intelligentautomationandpredictive
reporting
•	 Catchupondigital/AI/dataassetdebt
•	 Experimentalmindsetachievingscale
andreturns
02
Industrialized
forGrowth
•	 Digitalplatformmindsetandenterprise
cultureofAIdemocratizingreal-time
insightstodrivebusinessdecisions
•	 Clearenterprisevision,accountability,
metrics,andgovernancebreaking
downsilos
•	 ‘Whatif’analysisenablingimproved
acquisition,serviceandsatisfaction
•	 Responsiblebusinesspractices
enhancingbrandperceptionandtrust
•	 Competitivedifferentiatorandvalue
creatordrivinghigherP/Emultiples
03
8AI: BUILT TO SCALE
The research revealed three critical
success factors that separate those that
have progressed to Strategically Scaling
and those still in Proof of Concept.
Strategic Scalers:
Drive“intentional”AI
Tuneoutdatanoise
TreatAIasateamsport
01
02
03
Roadblocksto
scaling
When executives ranked their top
challenges for scaling AI, they placed
“lack of budget” at the bottom of the list.
A possible explanation: AI is a C-suite
priority. So, while it may be challenging to
decide which initiatives to fund first, the
monetary resources, overall, aren’t a problem.
Among the top challenges? The inability to set
up a supportive organizational structure, the
absence of foundational data capabilities, and
the lack of employee adoption. As the study
shows, it’s exactly these aspects where
Strategic Scalers outperform their
counterparts in Proof of Concept.
9AI: BUILT TO SCALE
Drive“intentional”AI
Creating value from AI requires leaders to anchor
AI in C-suite objectives.
Toallintents
andpurposes
Most global organizations today believe
passionately in the value of data and analytics.
But one life sciences company had been
struggling to move from theory to execution in
implementing data and insights capabilities
across all its business divisions. And they had a
vision to scale a collaborative data-powered
service delivery model to create an internal
marketplace for FAIR (findable, available,
interoperable, reusable) data.
Working with data and digital leadership, the
multi-functional team designed and delivered a
holistic data and analytics strategy while
achieving immediate value through targeted
use-cases in each of the key areas of the business.
In addition to architecting and standing up the
new scalable data and analytics delivery model,
they created a model to make data search easier
and more intuitive and embedded a new data-
driven culture within the organization.
The result? The company’s digital
transformation is speeding ahead, powered by
data analytics insights across its business.
Strategic Scalers pilot and successfully scale more initiatives than their
Proof of Concept counterparts—at a rate of 2:1—and set longer timelines.
They are 65% more likely to report a timeline of one to two years to move
from pilot to scale. And even though they achieve more, Strategic Scalers
spend less. At first glance it may seem paradoxical. But the data indicate
that these leaders are more intentional, with a more realistic expectation
in terms of time to scale—and what it takes to do so responsibly.
To successfully scale, companies need structure and governance in
place. And the Strategic Scalers have both. Nearly three-quarters of
them (71%) say they have a clearly-defined strategy and operating
model for scaling AI in place, while only half of the companies in Proof
of Concept report the same.
Strategic Scalers are also far more likely to have defined processes
and owners with clear accountability and established leadership
support with dedicated AI champions. Initiatives not firmly grounded
in business strategy and lacking a governance construct to oversee
and manage are slower to progress. Turf wars break out over who
“owns” AI and data. And, regardless of the AI platforms used, or the
know-how recruited, misaligned efforts fall flat.
01
ForStrategic
Scalers,8of10
scalinginitiatives
aresuccessful
10AI: BUILT TO SCALE
Sizingup
thesituation
The “smaller” companies in our study
generated revenues between US$1 and
5 billion a year. The largest had revenues of
more than US$30 billion. When it comes to
scaling AI, are there any major differences
between these two groups of companies?
Do the largest companies face lower scaling
success rates due to their organizational
complexity? Or, quite the opposite, do they
achieve higher returns as they untap greater
value potential?
When we grouped the surveyed companies
by size, we found no significant differences in
scaling success rate or return on AI
investments. So, size is not a factor. It’s all
about instilling the right AI capabilities and
mindset in the organization.
Dothebasicsbrilliantly
When it comes to scaling AI, Strategic Scalers do the basics brilliantly. Compared to companies in
Proof of Concept, they have a clearly defined strategy and operating model for AI, defined process
and owners for measuring value from AI, clearly defined accountability, appropriate levels of funding,
and flexible business processes with embedded AI. They also scale through reusable assets on
platforms, so successive AI programs are 3-5X faster to market at lower spend.
+26%
Flexiblebusiness
processeswith
embeddedAI
Clearlydefined
strategyandoperating
modelforscaling
+60%
Clearlydefined
accountability
forscaling
+50%
Appropriate
leveloffunding
+30%
Definedprocessand
ownersformeasuring
valuefromAI
+27%
Packagedorcustom
builtAIapplications
forscaling
+50%
11AI: BUILT TO SCALE
Newproduct
offerings
Organization
effectiveness/
workforce
productivity
Flexiblebu
withembe
Customer
service
Customer
satisfaction
Customer
acquisition
Customer
trust
Product/
brand
perception
Speed
management
efficiency
Working
capital
utilization
Optimizationinaction
With a continuously evolving competitor and customer
landscape, a major North American technology company with
global reach needed a dynamic integrated approach for its vast
and complex supply chain. A mix of open source machine
learning tools was used to analyze a range of factors including
demand uncertainty, cost drivers, customer relationships, and rate
of technological change. Personalized supply chain strategies for
four key segments were created with synergies pinpointed to
reduce complexity and maintain economies of scale.
The result? A personalized supply chain transformation with AI at
the core driving new efficiency and effectiveness: 30% faster
speed to delivery with 2X more accurate forecasting. Operating
income up 45% with a reduction in manufacturing and freight
costs of over 25%. Product availability improved over 35%, while
overall supply chain was streamlined with over 90% fewer
product configurations.
moreaccurate
forecasting2X
increasein
operatingincome45%
Benefitsacrossthebusiness
Companies from around the world and across industries are using AI to change the fabric of
what they do and how they do it. Strategic Scalers are more likely to achieve a range of
benefits including:
12AI: BUILT TO SCALE
Tuneoutdatanoise
Strategic Scalers recognize the importance of managing data.
02
Ninety percent of the data in the world was created in just the past 10 years. One-hundred
and seventy-five zettabytes of data will be created by 2025. Yet after years of collecting,
storing, analyzing, and reconfiguring troves of information, most organizations struggle
with the sheer volume of data and how to cleanse, manage, maintain, and consume it.
Strategic Scalers tune out “the noise” surrounding data. They recognize the importance of
business-critical data— identifying financial, marketing, consumer, and master data as
priority domains. And Strategic Scalers are more adept at structuring and managing data.
They have invested heavily in data quality, data management, and data governance
frameworks on the cloud. And they have clear operating models for generation versus
consumption of data. The research shows they are much more likely to wield a larger,
more accurate data set (61% versus 38% of respondents in Proof of Concept). And 67% of
Strategic Scalers integrate both internal and external data sets as a standard practice
compared to 56% of their Proof of Concept counterparts.
What’s more, they use the right AI tools—things like cloud-based data lakes, data
engineering/data science workbenches with model management and governance, data and
analytics marketplaces and search—to manage the data for their applications. From creation
to custodianship to consumption. Strategic Scalers understand the importance of using
more diverse datasets to support initiatives.
Strategic
Scalers
vs54%
Companiesinthe
ProofofConceptstage
37%
Myorganization
recognizesthe
importanceofourcore
dataasthefoundationto
scalingAI.
StrategicScalersstronglyagree:
13AI: BUILT TO SCALE
Mastersoftheirdata
Strategic Scalers invest in a data foundation that enables them to scale AI.
Strategic ScalersProof of Concept
Tappingintodata
With beer sales declining and competitors
drinking up market share on all sides, brewers
are under increasing pressure to find new
growth. One global brewer found a solution
by tapping into new intelligence. The latest
machine learning techniques helped
overcome data veracity issues and develop
more accurate forecasting models, improved
consumer and customer segmentations, and
enhanced sales incrementality.
Their new advanced analytics capabilities are
scaled to over 100+ global datasets, including
sales and forecast data, social media, trade
spend, customer and product master data,
even weather data. They get actionable
data-driven insights in front of their key
business decision makers, from commercial
intelligence to sales and marketing, at
unprecedented speed and scale.
The result: A return of four times the
investment in the first year alone.
14AI: BUILT TO SCALE
TreatAI
asateamsport
The effort of scaling calls for embedding
multi-disciplinary teams throughout the organization
in addition to having sponsorship from the top.
03
The effort of scaling calls for embedding multi-disciplinary teams
throughout the organization—teams with clear sponsorship from the top
ensuring alignment with the C-suite vision. For Strategic Scalers, these
teams are most often headed by the Chief AI, Data or Analytics Officer.
They’re comprised of data scientists; data modelers; machine learning,
data and AI engineers; visualization experts; data quality, training and
communications specialists.
It’s a lesson Strategic Scalers have learned well. In fact, a full 92% of them
leverage multi-disciplinary teams. Embedding them across the organization is
not only a powerful signal about the strategic intent of the scaling effort, it
also enables faster culture and behavior changes. In contrast, those still in
Proof of Concept are more likely to rely on a lone champion within the
technology organization to drive AI efforts.
The“A”and“I”
inteam
A leading global convenience store chain with
$60B in revenue and 16,000 locations sought
to gain a more competitive position to stave
off more agile rivals.
They leveraged data science to price their
products more competitively to better match
customer demand across global markets.
Leveraged machine learning and automation
to increase pricing frequency. And
established virtual agents to interact with
their global category management teams to
drive adoption of the new pricing approach.
All of these changes were made possible
thanks to multi-disciplinary teams with skills
in areas like data engineering, visualization,
data quality, and human-centered design.
The initiative is expected to deliver an
expected US$300 million in gross profit
uplift annually once fully scaled.
ofStrategic
Scalersleverage
multi-disciplinary
teams
92%
15AI: BUILT TO SCALE
Allhandsondeck
Companies achieving success scaling AI initiatives are more likely than their Proof
of Concept counterparts to ensure their employees are prepared for the journey:
Formal
training:
1.5x
Fully understand
how AI applies
to role:
2x
Understand 
implement
responsible AI:
1.7x
As companies journey toward maturity in scaling AI, new skill sets emerge as
critical to success. Things like human-centric design and social and behavioral
sciences to drive responsible business practices. The better the blend of skills,
the more sustainable the end result. Those leading the pack ensure employees
have ongoing formal training, an understanding of how AI applies to their role,
and understand and implement responsible AI. Because AI teams are embedded
throughout the organization, and not cordoned off in special projects, the wider
employee base has an opportunity to work side-by-side with them and
appreciate how AI accelerates organizational goals.
Experience is another differentiator when it comes to success. Nearly half
of all Strategic Scalers compared with just a third of respondents in Proof
of Concept report having the necessary experience. The sheer volume
speaks for itself: Strategic Scalers have successfully scaled 114 initiatives
on average, compared with just 53 for those in Proof of Concept.
16AI: BUILT TO SCALE
Realizingthepotential
Industrializing for Growth is a dynamic destination.
It’s important to note that Industrializing for Growth is a dynamic destination that changes as technology evolves.
From our experience, we know of three additional variables that speed companies along their journey to the ultimate
destination: A data-driven culture where AI is driving exponential returns.
Focus on the ‘I’ in ROI
The C-suite views AI investment as the cost of
doing business. They earmark budget for AI
recognizing its criticality for future growth
and spend without the need to prove ROI in
advance to justify the investment.
Adopt a digital platform
mindset to scale
The two main objectives of platforms are
acceleration and extended value. Publishing
data on a platform once for products to
consume through APIs and microservices is
more cost effective. It also drives scale by
breaking down silos and democratizing data
and insights enabling greater collaboration
and innovation across the enterprise and
broader ecosystem of partners.
Build trust through
Responsible AI
Responsible AI entails creating a framework
that ensures the ethical, transparent and
accountable use of technologies in a manner
consistent with user expectations,
organizational values and societal laws and
norms. Responsible AI can guard against the
use of biased data or algorithms, ensure that
automated decisions are justified and
explainable, and help maintain user trust and
individual privacy.
17AI: BUILT TO SCALE
Scalingto
newheightsof
competitiveness
There are reams of information on the “what”of AI.
But scaling new heights of competitiveness with AI
requires understanding the “how.” And at times
eschewing conventional wisdom that continues to
emerge as AI evolves.
It’s not just about SPEED
It’s about moving deliberately, in the right direction.
It’s not just about MONEY
It’s about aligning your investments to the right places
with the intention of driving large-scale change.
It’s not just about MORE DATA
It’s about investing in your data, deliberately
yet pragmatically, to drive the right insights.
It’s not just about a SINGLE LEADER
It’s about building multi-disciplinary teams that bring
the right capabilities.
18AI: BUILT TO SCALE
Scaling the exponential power of AI with digital platforms
across the enterprise is a journey. Those that take on the
lessons of each path will reach a place where business
strategies are seamlessly fused with analytics, leverage a
reusable data foundation, and scale through platforms.
The result: Industrialized growth through unassailable
competitive strength in everything from organizational
effectiveness to brand perception and trust.
Smoothscaling
Contact the authors to find out more about
how to increase value through scaling AI.
19AI: BUILT TO SCALE
Aboutthe
research
Our research involved 1,500 C-suite
executives from companies with a minimum
revenue of US$1 billion in 12 countries around
the world across 16 industries, with the aim to
uncover the success factors for scaling AI.
Our research, and that of our partners in our
ecosystem, employs ethical and responsible
research methods. Respondents reveal their
identities voluntarily, we anonymize all data
from companies in our data set, and report
results in aggregate. We commit to not using
the data collected to personally identify the
respondents and/or contact the respondents.
Titles
Chief Information Officer (CIO) (441)
Chief Financial Officer (CFO) (231)
Chief Operating Officer (COO) (215)
Chief Digital Officer (136)
Chief Innovation Officer (114)
Chief Data and/or Analytics Officer (113)
Chief AI Officer (93)
Chief Strategy Officer (59)
VP/SVP of AI/ Data/Analytics (98)
16 industries
Banking  Capital Markets (100)
Chemicals (100)
Communications (100)
Consumer Goods  Services (100)
Energy (Oil  Gas) (100)
Healthcare (Payers) (100)
High Tech (100)
Industrial Equipment (100)
Insurance (100)
Life Sciences
(Pharma  Biotech) (100)
Metals and Mining (100)
Retail (100)
Software  Platforms (100)
Travel  Transport
(Hotels  Passenger) (100)
Utilities (100)
12 Countries
Brazil (115)
Canada (113)
China (139)
France (105)
Germany (116)
India (126)
Italy (113)
Japan (117)
Singapore (101)
Spain (106)
United Kingdom (116)
United States (233)
US$10.1 - $30 billion
More than
US$30 billion
US$5.1 - $10 billion
US$1 - $5 billion
510
469
323
198
Revenue (n=1,500)
20AI: BUILT TO SCALE
Contributors
DhruvJain
Senior Principal, Accenture Strategy
SandraReese
Managing Director, Accenture Strategy
ChadVaske
Senior Manager, Accenture Applied Intelligence
@AccentureStrat
www.linkedin.com/company/
accenture-strategy
@AccentureAI
www.linkedin.com/company/
accentureai/
Jointheconversation
LynnLaFiandra
Senior Principal, Accenture Research
21AI: BUILT TO SCALE
Copyright © 2019 Accenture.
All rights reserved. Accenture and its logo are registered trademarks of Accenture.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining
unmatched experience and specialized skills across more than 40
industries and all business functions — underpinned by the world’s
largest delivery network — Accenture works at the intersection of
business and technology to help clients improve their performance
and create sustainable value for their stakeholders. With 482,000
people serving clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives.
Visit us at  www.accenture.com
About Accenture Strategy
Accenture Strategy combines deep industry expertise, advanced
analytics capabilities and human-led design methodologies that
enable clients to act with speed and confidence. By identifying
clear, actionable paths to accelerate competitive agility, Accenture
Strategy helps leaders in the C-suite envision and execute
strategies that drive growth in the face of digital transformation.
For more information, follow @AccentureStrat or visit
www.accenture.com/strategy
About Accenture Applied Intelligence
Applied Intelligence is Accenture’s approach to scaling AI for our clients.
We embed AI-powered data, analytics and automation capabilities into
business workflows to accelerate time to value. Our expertise in defining
end-to-end strategy, combined with deep data infrastructure
capabilities, cognitive services and industrialized accelerators help
smooth clients’ path to AI adoption, extending human capabilities and
supporting clients in scaling AI responsibly. Recognized as a leader by
industry analysts, we collaborate with a powerful global alliance,
innovation and delivery network to help clients deploy and scale AI
within any market and industry.
Follow @AccentureAIand visit accenture.com/appliedintelligence
About Accenture Research
Accenture Research shapes trends and creates data-driven insights
about the most pressing issues global organizations face. Combining
the power of innovative research techniques with a deep
understanding of our clients’ industries, our team of 300 researchers
and analysts spans 20 countries and publishes hundreds of reports,
articles and points of view every year. Our thought-provoking
research—supported by proprietary data and partnerships with
leading organizations, such as MIT and Harvard— guides our
innovations and allows us to transform theories and fresh ideas into
real-world solutions for our clients.
For more information, visit www.accenture.com/research

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AI: Built To Scale

  • 1. Provocative thinking, transformative insights, tangible outcomes AI:BUILT TOSCALEFrom experimental to exponential Achieve competitive agility
  • 2. Abouttheauthors Ketan leads Strategy & Consulting across all Accenture Applied Intelligence industry and functional practices. Ketan partners with Fortune 500 C-suite executives and board members to transform their digital and analytics operating models by applying intelligence through design-thinking, AI, data strategy and a cloud-based platform ecosystem. He teaches AI at both the Kellogg School of Management & McCormick School of Engineering at Northwestern University. Ketan in based in Chicago, Illinois. KetanAwalegaonkar Managing Director Accenture Applied Intelligence Robert has over 20 years of experience shaping and delivering enterprise analytics strategy and transformation programs for Fortune 500 clients, including value targeting, operating model & talent, analytic delivery models, data & technology architecture and employee adoption programs. He has co-authored several white papers on analytics transformation including “The Insight-Powered Enterprise” and “Preparing for a Data Science Transformation”, and co-created Accenture’s Analytics Diagnostic (patent pending). Robert is based in Portland, Oregon. RobertBerkey Managing Director Accenture Applied Intelligence Greg leads Communications, Media and Technology within Accenture Strategy. His role focuses on helping clients worldwide achieve high performance through profitable growth, accelerated innovation, organizational agility, and operational excellence. Greg has over 25 years of consulting experience across the telecom, media, technology and retail industries, having focused on new digital business launches, strategic digital planning, business growth strategies and cost transformation. Greg is based in Dallas, Texas. GregDouglass Senior Managing Director Accenture Strategy Athena helps C-suite leaders address some of their top challenges, including changing business models, managing data volumes, addressing analytics immaturity and transitioning away from legacy technology. For 20 years, Athena has guided teams in developing actionable strategies and plans to create more value through analytics and define the optimal technology footprint. A frequent commentator on digital trends in national and global media publications, Athena is based in San Francisco, California. AthenaReilly Managing Director Accenture Strategy 2AI: BUILT TO SCALE
  • 3. A full 84% of C-suite executives believe they must leverage Artificial Intelligence (AI) to achieve their growth objectives. Nearly all C-suite executives view AI as an enabler of their strategic priorities. And an overwhelming majority believe achieving a positive return on AI investments requires scaling across the organization. Yet 76% acknowledge they struggle when it comes to scaling it across the business. What’s more, three out of four C-suite executives believe that if they don’t scale AI in the next five years, they risk going out of business entirely. With the stakes higher than ever, what can we learn from companies that successfully scale AI, achieving nearly 3x the return on investment and a 30% premium on key financial valuation metrics? THENUMBERS TELLTHESTORY ofexecutivesbelieve theyriskgoingout ofbusinessin5years iftheydon’tscaleAI 75% ofexecutives strugglewithhow toscaleAIacross thebusiness 76% ofexecutivesbelieve theywon’tachieve theirgrowthobjectives unlesstheyscaleAI 84% 3AI: BUILT TO SCALE
  • 4. Nail it, then scale it To answer that question, Accenture conducted a landmark global study involving 1,500 C-suite executives from organizations across 16 industries. The study focused on determining the extent to which AI enables the business strategy, the top characteristics required to scale AI, and the financial results when done successfully. The aim: Help companies progress on their AI journey, from one-off AI experimentation to gaining a robust organization-wide capability that acts as a source of competitive agility and growth. Three distinct groups of companies with increasing levels of capability required to successfully scale AI emerged from the research. ProofofConcept Factory In our experience, most companies (80-85%) are stuck on this path.They conduct AI experiments and pilots but achieve a low scaling success rate and a low return on their AI investments. Their efforts tend to be siloed within a department or team and are often IT-led. They lack a connection to a business outcome or strategic imperative. The time and investment it takes to scale is underestimated, leaving the full potential of AI untapped. 01 StrategicallyScaling Only 15-20% of companies have made this leap. These companies have journeyed beyond proof of concept to achieve a much higher success rate scaling AI—nearly double. And a much higher return—nearly three times their counterparts. As a C-suite priority, these companies have a clear AI strategy and operating model linked to the company’s business objectives, supported by a larger, multi-dimensional team championed by the Chief AI, Data or Analytics Officer. However, the scaled AI is generally across point solutions, e.g., personalization. 02 Industrialized forGrowth Very few (5%) companies have progressed to this point on their AI journey. These companies have a digital platform mindset and create a culture of AI with data and analytics democratized across the organization. They have scaled thousands of models with a responsible AI framework. They promote product and service innovation and realize benefits from increased visibility into customer and employee expectations. Our research indicates that industrializing AI will enable competitive differentiation which is correlated with significantly higher financial results. 03 Whatdo wemean? ArtificialIntelligence(AI)encompasses multiple technologies that enable computers to sense, comprehend, act, and learn. AI includes techniques such as machine learning, natural language processing, knowledge representation, computational intelligence, among others. Pilot:Rolling out a capability with real data, users and processes in a production environment (using a subset of the relevant scope). The purpose is to test how the capability performs with a limited scope and to make any needed modifications before expanding to the full applicable scope. Scale: Extension of the piloted capability across the full applicable scope with all relevant data, end users, customers, and processes. Purpose is to maximize the application’s value to the organization. 4AI: BUILT TO SCALE
  • 5. Payingdividends: Provenpremiumvalue The C-suite executives surveyed reported positive ROI on their AI investments. We dug deeper. Was there any relationship between successfully scaling AI across the enterprise and key market valuation metrics? What was the “premium” for being a leader? Using survey data combined with publicly available financial data, our team of data scientists created a model to identify the premium for companies in our sample that successfully scale AI, controlling for various characteristics of the companies. We discovered a positive correlation between successfully scaling AI and three key measures of financial valuation: Enterprise Value/ Revenue Ratio, Price/Earnings Ratio, Price/Sales Ratio. Companies that were identified as Strategic Scalers realize a success rate of 70% or more in their AI scaling initiatives and a return on their AI investment of 70% or higher. Price/Sales Ratio+28% Price/Earnings Ratio+33% Enterprise Value/ Revenue Ratio+35% 5AI: BUILT TO SCALE
  • 6. 32% Proofof Concept US $110m gap 86% Strategic Scalers When the 1,500 companies in our research were analyzed collectively, US$306 billion was spent on AI applications in the past three years. The ROI gap amongst them was significant. On average, it spanned US$110 million between companies stuck in Proof of Concept and those who have progressed to becoming Strategic Scalers.1 Overall reported spend on Artificial Intelligence initiatives over the past three years Thegreatdivide The difference in return on AI investments between companies in the Proof of Concept stage and Strategic Scalers equates to an average of US$110 million. $10 million or less $11-$50 million Between $101-$500 million 9% 38% 14% 14%26% Over $500 million Between $51-$100 million 6AI: BUILT TO SCALE
  • 8. AI’s evolutionary paths to growth ProofofConcept Factory • Analyticsburieddeepandnota CEOfocus • SiloedoperatingmodeltypicallyIT-led • Unabletoextractvaluefromtheirdata • Struggletoscaleasunrealistic expectationsontimerequired • Significantunderinvestment,yielding lowreturns 01 StrategicallyScaling • CEOfocuswithadvancedanalyticsand datateamsolvingbigrockproblems • Multi-disciplinaryteamsof200+ specialistschampionedbyChiefAI, DataorAnalyticsOfficer • Abletotuneoutdatanoiseandfocus onessentials • Intelligentautomationandpredictive reporting • Catchupondigital/AI/dataassetdebt • Experimentalmindsetachievingscale andreturns 02 Industrialized forGrowth • Digitalplatformmindsetandenterprise cultureofAIdemocratizingreal-time insightstodrivebusinessdecisions • Clearenterprisevision,accountability, metrics,andgovernancebreaking downsilos • ‘Whatif’analysisenablingimproved acquisition,serviceandsatisfaction • Responsiblebusinesspractices enhancingbrandperceptionandtrust • Competitivedifferentiatorandvalue creatordrivinghigherP/Emultiples 03 8AI: BUILT TO SCALE
  • 9. The research revealed three critical success factors that separate those that have progressed to Strategically Scaling and those still in Proof of Concept. Strategic Scalers: Drive“intentional”AI Tuneoutdatanoise TreatAIasateamsport 01 02 03 Roadblocksto scaling When executives ranked their top challenges for scaling AI, they placed “lack of budget” at the bottom of the list. A possible explanation: AI is a C-suite priority. So, while it may be challenging to decide which initiatives to fund first, the monetary resources, overall, aren’t a problem. Among the top challenges? The inability to set up a supportive organizational structure, the absence of foundational data capabilities, and the lack of employee adoption. As the study shows, it’s exactly these aspects where Strategic Scalers outperform their counterparts in Proof of Concept. 9AI: BUILT TO SCALE
  • 10. Drive“intentional”AI Creating value from AI requires leaders to anchor AI in C-suite objectives. Toallintents andpurposes Most global organizations today believe passionately in the value of data and analytics. But one life sciences company had been struggling to move from theory to execution in implementing data and insights capabilities across all its business divisions. And they had a vision to scale a collaborative data-powered service delivery model to create an internal marketplace for FAIR (findable, available, interoperable, reusable) data. Working with data and digital leadership, the multi-functional team designed and delivered a holistic data and analytics strategy while achieving immediate value through targeted use-cases in each of the key areas of the business. In addition to architecting and standing up the new scalable data and analytics delivery model, they created a model to make data search easier and more intuitive and embedded a new data- driven culture within the organization. The result? The company’s digital transformation is speeding ahead, powered by data analytics insights across its business. Strategic Scalers pilot and successfully scale more initiatives than their Proof of Concept counterparts—at a rate of 2:1—and set longer timelines. They are 65% more likely to report a timeline of one to two years to move from pilot to scale. And even though they achieve more, Strategic Scalers spend less. At first glance it may seem paradoxical. But the data indicate that these leaders are more intentional, with a more realistic expectation in terms of time to scale—and what it takes to do so responsibly. To successfully scale, companies need structure and governance in place. And the Strategic Scalers have both. Nearly three-quarters of them (71%) say they have a clearly-defined strategy and operating model for scaling AI in place, while only half of the companies in Proof of Concept report the same. Strategic Scalers are also far more likely to have defined processes and owners with clear accountability and established leadership support with dedicated AI champions. Initiatives not firmly grounded in business strategy and lacking a governance construct to oversee and manage are slower to progress. Turf wars break out over who “owns” AI and data. And, regardless of the AI platforms used, or the know-how recruited, misaligned efforts fall flat. 01 ForStrategic Scalers,8of10 scalinginitiatives aresuccessful 10AI: BUILT TO SCALE
  • 11. Sizingup thesituation The “smaller” companies in our study generated revenues between US$1 and 5 billion a year. The largest had revenues of more than US$30 billion. When it comes to scaling AI, are there any major differences between these two groups of companies? Do the largest companies face lower scaling success rates due to their organizational complexity? Or, quite the opposite, do they achieve higher returns as they untap greater value potential? When we grouped the surveyed companies by size, we found no significant differences in scaling success rate or return on AI investments. So, size is not a factor. It’s all about instilling the right AI capabilities and mindset in the organization. Dothebasicsbrilliantly When it comes to scaling AI, Strategic Scalers do the basics brilliantly. Compared to companies in Proof of Concept, they have a clearly defined strategy and operating model for AI, defined process and owners for measuring value from AI, clearly defined accountability, appropriate levels of funding, and flexible business processes with embedded AI. They also scale through reusable assets on platforms, so successive AI programs are 3-5X faster to market at lower spend. +26% Flexiblebusiness processeswith embeddedAI Clearlydefined strategyandoperating modelforscaling +60% Clearlydefined accountability forscaling +50% Appropriate leveloffunding +30% Definedprocessand ownersformeasuring valuefromAI +27% Packagedorcustom builtAIapplications forscaling +50% 11AI: BUILT TO SCALE
  • 12. Newproduct offerings Organization effectiveness/ workforce productivity Flexiblebu withembe Customer service Customer satisfaction Customer acquisition Customer trust Product/ brand perception Speed management efficiency Working capital utilization Optimizationinaction With a continuously evolving competitor and customer landscape, a major North American technology company with global reach needed a dynamic integrated approach for its vast and complex supply chain. A mix of open source machine learning tools was used to analyze a range of factors including demand uncertainty, cost drivers, customer relationships, and rate of technological change. Personalized supply chain strategies for four key segments were created with synergies pinpointed to reduce complexity and maintain economies of scale. The result? A personalized supply chain transformation with AI at the core driving new efficiency and effectiveness: 30% faster speed to delivery with 2X more accurate forecasting. Operating income up 45% with a reduction in manufacturing and freight costs of over 25%. Product availability improved over 35%, while overall supply chain was streamlined with over 90% fewer product configurations. moreaccurate forecasting2X increasein operatingincome45% Benefitsacrossthebusiness Companies from around the world and across industries are using AI to change the fabric of what they do and how they do it. Strategic Scalers are more likely to achieve a range of benefits including: 12AI: BUILT TO SCALE
  • 13. Tuneoutdatanoise Strategic Scalers recognize the importance of managing data. 02 Ninety percent of the data in the world was created in just the past 10 years. One-hundred and seventy-five zettabytes of data will be created by 2025. Yet after years of collecting, storing, analyzing, and reconfiguring troves of information, most organizations struggle with the sheer volume of data and how to cleanse, manage, maintain, and consume it. Strategic Scalers tune out “the noise” surrounding data. They recognize the importance of business-critical data— identifying financial, marketing, consumer, and master data as priority domains. And Strategic Scalers are more adept at structuring and managing data. They have invested heavily in data quality, data management, and data governance frameworks on the cloud. And they have clear operating models for generation versus consumption of data. The research shows they are much more likely to wield a larger, more accurate data set (61% versus 38% of respondents in Proof of Concept). And 67% of Strategic Scalers integrate both internal and external data sets as a standard practice compared to 56% of their Proof of Concept counterparts. What’s more, they use the right AI tools—things like cloud-based data lakes, data engineering/data science workbenches with model management and governance, data and analytics marketplaces and search—to manage the data for their applications. From creation to custodianship to consumption. Strategic Scalers understand the importance of using more diverse datasets to support initiatives. Strategic Scalers vs54% Companiesinthe ProofofConceptstage 37% Myorganization recognizesthe importanceofourcore dataasthefoundationto scalingAI. StrategicScalersstronglyagree: 13AI: BUILT TO SCALE
  • 14. Mastersoftheirdata Strategic Scalers invest in a data foundation that enables them to scale AI. Strategic ScalersProof of Concept Tappingintodata With beer sales declining and competitors drinking up market share on all sides, brewers are under increasing pressure to find new growth. One global brewer found a solution by tapping into new intelligence. The latest machine learning techniques helped overcome data veracity issues and develop more accurate forecasting models, improved consumer and customer segmentations, and enhanced sales incrementality. Their new advanced analytics capabilities are scaled to over 100+ global datasets, including sales and forecast data, social media, trade spend, customer and product master data, even weather data. They get actionable data-driven insights in front of their key business decision makers, from commercial intelligence to sales and marketing, at unprecedented speed and scale. The result: A return of four times the investment in the first year alone. 14AI: BUILT TO SCALE
  • 15. TreatAI asateamsport The effort of scaling calls for embedding multi-disciplinary teams throughout the organization in addition to having sponsorship from the top. 03 The effort of scaling calls for embedding multi-disciplinary teams throughout the organization—teams with clear sponsorship from the top ensuring alignment with the C-suite vision. For Strategic Scalers, these teams are most often headed by the Chief AI, Data or Analytics Officer. They’re comprised of data scientists; data modelers; machine learning, data and AI engineers; visualization experts; data quality, training and communications specialists. It’s a lesson Strategic Scalers have learned well. In fact, a full 92% of them leverage multi-disciplinary teams. Embedding them across the organization is not only a powerful signal about the strategic intent of the scaling effort, it also enables faster culture and behavior changes. In contrast, those still in Proof of Concept are more likely to rely on a lone champion within the technology organization to drive AI efforts. The“A”and“I” inteam A leading global convenience store chain with $60B in revenue and 16,000 locations sought to gain a more competitive position to stave off more agile rivals. They leveraged data science to price their products more competitively to better match customer demand across global markets. Leveraged machine learning and automation to increase pricing frequency. And established virtual agents to interact with their global category management teams to drive adoption of the new pricing approach. All of these changes were made possible thanks to multi-disciplinary teams with skills in areas like data engineering, visualization, data quality, and human-centered design. The initiative is expected to deliver an expected US$300 million in gross profit uplift annually once fully scaled. ofStrategic Scalersleverage multi-disciplinary teams 92% 15AI: BUILT TO SCALE
  • 16. Allhandsondeck Companies achieving success scaling AI initiatives are more likely than their Proof of Concept counterparts to ensure their employees are prepared for the journey: Formal training: 1.5x Fully understand how AI applies to role: 2x Understand implement responsible AI: 1.7x As companies journey toward maturity in scaling AI, new skill sets emerge as critical to success. Things like human-centric design and social and behavioral sciences to drive responsible business practices. The better the blend of skills, the more sustainable the end result. Those leading the pack ensure employees have ongoing formal training, an understanding of how AI applies to their role, and understand and implement responsible AI. Because AI teams are embedded throughout the organization, and not cordoned off in special projects, the wider employee base has an opportunity to work side-by-side with them and appreciate how AI accelerates organizational goals. Experience is another differentiator when it comes to success. Nearly half of all Strategic Scalers compared with just a third of respondents in Proof of Concept report having the necessary experience. The sheer volume speaks for itself: Strategic Scalers have successfully scaled 114 initiatives on average, compared with just 53 for those in Proof of Concept. 16AI: BUILT TO SCALE
  • 17. Realizingthepotential Industrializing for Growth is a dynamic destination. It’s important to note that Industrializing for Growth is a dynamic destination that changes as technology evolves. From our experience, we know of three additional variables that speed companies along their journey to the ultimate destination: A data-driven culture where AI is driving exponential returns. Focus on the ‘I’ in ROI The C-suite views AI investment as the cost of doing business. They earmark budget for AI recognizing its criticality for future growth and spend without the need to prove ROI in advance to justify the investment. Adopt a digital platform mindset to scale The two main objectives of platforms are acceleration and extended value. Publishing data on a platform once for products to consume through APIs and microservices is more cost effective. It also drives scale by breaking down silos and democratizing data and insights enabling greater collaboration and innovation across the enterprise and broader ecosystem of partners. Build trust through Responsible AI Responsible AI entails creating a framework that ensures the ethical, transparent and accountable use of technologies in a manner consistent with user expectations, organizational values and societal laws and norms. Responsible AI can guard against the use of biased data or algorithms, ensure that automated decisions are justified and explainable, and help maintain user trust and individual privacy. 17AI: BUILT TO SCALE
  • 18. Scalingto newheightsof competitiveness There are reams of information on the “what”of AI. But scaling new heights of competitiveness with AI requires understanding the “how.” And at times eschewing conventional wisdom that continues to emerge as AI evolves. It’s not just about SPEED It’s about moving deliberately, in the right direction. It’s not just about MONEY It’s about aligning your investments to the right places with the intention of driving large-scale change. It’s not just about MORE DATA It’s about investing in your data, deliberately yet pragmatically, to drive the right insights. It’s not just about a SINGLE LEADER It’s about building multi-disciplinary teams that bring the right capabilities. 18AI: BUILT TO SCALE
  • 19. Scaling the exponential power of AI with digital platforms across the enterprise is a journey. Those that take on the lessons of each path will reach a place where business strategies are seamlessly fused with analytics, leverage a reusable data foundation, and scale through platforms. The result: Industrialized growth through unassailable competitive strength in everything from organizational effectiveness to brand perception and trust. Smoothscaling Contact the authors to find out more about how to increase value through scaling AI. 19AI: BUILT TO SCALE
  • 20. Aboutthe research Our research involved 1,500 C-suite executives from companies with a minimum revenue of US$1 billion in 12 countries around the world across 16 industries, with the aim to uncover the success factors for scaling AI. Our research, and that of our partners in our ecosystem, employs ethical and responsible research methods. Respondents reveal their identities voluntarily, we anonymize all data from companies in our data set, and report results in aggregate. We commit to not using the data collected to personally identify the respondents and/or contact the respondents. Titles Chief Information Officer (CIO) (441) Chief Financial Officer (CFO) (231) Chief Operating Officer (COO) (215) Chief Digital Officer (136) Chief Innovation Officer (114) Chief Data and/or Analytics Officer (113) Chief AI Officer (93) Chief Strategy Officer (59) VP/SVP of AI/ Data/Analytics (98) 16 industries Banking Capital Markets (100) Chemicals (100) Communications (100) Consumer Goods Services (100) Energy (Oil Gas) (100) Healthcare (Payers) (100) High Tech (100) Industrial Equipment (100) Insurance (100) Life Sciences (Pharma Biotech) (100) Metals and Mining (100) Retail (100) Software Platforms (100) Travel Transport (Hotels Passenger) (100) Utilities (100) 12 Countries Brazil (115) Canada (113) China (139) France (105) Germany (116) India (126) Italy (113) Japan (117) Singapore (101) Spain (106) United Kingdom (116) United States (233) US$10.1 - $30 billion More than US$30 billion US$5.1 - $10 billion US$1 - $5 billion 510 469 323 198 Revenue (n=1,500) 20AI: BUILT TO SCALE
  • 21. Contributors DhruvJain Senior Principal, Accenture Strategy SandraReese Managing Director, Accenture Strategy ChadVaske Senior Manager, Accenture Applied Intelligence @AccentureStrat www.linkedin.com/company/ accenture-strategy @AccentureAI www.linkedin.com/company/ accentureai/ Jointheconversation LynnLaFiandra Senior Principal, Accenture Research 21AI: BUILT TO SCALE
  • 22. Copyright © 2019 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture. About Accenture Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions — underpinned by the world’s largest delivery network — Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 482,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at  www.accenture.com About Accenture Strategy Accenture Strategy combines deep industry expertise, advanced analytics capabilities and human-led design methodologies that enable clients to act with speed and confidence. By identifying clear, actionable paths to accelerate competitive agility, Accenture Strategy helps leaders in the C-suite envision and execute strategies that drive growth in the face of digital transformation. For more information, follow @AccentureStrat or visit www.accenture.com/strategy About Accenture Applied Intelligence Applied Intelligence is Accenture’s approach to scaling AI for our clients. We embed AI-powered data, analytics and automation capabilities into business workflows to accelerate time to value. Our expertise in defining end-to-end strategy, combined with deep data infrastructure capabilities, cognitive services and industrialized accelerators help smooth clients’ path to AI adoption, extending human capabilities and supporting clients in scaling AI responsibly. Recognized as a leader by industry analysts, we collaborate with a powerful global alliance, innovation and delivery network to help clients deploy and scale AI within any market and industry. Follow @AccentureAIand visit accenture.com/appliedintelligence About Accenture Research Accenture Research shapes trends and creates data-driven insights about the most pressing issues global organizations face. Combining the power of innovative research techniques with a deep understanding of our clients’ industries, our team of 300 researchers and analysts spans 20 countries and publishes hundreds of reports, articles and points of view every year. Our thought-provoking research—supported by proprietary data and partnerships with leading organizations, such as MIT and Harvard— guides our innovations and allows us to transform theories and fresh ideas into real-world solutions for our clients. For more information, visit www.accenture.com/research