Firms should use AI techniques to generate new revenue rather than cut costs.
This was one of several findings of MIT’s Sloan Management Review’ 2018 Global Executive Study on AI.
The MIT Sloan study points out that companies that are early AI adopters will gain a big advantage over the competition in the generation of new business. Among the key interview subjects was Clariant’s Britta Fuenfstueck:
Fuenfstueck makes a compelling argument that this highest benefit will come from revenue-focused initiatives rather than in efforts to improve the efficiency of internal processes. This is “because any NPV [net present value] of an external business by far outperforms any internal one.” She points out that failing to jump on an internal process improvement opportunity means “you just miss out on a year of EBITDA [earnings before interest, taxes, depreciation, and amortization] improvement.” A much higher penalty is incurred by missing an opportunity in the external market. “If you were late with a new business model, somebody else will have driven it and you will have lost your chance forever,” Fuenfstueck says. “So, this has to be the rule of prioritization.”
