Why do most AI projects fail ?
AI is a business superpower on the rise
By: Anas A. Abdul-Haiy, Director and Deputy CEO of Proven Consult
Why do most AI projects fail?
Verticals determining any project’s success vary even within the same field or even within the very same project down the timeline. This is the case, especially in AI, a relatively new field fueling business worldwide and shifting investors’ attention to more technologically powered, sustainable and cost-effective solutions. AI is a business superpower on the rise; Saudi Arabia hosted the Global AI Summit in October 2020, revealing an elaborate, market-wide AI strategy. The strategy aims to train up to 20,000 data and AI experts and set up 300 AI-focused startups. This is predicted to generate up to $20 billion in investment by the year 2030.
If Government can use AI to develop whole nations, it’s then a tool to shift the way the world works, and a lot of decision-makers are noticing this as more than a trend and as a gateway into a healthier, more sustainable future.
The enthusiasm to jump on the AI train is understandable and encouraged. Still, AI’s success depends on the complete universe of data being captured and analyzed through a large-scale database with continuous analysis of the convergence between predictive and real-time data.
Premature failure of AI projects is a common concern and one that is legitimate; recent numbers show 85% of all AI projects fail, sometimes before they have even been initiated—Why? Well, oftentimes, these big projects are misaligned with business priorities. Especially today, many businesses are invested in keeping their traditional processes going, so embarking on such an altering project is not likely to make the top priorities list.
AI is expensive. Spending on AI projects and solutions will hit the $58 billion mark within the next few years. Many companies tend to take a leap into a sea of information and end up with one takeaway: AI helps cut cost. While this is true, the results take time, effort and skills, from partnering with the right solution providers to hiring the perfect candidates to administer AI projects. Many companies will initiate and then withdraw when the costs are fully evaluated compared to the results. This is why strategizing AI projects is essential to success but still does not guarantee it.
While the strategy is vertical in business, generally, it’s simply not enough in AI-focused projects. Financial strategy without expertise is like throwing money on a problem; it simply won’t work. AI is new. This means there is a lack of the proper skills in the market. For reasons like this, governments turn to train programs, pumping capital into developing a solid generation of skilled AI engineers, scientists, and businesspersons.
This relatively new field makes investment tricky also because there isn’t enough history behind it. In a way, it’s an age of trial and error, and error often means massive losses and premature failure. This happens a lot; many AI projects start big, with ambition and hope backing up high-complexity work.
This relates to the way AI is described as a risky business. It’s considered an expensive tool that is hard to measure and maintain. However, developing a strategy and approach can set companies on the right path. It must always start with a problem the business is facing and a question; ‘Can AI solve it?’ A strategy can then be designed and set with the proper and regular measuring of ROI. There is more to this, however.
Part of why AI is often met with dissatisfaction, contributing to many businesses choosing safer options, is the ambiguity and myth surrounding it. For the longest time, it seemed like this technological leap was a thing for film and literature. When investors go into AI, they have a hard time managing and adjusting their expectations. Businesses investing massive efforts and capital in AI often focus on the technology instead of the business. AI adoption must be a step-by-step process, starting with why the business needs it and how it can help. AI can, for example, accurately predict valuable information based on data, but it cannot function as intricately as the human brain.
An AI solution will work for a business through data and the quality of data it is fed with. This poses another threat to AI projects and is considered a major contributing factor in their failure. The term ‘Big Data’ came about as tech giants started taking over the global business sphere.
The concept is quite enigmatic because ‘how big is big,’ one might ask. Well, really big. AI requires a lot of data to deliver, and the more, the better. If a company is small, with not much data to go from, the company must scale expectations to that data availability level. The data must also be relevant to the problem the AI solution is designed to solve, and oftentimes such intricacies aren’t even considered.
AI is risky, but the rewards can bring cost-cutting and long-term success to a business. It is most crucial to consider data quality and availability when AI adoption is on the table. Strategy, success and failure measurement criteria are also determining steps in the adoption process. Meanwhile, globally, the direction business is going towards should solve low skill levels and expertise in the field.