A recent survey conducted by leading IT market research and advisory firm IDC titled IDC Asia/Pacific Enterprise Cognitive/AI survey highlights that AI adoption in the region is on the rise. Current AI adoption rates stand at 14% across Southeast Asia as compared to just eight percent last year, marking a clear move by companies to embed some form of AI/cognitive intelligence into their operations.
Discovery of better business insights has become the most important adoption driver according to more than half (52%) of respondents, moving from third most important in 2017, revealing a maturity in the way the region is harnessing AI to enhance their business. Other top drivers this year are enhanced process automation (51%), and improved productivity (42%).
With 24.6% of organizations in Indonesia adopting AI, the country leads the pack in terms of adoption, followed by Thailand (17.1%), Singapore (9.9%) and Malaysia (8.1%). The top use cases in Southeast Asia include algorithmic market forecasting (17%), and automated asset and infrastructure management (11%).
“With its positive impact already visible across banking, manufacturing, healthcare and government, there are clear opportunities for more organizations in Southeast Asia to leverage AI to create differentiating value. We expect investments in AI to continue to rise, as more organizations begin to understand the benefits of embedding AI into their business and how data and analytics can help uncover new insights. Organizations that do not incorporate AI in their business operations will lose out to their AI-enabled peers who will benefit from the greater predictability, efficiency and innovation that advanced analytics can bring,” said Chwee Kan Chua, Global Research Director, Big Data and Analytics and Cognitive/AI, IDC Asia/Pacific.
Strategy still in flux, with high costs and lack of skilled talent top barriers to adoption
Despite the rise in adoption, organizations in the region are trailing behind those in North Asian countries, in terms of making AI a strategic agenda. For example, more than 80% of companies in China and South Korea believe AI capabilities will be critical for organizations’ success and competitiveness in the coming years, compared to less than 40% of companies in Singapore and Malaysia.
Lack of Skills & Knowledge (23%) and High Cost of Solutioning (23%) are among the most frequent barriers to adoption named by survey respondents.
While the overall adoption in Southeast Asia falls behind Asia/Pacific (excluding Japan), there are signs to suggest organizations in the region will catch up quickly. For example, 34% of organizations in Malaysia have plans to adopt AI within two years, the 2nd highest among Asia/Pacific countries.
In solidifying their strategy to turn AI into a differentiator for the business, companies find data from Sales, Commerce and Marketing to be the most ready, followed by that from Customer Service & Support operations, and IT, Security & Risk operations.
For those already embarking on their data-to-insights journey, there are varied challenges across sectors. Organizations in the financial services space face more challenges in data federation and model building, while public sector organizations are hindered by data readiness issues.
Malaysian companies to catch up AI capabilities to drive competitiveness
With a 32 percentage points jump in planned adoption of AI in 2 years since 2017, Malaysia’s increasing AI focus can be attributed to greater smart cities initiatives and applications in public safety and intelligent transportation. A lot of these initiatives would need more time to unfold and solidify.
However, the country’s adoption rate (8.1%) lags significantly behind Indonesia (24.6%) and Thailand (17.1%). Many Malaysian organizations have concerns on the cost of solutioning and doubts on the quality of model. Compared to North Asian economies, Malaysian organizations showed less enthusiasm in having in-house AI capabilities which can hinder their ability to understand AI solutions to strengthen their business.
More than 32% of companies in Malaysia prioritized speech and image recognition interfaces to improve customer experience and enhance omni-channel know-your-customer.
“AI is becoming more pervasive in Asia and Malaysia is no exception. Organizations in Malaysia are recognizing how AI and analytics can help solve complex problems and reveal unique insights, at the scale and speed required for our growing markets.” said Andy Zook, Vice President, ASEAN, SAS. “However, to really reap the benefits of AI, Malaysian companies must have a clear vision for their Big Data and AI investment. A key question organizations need to ask is “How does AI enhance my current staff and technology to drive improved business outcomes?” In the digital economy, AI and analytics are the drivers of organizational success and companies will need a clear path from data to innovation.”
The IDC Asia/Pacific Enterprise Cognitive/AI survey is an annual study undertaken to understand adoption trends, challenges and key barriers, and business priorities in the space. In 2018, a total of 502 executives and IT line-of-business heads across Asia Pacific (excluding Japan), were surveyed including 146 respondents from Southeast Asia (Singapore, Malaysia, Indonesia, Thailand).
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