AI strategising is smart thinking, guest blog by Darren Auld, CEO and co-founder of ClearSky Logic
/The flurry of activity around Scotland’s first National Innovation Week in late September and the FinTech Scotland Festival that ran alongside it showed that the conversation around AI and digital transformation has stepped up significantly over the last year.
And, in related news, it was encouraging to see the £1 million of Scottish Government funding for SMEs to introduce or expand the use of AI to develop new products and services, grow market share and attract new investment - delivered by Scottish Enterprise, Highlands and Islands Enterprise, South of Scotland Enterprise, The Data Lab, and the Scottish AI Alliance.
Of course, the real engine of technological change in Scotland comes from our entrepreneurs and business leaders. Scotland is a nation of problem solvers, known for achieving outsized global impact. The next few years will reveal whether or not we can grasp the vast opportunities for innovation and growth offered by AI.
However, a report by the Massachusetts Institute of Technology (MIT) in August found that AI adoption is anything but straightforward. Despite tens of billions of enterprise investment in generative artificial intelligence, AI pilot failure is the norm, with 95 per cent of corporate AI initiatives showing zero return according to academic powerhouse MIT.
So, if only about 5 per cent of AI pilots have made it into production with measurable value, what can businesses do to improve their chances of AI success? At ClearSky, we talk about bringing AI to the data, by building small, purpose-built models that live securely within your organisation’s existing systems.
The focus needs to be on the back office, targeting structured, high-volume processes first in order to achieve clear and transformative return on investment (ROI). We must embrace a ‘human in the loop’ model’, designing AI to augment human expertise. This is how we can move beyond the hype and become part of the 5 per cent identified by MIT.
Essentially, are we brave enough to really think big about the radical change, innovation, and opportunity AI presents?
Last year, we polled SME leaders across Scotland on AI strategy and adoption. While only around 1 in 2 of our business leaders had already invested in AI, almost 90 per cent planned to invest in AI. One of the stark findings of the survey was that only 20 per cent of companies had trialled AI before implementing it.
When we engage with clients, partners and peers, we talk about a four pillar approach that helps to make the AI journey as effective as possible, while de-risking the investment as much as possible. Companies need to identify their core challenge or challenges, utilise high quality data, test AI via pilot projects, and then continually evolve AI within their business.
Our SME AI survey also revealed the importance of having a strong AI strategy in place. Without a strategy that aligns across every aspect of your business, AI is more likely to lead problems rather than solutions.
As we go out with this year’s AI survey shortly, it will be interesting to see how the dial has moved in 2025.