Artificial intelligence boosts digital commerce
The use of artificial intelligence (AI) in digital commerce is generally considered a success.
This is according to a survey by market analyst firm Gartner, which conducted a survey of 307 digital commerce organisations globally to understand AI adoption and investment plans in digital commerce.
The firm says about 70% of the companies surveyed report their AI projects are successful.
Three-quarters of respondents said they are seeing double-digit improvements in the outcomes they measure.
The most common metrics used to measure the business impact of AI are customer satisfaction, revenue and cost reduction, for which respondents cited improvements of 19%, 15% and 15%, respectively.
Gartner predicts that by 2020, AI will be used by at least 60% of digital commerce organisations, and 30% of digital commerce revenue growth will be attributable to AI technologies.
"Digital commerce is fertile ground for AI technologies, thanks to an abundance of multidimensional data in both customer-facing and back-office operations," says Sandy Shen, research director at Gartner.
Gartner points out that despite early success, digital commerce organisations face significant challenges implementing AI.
The survey shows a lack of quality training data (29%) and in-house skills (27%) are the top challenges in deploying AI in digital commerce. AI skills are scarce and many organisations don't have these in-house and will have to hire from outside or seek help from external partners, says Gartner.
On average, 43% of respondents chose to custom-build the solutions developed in-house or by a service provider. In comparison, 63% of the more successful organisations are leveraging a commercial AI solution.
"Solutions of proven performance can give you higher assurance as those have been tested in multiple deployments, and there is a dedicated team maintaining and improving the model," says Shen.
"Organisations looking to implement AI in digital commerce need to start simple," she notes. "Many have high expectations for AI and set multiple business objectives for a single project, making it too complex to deliver high performance. Many also run AI projects for more than 12 months, meaning they are unable to quickly apply lessons learned from one project to another."
On average, respondents spent $1.3 million on development for an AI project in digital commerce. However, of the more successful organisations, 52% spent less than $1 million on development, 20% spent $1 million to $2 million, and 9% spent more than $5 million.
To increase the likelihood of success, Gartner advises digital commerce leaders to assess talent. If there is insufficient AI talent in-house to develop and maintain a high-performance solution, go with a commercial solution of proven performance, Gartner urges.
It also recommends organisations to aim for under 12 months for a single AI project. Divide larger projects into phases and aim for under 12 months for the first phase, from planning, development and integration to complete launch, says Gartner.
Organisations must also ensure adequate funding. Allocate the majority of the budget to talent acquisition, data management and processing, as well as integration with existing infrastructure and processes. Sufficient funding also helps secure high-performance solutions.