AI adoption is on the rise in Southeast Asia as organizations solidify their AI strategy, with 37% having concrete adoption plans in place for the next five years, according to a new survey from IDC and SAS.
The IDC Asia/Pacific Enterprise Cognitive/AI survey reports that current AI adoption rates stand at 14% across Southeast Asia as compared to just 8% 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 survey notes that bimodal distribution is observed in Indonesia. While the country has the highest adoption rates amongst ASEAN countries surveyed, it also has the highest percentage of organizations with no plan to adopt AI within the next 5 years (59%). 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,” said Chwee Kan Chua, global research director for Big Data and Analytics and Cognitive/AI at IDC Asia/Pacific. “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.”
Top barriers: high costs and lack of skilled talent
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.
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.
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, 35% of organizations in Singapore have plans to adopt AI within two years, the highest among as Asia-Pacific countries.
Singapore is the relative laggard in Southeast Asia
Despite being the technology leader in the region, Singapore’s AI adoption rate (9.9%) lags behind Indonesia (24.6%) and Thailand (17.1%). A conservative outlook coupled with the inability to quantify business value and ROI from AI seem to be holding companies back, though an additional 35% of organizations plan to adopt soon.
More than a quarter of companies in Singapore reported lack of skills & knowledge as the top barrier to entry with concerns over AI technology putting their job at risks.
“AI is no longer a differentiator today but a disruptor transforming industries and cities. Automated AI systems, based on analytics, are reducing barriers of entry. Complex problems can now be solved more efficiently and at faster speed due to the availability of data and advanced technology,” said Randy Goh, managing director of SAS Singapore. “To reap the benefits of AI, Singapore companies must embed AI solutions into their business through the right skills, processes and technology and with the right business outcomes in mind. Just like data is the fuel of the new economy, analytics is the engine that will continue to drive businesses forward as AI starts to become mainstream.”
The IDC Asia/Pacific Enterprise Cognitive/AI survey covers 502 executives and IT line-of-business heads across Asia Pacific (excluding Japan), including 146 respondents from Southeast Asia (Singapore, Malaysia, Indonesia, Thailand).