What are the biggest barriers to AI adoption and digital transformation?

Change is inevitable. Every business and economy has to evolve in this dynamic environment. So, is AI transformation easy? Are there no barriers and drawbacks to it?

Every business is looking for process innovation and maximum efficiency. And what better way to do so than adopting artificial intelligence? Research by Forbes shows that AI adoption across the world is increasing rapidly, with over 47% of businesses already implementing AI processes, when compared to a mere 20% in 2019.

However, AI is a huge capital expenditure and leads to businesses being tied up in debts and cash flow problems. Surveys have indicated businesses spend from $6000 to $300000 per year on AI, but is it really worth the price they are paying? Is it worth taking huge bank loans and going into losses? Small businesses may not even have access to such sources of finance, so how do they stay ahead of their competition? Not only this but AI installation will even lead to thousands of job losses and redundancies. The business will further have to bear redundancy expenses, may suffer backlash from pressure groups, government which may lead to bad publicity. Consumers prefer brands who are taking up social responsibilities along with their business activities, rather than companies just focusing on profit maximization. What is more important - brand reputation or profits? Is AI worth the hassle?

Installation of AI doesn’t stop at purchase of the technology and equipment, but investment in training and attracting data and technology professionals is also equally important. If employees are not aware of how to utilize this technology efficiently, there’s no point in such large investments, it is a waste.

Even though AI is a highly demanded skill, especially in recent years, the supply of these data professionals is very limited. Large companies like Google and Facebook offer them high salaries and great benefits to attract them, which is not possible by every small firm. This is making it even difficult for emerging firms to invest and adapt to new AI and digital transformation techniques.

AI may help improve productivity and efficiency across all sectors, but their still exist quite a few barriers, especially for small and emerging businesses. Not all businesses may benefit from AI, especially if their output is very limited.

-Gaurika & Ria