NEW YORK: Cost savings from automation are broadly falling short of projections, according to a new Bain & Co global survey of large companies.
The missed targets “should be making executives uncomfortable”, especially since many of them are approving increased spending for artificial intelligence (AI) on the basis of expected savings, the consulting firm said in a report shared exclusively with Bloomberg News.
“Self-funding the next wave from past returns sounds like discipline. In reality, it is a circular bet with a structural leak,” the report said.
The survey, completed in April, was based on responses from executives at 951 companies with more than US$100mil in revenue, across nine sectors: retail, technology, advanced manufacturing, healthcare, consumer products, energy, financial services, telecom/media/entertainment and insurance.
Among companies measuring their AI cost savings, the largest share (40%) realised reductions of 10% or less. Most had been expecting to see more meaningful improvement.
“The prior wave underdelivered. The savings pool is smaller than assumed,” Bain warned. — Bloomberg
