The AI-DrivenEnterprise

Traci Gusher

How Artificial Intelligencebecomes mainstream inthe enterprise

1950’s 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s

Artificial IntelligenceMachine Learning

Deep Learning

Early artificial intelligence stirs excitement

Machine learning begins to flourish

Deep learning breakthroughs drive AI boom

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When AI is narrow, the applicationis limited

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4

InternetOnline to offline

PerceptionO2O to OMO

AutonomousAutomated to autonomous

BusinessAI-driven enterprise

The four waves of AI

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5

InternetOnline to offline

PerceptionO2O to OMO

AutonomousAutomated to autonomous

BusinessAI-driven enterprise

The four waves of AI

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

6

InternetOnline to offline

PerceptionO2O to OMO

AutonomousAutomated to autonomous

BusinessAI-driven enterprise

The four waves of AI

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

7

InternetOnline to offline

PerceptionO2O to OMO

AutonomousAutomated to autonomous

BusinessAI-driven enterprise

The four waves of AI

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

8

InternetOnline to offline

PerceptionO2O to OMO

AutonomousAutomated to autonomous

BusinessAI-driven enterprise

The four waves of AI

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

9

The enterprise is heading towards the “A Trifecta”

Automation

Artificial IntelligenceAnalytics

Robotics &Process automation

Natural language generation/dialog

Deeplearning

Image recognition

Voice recognitionPredictive

Descriptive& BI

Machine learning

Natural language processing

Source: Image inspired by The HfS Triple A Trifecta: Automation, Analytics, and Artificial Intelligence, by Phil Fersht, Jamie Snowdon, Tom Reuner, Saurabh Gupta (August 31, 2017)

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ITautomationThe current state

of Enterprise AI revolves around more tactical use cases

Qualitycontrol /detecting

defects Cybersecurity

Predictive analytics

Customer service (including virtual

assistants)

Risk Management

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

Industrial products and services

Financial servicesand insurance

Consumer products

Government/public sector (including education

Professional services

Technology / mediaand entertainment / telecommunications

Life sciences and health care

Median Higher investmentLower investment

Low AI investment / low returns High AI investment / low returns

Low AI investment / high returns High AI investment / high returns

22%

20%

18%

16%

14%

12%

10%

Ret

urn

on in

vest

men

t

Note: The dotted lines in the graph represent the median ROI and median AI investment for all respondents, cross-industry

Source: Deloitte State of AI in the Enterprise,2nd Edition, 2018.

The level ofinvestment andROI in AI is dominated by the supply side

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

Today

There is a

10x factor in investment between leaders and laggards.

In 3 years

There will be a

50x factor

The supplyside of AI will outspend the market

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

13

94%

of companies believeAI is key to competitive advantage- IDC

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of CIOS report they are using machine learning in their organization89%

Source: KPMG client survey across 170 technology risk professionals

are in the research and planning phase of deployment40%

are using machine learning across the business03%

AI is vastly adopted but confined todepartmental use

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

AI-enabled transformation is elusivebut remains the end goal

Experimented / prototyped

15%

Repeatable value

62%

Integrated w/operations

20%

Transformed

3%

Value

Time

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16

Customer obsession

Epic experiences

AI needs to deliver epic experiences

Workforce empowered

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

17

AI needs to be trusted

Credit to:Joy Buolamwini, MIT graduate student, YouTube video “How I’m fighting bias in algorithms”

Explainable

Attainable Ethical

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18

AI needs to be trusted

Credit to:Joy Buolamwini, MIT graduate student, YouTube video “How I’m fighting bias in algorithms”

Explainable

Attainable Ethical

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

The entire workforce needs to transform

New jobs and skills

AI ownership & operating model

Data and AI culture

Human in the loop

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

Data needs to support humans and AI

Data citizen

Machine learning

Critical dataset

Master data

Data integration

Data quality

Feature selection

Data labeling

Training data

Testing data

Data Supply Chain

Data supply

Data demand

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

Data needs to support humans and AI

Data citizen

Machine learning

Critical dataset

Master data

Data integration

Data quality

Feature selection

Data labeling

Training data

Testing data

Data Supply Chain

Data supply

Data demand

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

The AI revolution is not just about technology, it’s really about a monumental transformation of human beings. It’s about change and, therefore, change management.

The true leaders will be the ones who succeed in doing business in wholly different ways, with humans and machines complementing each other.

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667

tgusher@kpmg.com

Traci GusherPrincipal, KPMG Lighthouse

@tgusher13

https://www.linkedin.com/in/traci-gusher-5855898/

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 856667