AI remains a top priority for business leaders worldwide this year, with a strong focus on reaping tangible results from their AI initiatives, consulting company Boston Consulting Group's (BCG's) ‘AI Radar’ global survey found.

The 'From Potential to Profit: Closing the AI Impact Gap' report findings reveal both optimism and significant challenges in realising AI’s full potential. One in three companies globally is planning to allocate over $25-million to AI, the survey of 1 803 C-level executives across 19 markets and 12 industries showed.

“In my discussions with CEOs, it’s clear they are prioritising AI to drive productivity,” said BCG CEO Christoph Schweizer.

“Our latest survey uncovers a crucial challenge that, while 75% of executives rank AI as a top three strategic priority, only a quarter report meaningful value from their AI initiatives. Many companies have an immense opportunity to close the gap between their ambitions and reality.”

Effective AI adopters have cracked the code on how to achieve meaningful impact by focusing on a targeted set of AI initiatives, scaling them rapidly, transforming core processes, upskilling their teams and systematically measuring operational and financial returns, he noted.

There is a contrast between 68% of executives anticipating maintaining their current workforce size, focusing on enhancing productivity and upskilling existing talent to meet AI demands, and the fact that fewer than one-third of companies have upskilled one-quarter of their workforce.

This level of upskilling is an improvement from last year, but still far from the level needed to help employees feel secure in adapting to a technology often perceived as a threat to jobs, BCG noted.

“Companies that are leading in deriving meaningful value from their AI initiatives allocate more than 80% of their AI investments to reshaping core functions and inventing new offerings, while other companies focus 56% of their AI investments on smaller-scale, productivity-focused initiatives.

“Leaders also set clear goals and track top- and bottom-line impact. However, 60% of companies surveyed are failing to define and monitor any financial key performance indicators (KPIs) related to AI value creation,” the report said.

In Africa, 35% of companies are not defining and monitoring any financial KPIs related to AI value creation, and 62% of these companies lack maturity in effective AI organisational change management, the consulting firm pointed out.

Additionally, 68% of companies in Africa have indicated challenges hiring AI talent and upskilling their existing workforce.

“Companies leading in AI focus on depth over breadth, prioritising an average of 3.5 use cases, compared with 6.1 use cases for other companies. These companies anticipate generating 2.1-times greater return on investment on their AI initiatives than their peers,” the report highlighted.

Meanwhile, only 7% of executives anticipate AI automation will lead to an overall decrease in headcount.

In Africa, the report shows that only 6% of executives expect AI to lead to job losses. Interestingly, 37% of these executives say they see significant value from AI, BCG said.

This is supported by the finding that 86% of African companies are planning to increase technology investments this year, push for a more disruptive use of AI and prioritise investments in higher-impact areas.

Meanwhile, 17% of executives globally expect AI to reshape the workforce by introducing new roles to replace redundant ones. Eight percent foresee AI driving an increase in headcount, while only 7% predict a reduction in workforce size due to AI automation.

“Successful leaders adopt the 10-20-70 framework to unlock AI’s business potential, allocating 70% of their efforts to transforming people, processes and culture; 20% to data and technology; and just 10% to algorithms,” said enterprise solutions company BCG X global leader Sylvain Duranton.

“However, two-thirds of companies face significant challenges in reimagining workflows, driving cultural change, recruiting talent, and upskilling their workforce. Ensuring the success of AI initiatives requires disciplined execution, a relentless focus on value creation, and a workforce ready to adapt and thrive in a rapidly evolving environment,” he said.

Meanwhile, in terms of the top three AI risks, executives identified data privacy and security as the top risk at 66%, lack of control or understanding of AI decisions at 48% and regulatory challenges and compliance at 44%.

Cybersecurity is a critical concern, with 76% of executives acknowledging that their AI cybersecurity measurements require further improvements, the report noted.

At least 64% of African executives surveyed have raised data privacy and security risks, 37% have highlighted the lack of control or understanding of AI decisions, and 46% are concerned with regulatory and compliance challenges, it added.

Interestingly, the report reveals that 60% of African companies surveyed are starting to build their geopolitical muscle, citing regulations as a factor in their AI adoption pace.

This is the highest across the globe, followed by North America at 58%, Europe at 56%, the Middle East at 54%, Asia-Pacific at 52% and South America at 45%, BCG highlighted in the report.

However, companies across the region are not doing enough on the environmental impact of AI, with 73% of companies surveyed on the continent not prioritising energy efficient AI solutions as part of their vendor selection.

This is below the global average of 78%, South America at 86%, North America at 83%, the Middle East at 80%, Europe at 77% and Asia-Pacific at 75%.

“The report is a good indicator of what needs to be done as a matter of priority and where AI should be headed across the region’s many economies and sectors.

“It shows that 72% of African companies rank AI and/or generative AI as a top three strategic priority, against a 75% global average and that 83% of African companies recognise that their AI cybersecurity measures need further improvements,” BCG said.