Three principles leaders need to consider when making AI investments
May 16 2024 - 10:05AM
A new research briefing released today by the MIT Center for
Information Systems Research (CISR) establishes three principles
supported by data monetization research to guide business leaders
when making artificial intelligence (AI) investments. Titled “AI Is
Everybody’s Business,” the research briefing explores managing AI
using a data monetization mindset, and was written by Barbara H.
Wixom and Cynthia M. Beath, authors of the award-winning book, Data
Is Everybody’s Business: The Fundamentals of Data Monetization.
Wixom is a principal research scientist at MIT CISR, and Beath is
Professor Emerita, University of Texas and an academic research
fellow with MIT CISR.“In our data monetization research, we have
regularly seen leaders use AI effectively to realize extraordinary
business goals,” said Wixom. “AI technology’s role is to help data
monetization project teams use data in ways that humans cannot,
usually because of big complexity or scope or required
speed.”
Principle 1: Invest in Practices That Build
Capabilities Required for AIMIT CISR research shows that
an organization’s progress in AI is dependent on having equally
advanced capabilities in data science, data management, data
platform, acceptable data use, and customer understanding. The
authors stress that while it is important to invest in AI training,
it’s equally important to invest in practices that will boost the
organization’s ability to manage data (such as adopting a data
cataloging tool), make data accessible cost effectively (such as
adopting cloud policies), improve data governance (such as
establishing an ethical oversight committee), and solidify customer
understanding (such as mapping customer journeys). In particular,
adopting policies and processes that will improve an organization’s
data governance allows data to be used only in AI initiatives in
ways that are consonant with its values and regulatory
environment.“We worry that some leaders view buying AI products
from providers as an opportunity to use AI without deep science
skills; we do not advise this,” Beath cautioned.
Principle
2: Involve the Entire Organization in Your AI JourneyWith
AI, involving a variety of stakeholders in initiatives helps
non-data scientists become knowledgeable about what AI can and
cannot do, how long it takes to deliver certain kinds of
functionality, and what AI solutions cost. This, in turn, helps
organizations learn how to build models people trust.Given the
consumerization of generative AI tools, MIT CISR research shows
that pervasive worker involvement in ideating, building, refining,
using, and testing AI models and tools will become even more
crucial to deploying fruitful AI projects — and building trust that
AI will do the right thing in the right way at the right
time.
Principle 3: Focus on Realizing Value from AI
ProjectsAI is costly and needs to pay off, yet some
organizations become distracted with endless experimentation.
Leaders with data monetization experience make sure their AI
projects realize value in the form of increased revenues or reduced
expenses by backing initiatives that are clearly aligned with real
world challenges and opportunities. MIT CISR’s research shows that
leaders who realize value from their data monetization initiatives
measure and track their outcomes, especially their financial
outcomes, and they hold someone accountable for achieving the
desired financial returns. “When people actively engage in data
monetization initiatives using AI they learn and, in turn,
help their organization learn,” said Wixom. “Their engagement
creates momentum that initiates a virtuous cycle in which people’s
engagement leads to better data and more bottom-line value, which
leads to new ideas and more engagement, which further improves data
and delivers more value, and so on.” “Imagine this happening across
your organization as all people everywhere make it their business
to find ways to use AI to monetize data. This is why AI, like data,
is everybody’s business,” Beath concluded.
- AI is Everybody's Business
Casey Bayer
MIT Sloan School of Management
914.584.9095
bayerc@mit.edu
Patricia Favreau
MIT Sloan School of Management
617.895.6025
pfavreau@mit.edu