BY Fraser Tennant
Artificial intelligence (AI) is driving significant productivity across UK businesses, but further action is needed to translate gains into measurable business value, according to a new EY report.
In its ‘EY-Parthenon CEO Outlook Survey’ – a survey of 100 UK chief executives – EY found that half ranked AI-enabled tools and applications among their organisation’s top three drivers of productivity gains over the past 12 months, ahead of business process redesign and simplification and workforce reskilling.
According to the survey report, more than half of chief executives said their organisation is piloting AI in selected transaction-evaluation activities, while 28 percent stated that they are using it across multiple activities. A further 9 percent reported embedding AI across most transaction-evaluation activities, making it central to their transaction strategy.
“We are seeing some encouraging signs,” said Silvia Rindone, UK and Ireland managing partner at EY-Parthenon. “AI is emerging as a leading contributor to productivity gains and businesses reinvesting those efficiencies to support future growth and transformation.”
The report also found, however, that realising value from AI extends beyond measuring returns. More than a third of UK chief executives identified legacy technology and operating models as the biggest obstacle to converting productivity gains into measurable business value, followed by organisational complexity, regulation or increased risk management.
Moreover, only 14 percent said they have comprehensive, real-time visibility of AI costs and almost a third reported significant gaps in their ability to assess return on investment. Despite these challenges, chief executives are taking steps to convert productivity gains into tangible business value, with more than two-fifths reinvesting those gains to drive growth, innovation or transformation.
“However, productivity alone will not determine returns,” added Ms Rindone. “UK Businesses need the right operating models, processes and skills to turn productivity improvements into sustainable value.”
In this respect, the survey underlines the growing importance of workforce capabilities as AI adoption accelerates. Nearly three-quarters of UK chief executives expect skills shortages to become a greater barrier to growth than access to capital within the next three years.
“The AI conversation has shifted from adoption to impact, and UK chief executives now want clear evidence that their investment is delivering stronger productivity and measurable business value,” noted Ms Rindone. “Capital, technology and talent must be aligned to convert AI gains into sustainable growth and competitive advantage.”
Report: AI drives UK productivity gains, but barriers to growth remain