Nearly 54% Indian firms have implemented AI for business functions: PwC India

An increased number of Indian businesses are adopting artificial intelligence (AI) and analytics to improve business operations. According to a new report published on Tuesday by global consultancy firm PwC, Indian companies are showing an upward trend towards adopting analytics and AI with a current implementation rate of 54%. 

According to the PwC report, Indian enterprises across sectors are increasingly looking at AI for business resiliency, transparency and sustainability that can prepare them for future growth. Many believe that greater innovation and faster time to market will help them remain competitive with the help of AI adoption.

“Organisations are focusing on improving the efficiency of processes, such as reducing the downtime of assets, minimising the maintenance cost of expensive equipment, and cutting down the cost of poor quality to meet the global parameters," said Sudipta Ghosh, Partner, Industrial Products Sector and Data and Analytics Practice Leader, PwC India.

Ghosh added that these companies are "using digital twins, automation of processes like connected workstations using IoT for better visibility at the shop floor and workflow-based automated solution for efficient scheduling."

The adoption however does come with its share of challenges. The study said, besides the cost of investment in digital technology, lack of planning for aligning digital transformation with the organisation’s objectives and implementing these digital technologies is a bigger problem.

“Analytics continues to play a significant role in improving the decision-making process, both at the shop floor as well as across the entire supply chain," said Ghosh, adding that the "return on investments will be governed to a large extent by how organisations are using the data to generate insights and take timely decisions".

The study showed that Indian manufacturing companies are showing an increased interest in AI adoption, followed by, Banking, financial services and insurance (BFSI), healthcare,  consumer packaged goods and retail, healthcare, and automotive sectors, among others.

According to a report published in June last year, by IT body Nasscom jointly with consultancy firm EY, the adoption of AI by Indian enterprises can add $500 billion to India's GDP by 2025. It said that even though the current rate of AI investments in India is growing at a compound annual growth rate (CAGR) of 30.8% and poised to reach $881 million by 2023, it will still represent just 2.5% of the total global AI investments of $340 billion. 

These numbers suggest that India’s AI adoption still has a long way to go and also creates a massive opportunity for Indian enterprises to accelerate investments and adoption of AI to drive equitable growth across sectors. For India to achieve its $1 trillion GDP goal by FY 2026-2027, it needs to have a strong correlation to the maturity of AI adoption, the report noted.

As Ankur Basu, Partner and Digital Operations Leader, PwC India, also noted in the recent report, while there is no single model for success, companies should frame a transformation blueprint, learn from success stories within their industry and also take into consideration the probable pitfalls from failed cases, before committing to a digital transformation path.

Another report published in November 2022 by consultancy firm Deloitte noted that the demand for AI talent will continue to outpace supply and hence businesses will have to work closely with academia to rapidly expand the pool, the report said.