One of the AI industry’s top experts and most vocal supporters had a few things to say on LinkedIn about yesterday’s post.
The following exchange not only uncovers issues that need to be discussed openly, but it also makes for pretty good reading.
Executive Fellow @HBS and CEO of GAI Insights | We help innovative AI leaders and vendors drive value with GenAI
Jon W. Hansen “failed” need to be clearly defined (Gartner may have done this). If “success” means 100% hard dollar savings, I believe 80% would be correct.
From our experience at a high level, in 2024 companies budgeted for a recession. Then this “school cheat tool” show up. Then 91% of stock gains in 1H were due to 6-7 AI stocks. Now every company needed a PoC and presentation for the board. We estimate that 90% of these were one via Azure and OpenAI.
95% of these projects are not in production.
BUT, the Board, management and the organization learned and satisfied an investor request. Learning and investor request satisfaction were achieved, I suspect, in 80% of the PoC
There are so few GenAI projects actually in production, so I would be skeptical if the claim is that 80% of projects in production failed – John Sviokla Tim Andrews Adam Rappaport
Strategic Advisor/Analyst Specializing in Emerging AI Tech, Sales and Marketing (Procurement) Thinkers360 Top 50 Global Thought Leaders & Influencers on Procurement! (April 2021)
Paul Baier, That is why I tagged you.
However, keep this in mind – and there is extensive research and case studies to back it up – 80% of all ERP and digital transformation initiatives over the past few decades failed to deliver the expected results.
Here is a paper I wrote in 2008 – https://bit.ly/4aIT4j2
These failures are not due to the technology in each of these generations. They are due to people using an ineffective equation-based implementation model instead of an agent-based model –
https://bit.ly/3FBnFRr
Executive Fellow @HBS and CEO of GAI Insights | We help innovative AI leaders and vendors drive value with GenAI
GenAI,its early market that just started. If 85% GenAI projects failed in the last 18 months, why are most companies increasing budgets in 2024 and 2025?
At a simple level, GenAI is just another tool, albeit a very powerful, the digitization of companies. None of the basics of 101 IT projects (business case, it’s all about the people and rarely the technology, etc, changes). If firms can’t manage IT projects well before GenAI, the can’t manage a GenAI project
If a CEO told me that he is canceling 100% of his GenAI projects in 2024 because he read in Gartner that 85% of projects failed, I would tell him that he is a fool
Strategic Advisor/Analyst Specializing in Emerging AI Tech, Sales and Marketing (Procurement) Thinkers360 Top 50 Global Thought Leaders & Influencers on Procurement! (April 2021)
Paul Baier, the statement that stood out to me the most from your comment is, “If firms can’t manage IT projects well before GenAI, they can’t manage a GenAI project.”
We used to say things like great technology won’t fix bad processes, and then we used the more simplified version of garbage in, garbage out.
The challenges and solutions were identified and resolved in the DND case outline above before the technology was introduced. The platform I developed in the late 1990s and early 2000s utilized self-learning algorithms within a nascent AI framework.
The point is that you are right—the technology across all solution providers is sound. What’s missing is the laying of the groundwork to make an organization truly digitally ready.
Unfortunately, too many practitioners fear being left behind and seek silver-bullet solutions. Conversely, most solution providers – feeling the pressure of meeting financial forecasts, take on clients who they know are nowhere near ready for the introduction of technology. In short, the providers know they should walk away from a sale but won’t because they need the revenue.
The Takeaway
I will continue to update our conversation on the blog. If you would like to share your thoughts, feel free to do so in the comment section or join the discussion on LinkedIn.
In the meantime, here is the takeaway question for you: Are VCs and other investment vehicles investing too much in a provider’s technology and not enough in the people behind the technology?
30
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AI Dime A Dozen Post Reader Reactions!
Posted on July 8, 2024
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One of the AI industry’s top experts and most vocal supporters had a few things to say on LinkedIn about yesterday’s post.
The following exchange not only uncovers issues that need to be discussed openly, but it also makes for pretty good reading.
Paul Baier
Executive Fellow @HBS and CEO of GAI Insights | We help innovative AI leaders and vendors drive value with GenAI
Jon W. Hansen “failed” need to be clearly defined (Gartner may have done this). If “success” means 100% hard dollar savings, I believe 80% would be correct.
From our experience at a high level, in 2024 companies budgeted for a recession. Then this “school cheat tool” show up. Then 91% of stock gains in 1H were due to 6-7 AI stocks. Now every company needed a PoC and presentation for the board. We estimate that 90% of these were one via Azure and OpenAI.
95% of these projects are not in production.
BUT, the Board, management and the organization learned and satisfied an investor request. Learning and investor request satisfaction were achieved, I suspect, in 80% of the PoC
There are so few GenAI projects actually in production, so I would be skeptical if the claim is that 80% of projects in production failed – John Sviokla Tim Andrews Adam Rappaport
Jon W. Hansen
Strategic Advisor/Analyst Specializing in Emerging AI Tech, Sales and Marketing (Procurement) Thinkers360 Top 50 Global Thought Leaders & Influencers on Procurement! (April 2021)
Paul Baier, That is why I tagged you.
However, keep this in mind – and there is extensive research and case studies to back it up – 80% of all ERP and digital transformation initiatives over the past few decades failed to deliver the expected results.
Here is a paper I wrote in 2008 – https://bit.ly/4aIT4j2
These failures are not due to the technology in each of these generations. They are due to people using an ineffective equation-based implementation model instead of an agent-based model –
https://bit.ly/3FBnFRr
Paul Baier
Executive Fellow @HBS and CEO of GAI Insights | We help innovative AI leaders and vendors drive value with GenAI
GenAI,its early market that just started. If 85% GenAI projects failed in the last 18 months, why are most companies increasing budgets in 2024 and 2025?
At a simple level, GenAI is just another tool, albeit a very powerful, the digitization of companies. None of the basics of 101 IT projects (business case, it’s all about the people and rarely the technology, etc, changes). If firms can’t manage IT projects well before GenAI, the can’t manage a GenAI project
If a CEO told me that he is canceling 100% of his GenAI projects in 2024 because he read in Gartner that 85% of projects failed, I would tell him that he is a fool
Jon W. Hansen
Strategic Advisor/Analyst Specializing in Emerging AI Tech, Sales and Marketing (Procurement) Thinkers360 Top 50 Global Thought Leaders & Influencers on Procurement! (April 2021)
Paul Baier, the statement that stood out to me the most from your comment is, “If firms can’t manage IT projects well before GenAI, they can’t manage a GenAI project.”
We used to say things like great technology won’t fix bad processes, and then we used the more simplified version of garbage in, garbage out.
The challenges and solutions were identified and resolved in the DND case outline above before the technology was introduced. The platform I developed in the late 1990s and early 2000s utilized self-learning algorithms within a nascent AI framework.
The point is that you are right—the technology across all solution providers is sound. What’s missing is the laying of the groundwork to make an organization truly digitally ready.
Unfortunately, too many practitioners fear being left behind and seek silver-bullet solutions. Conversely, most solution providers – feeling the pressure of meeting financial forecasts, take on clients who they know are nowhere near ready for the introduction of technology. In short, the providers know they should walk away from a sale but won’t because they need the revenue.
The Takeaway
I will continue to update our conversation on the blog. If you would like to share your thoughts, feel free to do so in the comment section or join the discussion on LinkedIn.
In the meantime, here is the takeaway question for you: Are VCs and other investment vehicles investing too much in a provider’s technology and not enough in the people behind the technology?
30
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