IDC sees rise in AI adoption among ASEAN countries

POSTED BY: Lionell Go Macahilig
2018-07-30 12:07:00 PHT

A recent survey conducted by leading IT market research and advisory firm IDC titled IDC Asia/Pacific Enterprise Cognitive/AI highlights that AI adoption in the region is on the rise. Current AI adoption rates stand at 14% across Southeast Asia as compared to just eight percent last year, marking a clear move by companies to embed some form of AI/cognitive intelligence into their operations.

Discovery of better business insights has become the most important adoption driver according to more than half (52%) of respondents, moving from third most important in 2017, revealing a maturity in the way the region is harnessing AI to enhance their business. Other top drivers this year are enhanced process automation (51%) and improved productivity (42%).

With 24.6% of organizations in Indonesia adopting AI, the country leads the pack in terms of adoption. It is important to note that bimodal distribution is observed in Indonesia. While the country has the highest adoption rates amongst ASEAN countries surveyed, it also has the highest percentage of organizations with no plan to adopt AI within the next five years (59%). The top use cases in Southeast Asia include algorithmic market forecasting (17%), and automated asset and infrastructure management (11%).  

“With its positive impact already visible across banking, manufacturing, healthcare, and government, there are clear opportunities for more organizations in Southeast Asia to leverage AI to create differentiating value. We expect investments in AI to continue to rise, as more organizations begin to understand the benefits of embedding AI into their business and how data and analytics can help uncover new insights. Organizations that do not incorporate AI in their business operations will lose out to their AI-enabled peers who will benefit from the greater predictability, efficiency, and innovation that advanced analytics can bring,” said Chwee Kan Chua, Global Research Director, Big Data and Analytics and Cognitive/AI, IDC Asia/Pacific.

Strategy still in flux, with high costs and lack of skilled talent top barriers to adoption

Despite the rise in adoption, organizations in the region are trailing behind those in North Asian countries, in terms of making AI a strategic agenda. For example, more than 80% of companies in China and South Korea believe AI capabilities will be critical for organizations’ success and competitiveness in the coming years, while less than 40% of companies in Singapore and Malaysia agree with the same.  

Lack of Skills & Knowledge (23%) and High Cost of Solutioning (23%) are among the most frequent barriers to adoption named by survey respondents.

While the overall adoption in Southeast Asia falls behind Asia/Pacific (excluding Japan), there are signs to suggest organizations in the region will catch up quickly. For example, thirty-five percent of organizations in Singapore have plans to adopt AI within two years, the highest among Asia/Pacific countries.

In solidifying their strategy to turn AI into a differentiator for the business, companies find data from Sales, Commerce and Marketing to be the most ready, followed by that from Customer Service & Support operations, and IT, Security & Risk operations.

For those already embarking on their data-to-insights journey, there are varied challenges across sectors. Organizations in the financial services space face more challenges in data federation and model building, while public sector organizations are hindered by data readiness issues.

“Across the globe, we are already seeing the powerful transformative effect of AI on industries and cities. Automated AI systems, based on analytics, are making it easier for organizations to incorporate AI in their business. Today AI can help solve complex problems and uncover insights that were previously unknown, at a much faster speed and greater scale than was possible,” said Ryan Guadalquiver, Country Manager, SAS Philippines. “Turning AI into a strategic differentiator need not be a daunting task. Organizations can seek the right partner to help build the right tools, processes and technologies to operationalize analytics to achieve the desired business outcomes.”

The IDC Asia/Pacific Enterprise Cognitive/AI survey is an annual study undertaken to understand adoption trends, challenges and key barriers, and business priorities in the space. In 2018, a total of 502 executives and IT line-of-business heads across Asia Pacific (excluding Japan), were surveyed including 146 respondents from Southeast Asia (Singapore, Malaysia, Indonesia, Thailand).