Deloitte
  • Services

    What's New

    • Ignored to J’ Adored

      How Deloitte helped a large fast food company become a leader in sustainability

    • Deloitte Private

      Connecting you to what matters

    • Compromised to Immune

      An Initial Public Offering can take years. We only had weeks

    • Audit & Assurance

      • IASPlus
      • Assurance Services
      • Accounting & Reporting Advisory
      • Accounting Operations Advisory
      • Disruptive Events Advisory
      • Media & Advertising Assurance
      • Global Public Policy
    • Consulting

      • Strategy, Analytics and M&A
      • Customer and Marketing
      • Core Business Operations
      • Human Capital
      • Enterprise Technology & Performance
    • Risk Advisory

      • Accounting and Internal Controls
      • Cyber and Strategic Risk
      • Regulatory and Legal
      • Sustainability & Climate
    • Financial Advisory

      • Mergers & Acquisitions
      • Turnaround & Restructuring
      • Deloitte Forensic
    • Legal

      • Legal Management Consulting
      • Legal Advisory Services
      • Legal Managed Services
      • Dbriefs Legal
      • Deloitte Legal Around the World
      • The Resilient General Counsel
    • Tax

      • Advisory and Transactions
      • Workforce, Technology, Analytics
      • Outsourced Compliance
      • Technology Consulting
      • Mobility, Payroll, Immigration
      • Reward, Employment Tax, Share Plans
  • Industries

    What's New

    • Connecting for a resilient world

    • Future of Mobility

      Learn how this new reality is coming together and what it will mean for you and your industry.

    • Platforms and Ecosystems

      Enabling the Digital Economy

    • Consumer

      • Automotive
      • Consumer Products
      • Retail, Wholesale & Distribution
      • Transportation, Hospitality & Services
    • Energy, Resources & Industrials

      • Industrial Products & Construction
      • Mining & Metals
      • Oil, Gas & Chemicals
      • Power, Utilities & Renewables
      • The Future of Energy
    • Financial Services

      • Banking & Capital Markets
      • Insurance
      • Investment Management
      • Real Estate
    • Government & Public Services

      • Central Government
      • Defense, Security & Justice
      • Health & Human Services
      • Infrastructure, Transport & Regional Government
    • Life Sciences & Health Care

      • Health Care
      • Life Sciences
    • Technology, Media & Telecommunications

      • Technology
      • Telecommunications, Media & Entertainment
  • Insights

    Deloitte Insights

    What's New

    • Deloitte Insights Magazine

      Explore the latest issue now

    • Deloitte Insights app

      Go straight to smart with daily updates on your mobile device

    • Weekly economic update

      See what's happening this week and the impact on your business

    • Strategy

      • Business Strategy & Growth
      • Digital Transformation
      • Governance & Board
      • Innovation
      • Marketing & Sales
      • Private Enterprise
    • Economy & Society

      • Economy
      • Environmental, Social, & Governance
      • Health Equity
      • Trust
      • Mobility
    • Organization

      • Operations
      • Finance & Tax
      • Risk & Regulation
      • Supply Chain
      • Smart Manufacturing
    • People

      • Leadership
      • Talent & Work
      • Diversity, Equity, & Inclusion
    • Technology

      • Data & Analytics
      • Emerging Technologies
      • Technology Management
    • Industries

      • Consumer
      • Energy, Resources, & Industrials
      • Financial Services
      • Government & Public Services
      • Life Sciences & Health Care
      • Technology, Media, & Telecommunications
    • Spotlight

      • Deloitte Insights Magazine
      • Press Room Podcasts
      • Weekly Economic Update
      • COVID-19
      • Resilience
  • Careers

    What's New

    • WorldImpact

      Living our purpose, reshaping our world, making an impact that matters.

    • 2022 Gen Z and Millennial Survey

      Striving for balance, advocating for change

    • Alumni profiles

      Inspiring leaders

    • Job search

    • Experienced hires

    • Students

    • Life at Deloitte

    • Inclusion at Deloitte

    • Alumni

  • GLOBAL-EN Location: GLOBAL-English  
  • Contact us
  • GLOBAL-EN Location: GLOBAL-English  
  • Contact us

Welcome back

Still not a member? Join My Deloitte

Dispelling five myths about cognitive technology

by Tom Davenport, David Schatsky
  • Save for later
  • Download
  • Share
    • Share on Facebook
    • Share on Twitter
    • Share on Linkedin
    • Share by email
Deloitte Insights
  • Strategy
    Strategy
    Strategy
    • Business Strategy & Growth
    • Digital Transformation
    • Governance & Board
    • Innovation
    • Marketing & Sales
    • Private Enterprise
  • Economy & Society
    Economy & Society
    Economy & Society
    • Economy
    • Environmental, Social, & Governance
    • Health Equity
    • Trust
    • Mobility
  • Organization
    Organization
    Organization
    • Operations
    • Finance & Tax
    • Risk & Regulation
    • Supply Chain
    • Smart Manufacturing
  • People
    People
    People
    • Leadership
    • Talent & Work
    • Diversity, Equity, & Inclusion
  • Technology
    Technology
    Technology
    • Data & Analytics
    • Emerging Technologies
    • Technology Management
  • Industries
    Industries
    Industries
    • Consumer
    • Energy, Resources, & Industrials
    • Financial Services
    • Government & Public Services
    • Life Sciences & Health Care
    • Tech, Media, & Telecom
  • Spotlight
    Spotlight
    Spotlight
    • Deloitte Insights Magazine
    • Press Room Podcasts
    • Weekly Economic Update
    • COVID-19
    • Resilience
    • GLOBAL-EN Location: GLOBAL-English  
    • Contact us
    18 December 2017

    Dispelling five myths about cognitive technology

    18 December 2017
    • Tom Davenport United States
    • David Schatsky United States
    • Save for later
    • Download
    • Share
      • Share on Facebook
      • Share on Twitter
      • Share on Linkedin
      • Share by email
    • Myth No. 1
    • Myth No. 2
    • Myth No. 3
    • Myth No. 4
    • Myth No. 5
    • Conclusion

    A survey of “cognitive-aware” executives of large firms helps correct some misconceptions about the adoption of cognitive technologies and its implications.

    One of the most frequently discussed topics in business today is artificial intelligence (AI). Its impacts and implications are mentioned in many press accounts. Some of this information is accurate, of course, but it also includes many myths. It’s still early days for this technology, and there are not many sources of data. We have been researching Deloitte’s work in AI as well as that of market leaders and it’s important to dispel myths whenever possible.

    In the 2017 State of Cognitive Survey, Deloitte surveyed 250 “cognitive-aware” US executives from large companies. These managers were knowledgeable about AI/cognitive technologies and informed about what their companies were doing with the technology. Their responses about their companies are subjective, but they shed considerable light on the current state of cognitive technology within organizations. Five myths that the respondents dispel are discussed below.

    Myth No. 1

    The main use of cognitive technologies is automating work that people do. It is rare to find a story in the media about AI that doesn’t speculate about the how the technology is destined to put lots of people out of work. (See Myth No. 2.) This is because it is widely assumed that AI is all about automating the work that people do. But this is hardly the full story. As our prior research has shown, and the survey has validated, there are significant uses for AI that do not involve substituting machine labor for human labor.

    Our analysis of hundreds of AI applications in every industry has revealed that these applications tend to fall into three categories: product, process, and insight.1 And these applications don’t necessarily involve automating work that people do. Product applications, for instance, embed cognitive technologies into products or services to help provide a better experience for the end user, whether by enabling “intelligent” behavior, a more natural interface (such as natural language text or voice), or by automating some of the steps a user normally performs. Process applications use cognitive technology to enhance, scale, or automate business processes. This might entail automating work that people were doing; but it also might involve doing new work that wasn’t practical to do without AI. And insight applications use AI technology such as machine learning and computer vision to analyze data in order to reveal patterns, make predictions, and guide more effective actions. Again, in some cases this can be used to automate human work. But it is also used to do work that no human could have done previously because the analysis was impractical without the use of AI.

    Our survey respondents clearly believe that AI is important for more than automation. While 93 percent said its use was important or very important in their internal businesses processes, 88 percent ranked it of similar importance to the products and services they sell. And, as noted below, when ranking the benefits of AI, cutting jobs through automation is at the bottom of the list for our respondents. Enhancing products or creating new ones and making better decisions rank higher. Our research shows that AI is about far more than automating work that people do.

    Myth No. 2

    Cognitive technologies lead to substantial loss of jobs. It’s widely argued that cognitive technologies bring about automation-related job losses. Entire books have been written about this notion. While it’s impossible to know what will happen in the distant future with regard to this issue, both the objectives and the predictions of the survey respondents suggest that job loss won’t be a major implication of cognitive technologies.

    Among the benefits of cognitive technologies that respondents viewed for their companies, the benefit of “reduce headcount through automation” was selected less than any other choice from a list of nine alternatives. Only 7 percent of respondents selected it as their first choice in benefits, and only 22 percent chose it among their top three benefit choices. These results suggest that cognitive-aware managers aren’t even aspiring to automation-driven job loss.

    When asked what they believe about the likelihood of job loss in the future, the respondents were similarly positive about the prospects for human workers. They were queried about job-oriented futures three, five, and ten years from now (see figure 1). Just over half of the respondents expect that augmentation—smart machines and humans working alongside each other—would be the most likely future three years from now. Only 11 percent expected substantial job displacement from cognitive technologies. A larger percentage expected that there would be job gains, or at least no substantial impact on jobs.

    A workforce in flux over the longer term: AI predicted to cause both gains and losses

    Respondents are more likely to be concerned about substantial job loss when it comes to the ten-years-from-now scenario. Twenty-two percent expect it to happen, but 28 percent still expect augmentation to be the most likely outcome, and the same percentage anticipate new jobs.

    In short, while respondents had some concerns about automation-related job loss, they considered it less likely than several other positive outcomes. These cognitive-aware managers understand both their organizations and cognitive technologies; so they are well-equipped to make relatively accurate predictions about job futures.

    Myth No. 3

    The financial benefits of cognitive are far down the road. For all the hype surrounding AI, many people still view it as a futuristic technology. They see a handful of tech giants making headlines with high-profile applications but believe typical companies will not be able to achieve real financial benefits from using the technology in the near term. There is some truth to this view: The tech giants are indeed at the forefront of AI R&D and have capabilities not available to typical companies. On the other hand, there are ordinary companies in every industry that have deployed AI and have already reaped financial benefits from doing so. The survey bears this out.

    Respondents shared the level of investment their companies had made in AI. Considering that we asked them to report cumulative investment to date, the amounts were significant but not astronomical. Just 12 percent had invested $10 million or more. A quarter had invested from $5 million to less than $10 million. Most had committed less than $5 million to date. Indeed, 35 percent had invested less than $1 million.

    A significant majority—83 percent—of respondents said their companies have already achieved either moderate (53 percent) or substantial (30 percent) economic benefits from their AI projects. Only 16 percent of respondents said their company had so far failed to realize an economic benefit. Furthermore, the survey suggests that the economic benefits of AI increase with experience: The more AI deployments respondents reported, the higher the percentage who said they had realized economic benefits. Among executives who said their company had deployed 11 or more AI projects, 92 percent said their projects had yielded economic benefit.

    This is not to suggest that any AI project has a high probability of yielding a positive return on investment. The technology is still relatively immature, and some project failures are to be expected, particularly when applications are novel or the technology untested. It’s worth noting that IT projects generally are not immune to failure. A recent study estimated that 14 percent of projects are deemed failures.2 Still, the data suggests that the benefits of AI are in the here and now—for companies who invest.

    Myth No. 4

    AI is overhyped and is about to disappoint us. This one, we admit is subjective. There is no question that AI is one of the technology topics about which there is the most buzz. And it does sometimes seem that the key to raising venture capital these days is to include the terms “AI” or “machine learning” in your investor pitch. But is AI overhyped? Many of survey respondents—and recall, they work at companies that are deploying the technology—don’t think so. Just 9 percent say they think AI is overhyped; 10 percent, in fact, say that the technology is underhyped. And over a third—37 percent—believe that AI is fundamentally different from IT, suggesting they believe at least a lot of the excitement surround the technology is warranted.

    Myth No. 5

    Cognitive technology is only about transformational change. It’s not uncommon to hear cognitive technology projects equated with “moon shots”—highly ambitious, transformational change initiatives. The same projects are also often referred to as disruptive of companies and industries. A manager might assume that cognitive projects that don’t transform their companies are not worth undertaking.

    A substantial percentage of respondents (47 percent) do agree that “it is important to strive for large-scale, transformational change with cognitive technologies.” But 52 percent believe either that it is better to “pick the low hanging fruit” (40 percent) or wait a few years until the technology matures (12 percent). The fact that a majority of respondents believes that something other than transformational change is a reasonable objective suggests that managers can justifiably consider alternatives to transformation.

    We believe that companies that have successfully achieved transformation from other technologies should consider pursuing it with cognitive technologies as well. However, any transformational project is likely to face high risks and expense. Multiple less ambitious projects—particularly when focused on a specific business process goal—can be more likely to succeed and may in combination yield transformational outcomes.

    Conclusion

    As we’ve noted, the fact that the survey respondents don’t agree with the myths doesn’t necessarily mean that they won’t ever come true. Particularly with regard to future predictions, no one really knows how cognitive technologies will affect our work and lives. But the fact that 250 managers who are knowledgeable and experienced with cognitive technologies do not support (in aggregate, anyway) these myths certainly casts doubt on their veracity. At the very least, the respondent views suggest that all managers should maintain an open mind about the potential and actual impact of these powerful technologies.

    Authors

    Tom Davenport is an independent senior advisor to Deloitte Analytics, Deloitte Consulting LLP. 

    David Schatsky is a managing director at Deloitte LLP, and is based in New York.

    Acknowledgements

    Cover image by: David Owens

    Endnotes
      1. David Schatsky, Craig Muraskin, and Ragu Gurumurthy, “Cognitive technologies: The real opportunities for business,” Deloitte Review, issue 16, Deloitte University Press, January 26, 2015. View in article

      2. Sharon Florentine, “IT projects success rates finally improving,” CIO, February 27, 2017. View in article

    Show moreShow less

    Topics in this article

    Emerging technologies , Artificial intelligence (AI) , Automation , Cognitive technologies

    Deloitte Analytics

    View
    Download Subscribe

    Related

    img Trending

    Interactive 3 days ago

    Tom Davenport

    Tom Davenport

    Tom Davenport is the President’s Distinguished Professor of Information Technology and Management at Babson College, the co-founder of the International Institute for Analytics, a Fellow of the MIT Center for Digital Business. He is an independent senior advisor to Deloitte Analytics, Deloitte Consulting LLP. He collaborates with Deloitte thought leaders on all things related to business analytics, from the potential of cognitive technologies to industry-focused explorations and outcomes. Covering topics from emerging technologies to innovative business applications, Tom's Deloitte University Press series reveals leading-edge thinking on analytics and cognitive technology. Connect with Tom on LinkedIn and Twitter. 

    • insights@deloitte.com
    David Schatsky

    David Schatsky

    Managing Director | Deloitte LLP

    David analyzes emerging technology and business trends for Deloitte’s leaders and clients. His recent published works include Signals for Strategists: Sensing Emerging Trends in Business and Technology (Rosetta Books 2015), “Demystifying artificial intelligence: What business leaders need to know about cognitive technologies,” and “Cognitive technologies: The real opportunities for business” (Deloitte Insights 2014-15). Before joining Deloitte, David led two research and advisory firms.

    • dschatsky@deloitte.com

    Share article highlights

    See something interesting? Simply select text and choose how to share it:

    Email a customized link that shows your highlighted text.
    Copy a customized link that shows your highlighted text.
    Copy your highlighted text.

    Dispelling five myths about cognitive technology has been saved

    Dispelling five myths about cognitive technology has been removed

    An Article Titled Dispelling five myths about cognitive technology already exists in Saved items

     
    Forgot password

    To stay logged in, change your functional cookie settings.

    OR

    Connect Accounts

    Connect your social accounts

    This is the first time you have logged in with a social network.

    You have previously logged in with a different account. To link your accounts, please re-authenticate.

    Log in with an existing social network:

    To connect with your existing account, please enter your password:

    OR

    Log in with an existing site account:

    To connect with your existing account, please enter your password:

    Forgot password

    Subscribe

    to receive more business insights, analysis, and perspectives from Deloitte Insights
    ✓ Link copied to clipboard
    • Contact us
    • Submit RFP
    • Job search
    Follow Deloitte Insights:
    Office locations
    GLOBAL-EN Location: GLOBAL-English  
    About Deloitte
    • Newsroom
    • Social media
    • Leadership blog
    • Press releases
    • Submit an RFP
    • Job Search
    • Global office directory
    • Contact us
    • About Deloitte
    • Our impact
    Services
    • Audit & Assurance
    • Consulting
    • Risk Advisory
    • Financial Advisory
    • Legal
    • Tax
    Industries
    • Consumer
    • Energy, Resources & Industrials
    • Financial Services
    • Government & Public Services
    • Life Sciences & Health Care
    • Technology, Media & Telecommunications
    Careers
    • Job search
    • Experienced hires
    • Students
    • Life at Deloitte
    • Inclusion at Deloitte
    • Alumni
    • About the Deloitte organization
    • Terms of use
    • Cookies
    • Privacy
    • Privacy Shield
    • Accessibility statement

     

    © 2022. For information, contact Deloitte Touche Tohmatsu Limited.

     

    Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.