Indian firms should scale AI beyond PoCs, prioritise data standardisation

A majority of Indian organisations are still at a nascent stage when it comes to scaling artificial intelligence (AI) solutions, with 75 per cent of them having their AI strategy at the proof of concept (PoC) level, said a Nasscom-EY joint study released on Thursday.

To drive the leap from AI-ready to AI-first organisations, Indian enterprises will need to move beyond PoCs to scale AI implementations, the report suggested.

“To boost AI adoption, Indian companies need 'right-sized' operating models, combining internal and external talent, consistent leadership oversight, and AI centres of excellence (CoEs) to scale AI initiatives,” said the report titled "Nasscom-EY 2024 AI Adoption Index, 2024."

The study further stated that while data standardisation in organisations had improved, a more focused strategy was needed for AI-ready backend data security and access.

Speaking on the report, Sangeeta Gupta, senior vice president and chief strategy officer, Nasscom, said, “As AI evolves from an emerging technology to a fundamental pillar of business strategy, Indian enterprises have a unique opportunity to lead this transformation. The 2024 AI Adoption Index demonstrates that while we've made significant strides, the journey from experimentation to widespread adoption requires decisive action and sustained commitment.”

The report also stated that though the Indian AI market was at a nascent stage, it was expected to mirror the global AI market growth rate of 25-35 per cent over the next 3-4 years.

India’s overall AI adoption maturity index remains at 2.47 on a 4-point scale, a marginal increase from the 2022 score of 2.45, according to the study.

Further, despite a slowdown in tech spending, AI budgets in Indian firms remain strong, according to the report, with 40 per cent of companies having dedicated AI funds and 64 per cent allocating at least 5 per cent of their tech budget to AI.

On AI talent, the report said, “While India is a major talent hub for AI, enterprises struggle to find domain-specific and strategic AI expertise, often starting with 'AI-as-a-service' models.”

The study had interesting insights on GenAI adoption in Indian enterprises, noting that there was a slower rate of adoption in Indian firms, despite rapid global adoption, likely due to data and use case readiness required to effectively leverage Generative AI.

“While sectors such as BFSI and retail are in the PoC stages of GenAI solutions, the majority of the legacy sectors such as energy & utilities and manufacturing are yet to start PoCs,” said the report.

The report also provides a detailed analysis of AI adoption across seven key sectors.

While sectors such as BFSI, retail and CPG, energy and utilities (E&U), healthcare, and transportation exhibit similarities in their tendency to identify AI use cases that benefit their organisations and in moving the use cases to PoC and production, sectors such as manufacturing and telecom, media and entertainment (TM&E) have moved beyond the PoC stage and are collaborating with industry disruptors in implementing AI solutions.

“Over 50 per cent of companies in BFSI, CPG and retail, E&U, healthcare, and TM&E sectors have a PoC-heavy AI approach, while 39 per cent in manufacturing and 65 per cent in transport and logistics focus on transformational AI strategies,” the report added.