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Keys to Successful Innovation

through Artificial Intelligence

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Artificial intelligence (AI) and machine learning (ML) have the potential
to transform nearly every industry, but many organizations struggle to
adopt and implement AI/ML at scale. Recent Gartner research shows
that only 53% of ML projects make it from prototype to production.
Chief information officers and IT leaders find it hard to scale AI/ML
projects because they lack the tools and talent to create and manage a
production-grade AI pipeline.

Data is often cited as the number one challenge. The other common
barriers we see today are business- and culture-related. For instance, Dr. Priya Ponnapalli
organizations often struggle to identify the right use cases to start their Senior Manager, Applied Science
ML journey, which is often exacerbated by a shortage of skilled talent to Amazon Machine Learning
execute on an organization’s ML ambitions. Business and technical leaders Solutions Lab
play a critical role in addressing these challenges by driving a culture of
continuous learning and innovation; however, many lack the resources to
develop their own knowledge of ML and its use cases. According to “The
State of AI in 2021,” McKinsey & Co.’s global survey, there are certain best
practices that differentiate AI/ML high performers from those that struggle
to see the full value of AI/ML. On the technical front, the companies
seeing the biggest bottom-line impact from AI adoption are more likely to
follow both core and advanced AI best practices, including ML operations,
move their AI work to the cloud, and spend on AI more efficiently.

In my role as leader of the Amazon Machine Learning Solutions Lab,

I head a global team that helps AWS customers identify and implement
their most important ML opportunities. I’ve been fortunate to work with
some of the most innovative organizations in the world, such as the
National Football League, Formula 1, Intel, and United Airlines, as they
transformed their businesses through ML. I’ve seen the challenges of
ML-led transformation firsthand and helped our customers overcome
them. That’s why I’m very excited to present this research from Harvard
Business Review Analytic Services that not only uncovers some of the
common challenges to AI/ML implementation but also offers guidance to
overcome them.
Keys to Successful Innovation
through Artificial Intelligence

Artificial intelligence (AI) and machine learning (ML) are HIGHLIGHTS

playing an increasingly outsized role in strengthening and
transforming industries around the world. The global AI
More and more companies are
market value is expected to reach $267 billion by 2027,1 using artificial intelligence (AI) and
and the technology is expected to contribute $15.7 trillion machine learning (ML) for everything
to the global economy by 2030.2 While the technology from boosting productivity to
enhancing customer experiences
is still in its infancy in some industries, other sectors are and satisfaction to making better
testing the waters, and still others are already reaping the decisions faster. These technologies
are also used to generate new
benefits from their AI/ML transformation and charting a revenue opportunities and improve
path for their industries. operational efficiencies.

More and more companies are using AI/ML, for everything from boosting
productivity to enhancing customer experiences and satisfaction to making Implementing AI/ML successfully
requires more than just great
better decisions faster. These technologies are also used to generate new
technology and mountains of data.
revenue opportunities and improve operational efficiencies.
It also requires rethinking silos and
As the world economy moves from a time when every industry operates fragmented legacy systems, adding
from a different set of core competencies to one shaped by data and analytics, capabilities, and retooling the
everyone from C-suite executives to IT teams must understand how to use AI/ company culture.
ML strategically and efficiently to achieve their organizations’ transformational
and strategic goals.
But the road to a successful AI/ML implementation is not always a straight While the details of implementing a
or smooth one. The journey may come with detours and require constant successful strategy for AI/ML vary
reiteration and reevaluation to stay on track and produce the intended outcome. depending on each business and
Defining business goals is the first step to figuring out what sort of strategy the specific project, the steps to get
is needed. “In every large corporation, you have somebody screaming, ‘You there are universal.
need to do more AI!’ The question from smart people is, ‘For what reason?,’
says Mark Maenner, head of data transformation for the BMW Group.
Implementing AI/ML successfully requires more than just great technology
and mountains of data. It also requires rethinking silos and fragmented legacy
systems, adding capabilities, and retooling the company culture, Marco Iansiti

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 Harvard Business Review Analytic Services
“In every large corporation, you have somebody screaming,
‘You need to do more AI!’ The question from smart people is,
‘For what reason?,’” says Mark Maenner, head of data
transformation for the BMW Group.
and Karim R. Lakhani, Harvard Business School professors
and coauthors of Competing in the Age of AI, wrote in a 2020
Harvard Business Review article of the same name.
An AI/ML transformation starts with a well-conceived
strategy to address specific business problems, then moves
to getting buy-in from key stakeholders and democratizing
the data so that everybody has access and can benefit from
its use. From there, companies can implement AI to address
the business problem initially identified.
AI/ML Transformation,
Fueled by Covid-19
As Covid-19 has shown, sometimes long-range planning
simply isn’t possible. The pandemic forced businesses in
every sector to revamp their operations and invest in AI/ML,
something that may have been unthinkable for many just a
year before. Many enterprises had to create systems on the fly
or were forced to scale projects they’d delayed for one reason
or another, with great results in many cases.
“AI-driven processes can be scaled up much more rapidly
than traditional processes can, allow for much greater scope
because they can easily be connected with other digitized
businesses, and create incredibly powerful opportunities for
learning and improvement,” wrote Lakhani and Iansiti in the
“Competing in the Age of AI” article.
AI/ML was central to the fight against Covid-19. Scientists
used these technologies to aid in everything from diagnosis
and drug development to forecasting the spread of the disease
as well as to monitoring and surveilling the population.3
The benefits of these technologies during Covid-19
extend beyond advances in the health care industry, too.
Jack Berkowitz, chief data officer at ADP Inc., says the HR
technology company had already moved its people analytics
and workforce benchmarks to the cloud, but the pandemic
was a force multiplier for its use of AI/ML. “We were able
to build new capabilities we never thought possible,” says
Berkowitz. “In addition to day-to-day operations and analytics
for our clients, we were deeply involved in the PPP [Paycheck
Protection Program] loans because we pay a large portion of the
workforce, particularly for the small and midsize businesses.
To do that processing and build those reports they needed to
file the loans, [and] we had to do that all in the cloud.” Within
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20 days, all relevant information clients needed for their PPP
applications was available and accessible in the cloud.
Berkowitz was pleasantly surprised by clients’ readiness to
accept these technologies and capabilities. “In the HR space,
people have been classically a bit more resistant to taking on
new things, but they’ve really embraced those capabilities.
When they’re thought through and packaged in a way that’s
consumable, the uptake is through the roof.”
The BMW Group was also well into its AI/ML journey prior
to the pandemic, but Covid-19 created a sense of urgency to
take all its AI capabilities remote. “[The pandemic] was an
accelerator, not only for AI and ML but also for gaining insight
from all the data we had, as well,” says Josef Viehhauser,
platform lead and enterprise analytics at the BMW Group.
“We already had use cases running on our supply chains, most
of which are quite simple events. The pandemic brought an
understanding of the influence of catastrophes on the supply
chain in specific regions. We were able to boost our existing
learnings to move us forward and get better in those areas.”
Successfully Innovating with AI/ML
Long before the pandemic, companies around the globe were
realizing the transformative effect of these essential, strategic
technologies. A Harris poll found that 55% of companies
reported that they accelerated their AI strategy in 2020 due
to Covid-19, and 67% expect to further accelerate their AI
strategy in 2021.4
Still, according to a 2020 NewVantage Partners survey,
nine out of 10 leading businesses have investments in AI
technologies but less than 15% deploy AI capabilities in their
work. This huge gap may be in large part because many
companies don’t fully understand the technology’s full
potential—or they don’t have a clear strategy to use AI/ML
to meet their goals. Organizations that do are able to innovate,
develop intuitive products, and deliver better service.
The BMW Group is one such company that leverages
technology effectively to increase innovation. It employs
AI/ML for everything from product development to
forecasting demands for its goods and services, explain
the BMW Group’s Viehhauser and Maenner. The company
developed a proprietary translation solution to help its
multilingual workforce better communicate. And it processes
 Harvard Business Review Analytic Services
According to a 2020 NewVantage Partners
survey, nine out of 10 leading businesses have
investments in AI technologies but less than
15% deploy AI capabilities in their work.
energy-relevant data at all its locations to establish energy
consumption patterns and heat and cool its buildings more
efficiently. “BMW Intelligent Personal Assistant,” a voice-
activated virtual assistant, provides information about the
vehicle, plays entertainment, and helps customers park
and drive more safely. In addition, the company has a new
operating system that offers an all-encompassing, intelligent,
multi-sensory experience tailored to the user at hand. The
company is able to fulfill its overall mission to make better
products and enhance the customer experience through the
effective use of technology.
Similarly, ADP uses AI/ML to aggregate and anonymize
massive amounts of data to help its customers maximize
employee retention, attract new talent, compare key people
metrics to their competition’s, and manage risk, compliance,
and labor costs, notes ADP’s Berkowitz. The benefits extend
beyond HR. “So who are we building these systems for?
Primarily, people think about the HR practitioner—the person
who makes sure that you get paid or that your benefits are
there or that your promotions are taken care of. We also build
them for CXOs [chief experience officers], the CHRO [chief
human resources officer], or the CFO, somebody who has an
operational responsibility, or it could be a first-line manager.”
Technology helped ADP reduce 21 million job titles down
to several thousand, which allowed the company to develop
compensation benchmarks across industries and positions.
“We process that information to come up with, for example,
what does a software developer make in Seattle versus a
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software developer in Austin versus one in New York or
Sioux City, Iowa? That [assessment] takes a massive amount
of machine learning and a massive amount of computing
capability,” he explains. “We also provide tools companies
can use to move the needle on their diversity and inclusion
by measurement, because once you can measure what’s going
on in your company, you can improve it.”
In the retail industry, an effective use of AI/ML can help
enhance the customer experience through predictive behavior
analysis and hyper-personalization techniques. These
technologies can be programmed to call the customer by name
and track customer preferences. Chatbots, for instance, are now
a staple for responding to FAQs and providing specific customer
information such as account balances and order status.
Contact centers are deploying AI/ML services to handle a
variety of customer requests and inquiries, such as through
intelligent chatbots, intelligent voicebots, smart routing,
real-time voice analytics with sentiment analysis, agent assist
with next best action, and post-call analytics. Enhancing the
overall customer experience can boost repurchase odds and
improve long-term loyalty.
Keys to a Successful AI Implementation
These innovations didn’t happen by accident. The BMW Group,
ADP, and other successful companies have worked diligently
and deliberately to develop a strategy that would help them
achieve success by starting with their big-picture goals and
 Harvard Business Review Analytic Services
“There’s value in bringing all those
other voices into the discussion,
whether it’s diversity of race or age.
[It’s] not a top-down or bottom-up
approach; it’s an ‘everyone should
have a seat at the table’ approach,”
says Kirk Borne, chief science officer
at Data Prime.
working backward. While the details of implementing a
successful strategy for AI/ML vary depending on each business
and the specific project, the steps to get there are universal.
Define your why.
Adopting AI/ML is never the goal; AI exists to support the
overall business objective developed by considering the larger-
picture goal. As AI evangelist Andrew Ng asserts in his AI
Transformation Playbook, strategy is key to harnessing the
power of AI.
Maenner says every project at the BMW Group begins with
one question: What is the total impact of the project versus the
investment you need to make? “BMW is a product company.
No one is delivering solely AI to a customer,” he says. “AI and
ML play an integral role in the digital transformation of the
BMW Group and help us improve the product experience
for our customers, the way we develop our products, or even
understanding processes.”
ADP began its AI transformation with the goal of corralling
the data from more than 90 million employee records into
robust models that could be employed to serve its customers
under a variety of different scenarios. The first step was making
sure the data was accurate and coherent. “We treated data as
a product to enable our AI scientists and engineers to get the
information they need quickly and efficiently,” says Berkowitz.
“In our first discussion, we determined the components and
budget we needed to do that. When some of the things they
thought would pan out didn’t work, we pivoted. We were
constantly iterating.”
In the end, that iterative trial-and-error process eventually
led to a 30% decrease in downtime and a 60% increase in
mobile app deployments, explains Berkowitz. When the
pandemic hit, the company was ready.
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Don’t try to boil the ocean.
There is always the temptation to tackle everything on a
company’s AI/ML wish list at once, but business leaders
should start small by breaking down the ultimate goal into
its component parts. Identify specific use cases in which AI/
ML could solve business problems or add value to existing
products and services.
Simple projects can pay huge dividends and spark even
greater successes, says Kirk Borne, chief science officer at
Leesburg, Va.-based DataPrime, a data science, analytics, and
AI/ML products and solutions company. “A recommender
engine saying people who bought this product also bought
this other product is a pretty simple thing that generates
significant revenue. I think 70% of Netflix’s revenue comes
from a recommender.”
Move from control to consensus.
Admiral Grace Hopper, the founder of modern computing,
was quoted in a 1976 Computerworld article as saying the most
dangerous phrase in the language is, “We’ve always done
it this way.” A successful implementation needs executive
buy-in to get everyone ready for change and on board with
a new plan.
AI/ML implementation doesn’t need to come just from
the top; it is a team sport, and the whole business is the
team. “When you expect a data team to produce things that
benefit everybody without bringing in the different parts of
the business, that project is going to fail,” says Borne.
Creating engaged, high-performing teams that share
data, communicate openly, and learn from feedback keeps
everyone invested in the mission and in the loop about what
the company wants to achieve. “There’s value in bringing all
those other voices into the discussion, whether it’s diversity
of race or age. [It’s] not a top-down or bottom-up approach;
it’s an ‘everyone should have a seat at the table’ approach,”
says Borne.
Creating team cohesion through effective communication
and shared goals in service of a higher cause is important for
success. When employees and teams truly understand the
why, they quickly get on board with the how and the what.
Whether it’s through videoconference technology, messaging
systems, email, or meet-ups, communication is essential to
stay on top of what’s working and not working and to remain
alert and ready for course corrections.
Break down the silos.
Large companies have traditionally separated divisions such
as marketing, operations, and HR into different entities that
operate like church and state. But today’s most efficient
organizations eliminate silos and integrate data analytics
across divisions to power as many processes as possible. This
development represents a big but necessary shift.
 Harvard Business Review Analytic Services
“To make the transformation work, you must
take people where they are and train them on
the competencies. They do not need to be data
scientists, but they need to understand what data
or what AI is,” says Mark Maenner, head of data
transformation for the BMW Group.
“We discovered that it’s really hard to share best practices
across many teams,” says Viehhauser. “So, [we] build up [our]
use cases, and after having executed many use cases, then
we take a step back, reflect, and ask [ourselves], ‘What can
we harmonize across all these use cases? What can I share in
terms of know-how?’”
According to Viehhauser and Maenner, the BMW Group
centralized its resources and created cross-functional
analytical teams to better evaluate its needs and to discover
new use cases that could be addressed using AI/ML principles.
It also made information more accessible and available
throughout the company. Even sharing code repositories
and data catalogs proved to be a big hit with its employees, all
of whom have an opportunity to learn data science through
a specified and tailor-made training program.
“To make the transformation work, you must take people
where they are and train them on the competencies,” says
Maenner. “They do not need to be data scientists, but they
need to understand what data or what AI is. It’s important
to give tech teams the insight and purpose to help them
understand how and when they’re making the difference.
Having a lot of people trained in the technology and its
possibilities is the power in what we have today.”
ADP’s adaptation began with one small team working
directly with Berkowitz. Today, the company operates on a
hub-and-spoke model, with 11 different teams led by experts
in specific areas such as tax, sales, or marketing who are tasked
with spreading the capabilities throughout the company.
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Recognize a failing project.
There’s a common denominator among companies that fail
in their efforts to adopt AI: They lack the vision, discipline,
talent, alignment, right information, and right use case.
“AI often starts with the sandbox. It’s no surprise that
moving from a sandbox to production is super hard to do,”
says Viehhauser. “You have to come up with templates that
people can reuse to make the time moving from [the] sandbox
to production really short. Then you’re able to ultimately
create value and leverage benefits.”
So, what separates successful projects from unsuccessful
ones? Many projects fail because they have a data problem.
They may have the wrong kind of, not enough, or biased data.
Unsurprisingly, AI models need a massive amount of good-
quality data. While no company sets out to create a biased AI
model, it can happen if diverse perspectives are omitted in the
design process. “In the early days of the big data revolution,
companies bragged about how much data they had. And I’m
thinking to myself, ‘Everyone’s got a lot of data. That’s not
a competitive differentiator. Tell me about the productive
value!’” says Borne.
Viehhauser says that the BMW Group established a
centralized, on-premises data lake in 2015 that collects
and combines anonymized data from sensors in vehicles,
operational systems, and data warehouses to derive historical,
real-time, and predictive insights. However, the company
needed to more easily scale its platform to support the
growing demands of internal and external stakeholders.
 Harvard Business Review Analytic Services

The BMW Group designed its platform around principles set out in
its Code of Ethics for AI guidebook while outlining the company’s
commitment to human agency and oversight, nondiscrimination,
environmental and social well-being, and data transparency and
accountability.

Hence, it developed a cloud-native solution to both support
the data needs of all the various internal business units and
to allow the company to move quickly to address the array
of emerging use cases.
Find the right partner.
The chances of a successful strategy fueled by AI/ML greatly
improve, says Borne, if business leaders remember that data
is a science and its implementation requires an interactive
process of testing, validating, and refining the hypothesis,
then testing and refining the next iteration.
An experienced AI vendor can help organizations succeed
during this phase, says Maenner. “We say, ‘If you swim in
your soup all night and day, then you probably just know
your soup.’ Working with a good implementation partner
can broaden your understanding of the possible and create
a quicker return on investment.”
Use data responsibly and ethically.
As AI becomes more prevalent in daily life, there are increased
concerns about whether that data is used responsibly, which
means everything from enhancing data privacy to reducing
bias in the modeling.
To assure customers that their data would be dealt with
ethically, ADP rolled out an AI and data ethics board,
announced its principles for using and applying the
technology, and built its own monitoring setup. “Included
in that are things about transparency, ‘explainability,’ and bias.
We’ve implemented some things that are purely automated
around how to measure those things. We continue to push
the outer edges,” says Berkowitz.
Similarly, the BMW Group designed its platform around
principles set out in its Code of Ethics for AI guidebook while
outlining the company’s commitment to human agency and
oversight, nondiscrimination, environmental and social well-
being, and data transparency and accountability.
Building in the ethical component goes a long way
toward building trust with employees, customers, and the
broader population, which is essential for the long-term
growth of AI/ML.
Conclusion
Maenner believes the transformational aspect of these
technologies comes down to finding the right balance between
the revolution and the evolution. “You really need to push
people on one side and ask them to take ownership of their
responsibilities on the other side,” he says. “They have to
understand that if they are investing [in] AI/ML, it will also
harvest success in terms of budgets or improved processes.”
While there are many challenges in adopting AI/ML or
finding the right strategy to employ these technologies,
enterprise success stories like those of ADP and the BMW Group
show that any hurdles are clearly outweighed by the benefits.
Further, adopting AI is no longer optional for businesses that
want to remain competitive, and it is even more critical for
those that want to stand out as industry leaders.
In essence, it’s a tug-of-war to see which prevails—AI or
the status quo. Close observers such as DataPrime’s Borne are
betting on AI. “Every company needs to have a competitive
advantage and will keep pushing against the headwinds to
succeed,” he says.

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“You really need to push
people on one side and ask
them to take ownership of
their responsibilities on the
other side. They have to
understand that if they are
investing [in] AI/ML, it will
also harvest for success
in terms of budgets or
improved processes.”
Mark Maenner, head of data
transformation, BMW Group
 Harvard Business Review Analytic Services

Endnotes

1 Fortune Business Insights, “Artificial Intelligence Market to Reach USD 266.92 Billion by 2027; Increasing AI Technology Users to Spur Market Growth,”
May 7, 2021. https://www.globenewswire.com/en/news-release/2021/05/07/2225220/0/en/Artificial-Intelligence-Market-to-Reach-USD-266-92-Billion-by-
2027-Increasing-AI-Technology-Users-to-Spur-Market-Growth-Fortune-Business-Insights.html.
2 P
 wC, “Global Artificial Intelligence Study: Exploiting the AI Revolution,” https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-
intelligence-study.html.
3 AAAS Report, “Artificial Intelligence: A Vital Tool in the Pandemic,” May 4, 2021. https://www.aaas.org/news/artificial-intelligence-vital-tool-pandemic.
4 Appen, “The 2021 State of AI and Machine Learning Report,” July 15, 2021. https://appen.com/whitepapers/the-state-of-ai-and-machine-learning-report/.

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