Implement AI Podcast #86 - Why 90% of Enterprise AI Projects Fail (And How to Be in the 10%)

Dr. Nicola Hodson (0:00)

AI is not just enhancing the business model, but it actually will become the business model by 2030 And so that is a really different set of thinking, because we talked about sort of letting go of this ability of driving incremental change, and really thinking about how do you drive constant change in the way your business model operates.

Piers Linney (0:21)

Welcome to the Implement AI Podcast, the podcast where we explore the impact of AI on your business. I'm Piers Linney, alongside my co-host and co-founder of Implement AI, Dr. Aalok Shukla. We cover the real world applications and impacts, how AI can be practically applied to drive growth and efficiency in your organization. We cut through the jargon to focus on actionable strategies and use cases to highlight the transformational power of AI.

Let's dive into today's conversation.

I'm Piers. I'm Aalok. Well, I take it as a time. I was grilled by the team at IBM, but we finally got Nicola Hodson on today. He's the chair of IBM UK and she was the CEO of IBM UK, and she had a very senior role at Microsoft as well. She's one of the most senior women in British technology on the board of Tech UK as well. I think what we're going to ask, Raj, because we have engaged at IBM, sort of socially sometimes, but also from a potential partner perspective too, by asking Nicola really about what's her view on AI, obviously, Aalok, but also what's her experience of working with larger companies and is it different?

Dr Aalok Shukla (1:33)

Totally. Very experienced business leader and it's great to understand exactly what large enterprise CEOs are thinking about and talking about, and so really looking forward to talking to her.

Piers Linney (1:43)

If you're new to the podcast, Implement AI Podcast, if you're not new to the podcast, then please leave a like, ring the bell if you're watching on YouTube, and follow us.

If you enjoy the content and it's going to be a great chat with Nicola, I'm sure, please leave a review on Apple. Let's get Nicola in. Well, Nicola, it's great to have you on. We met, I don't know how many times we met, quite a few occasions. I've been down to Ibm as well in Victoria. Tell us a bit about your background.

Dr. Nicola Hodson (2:10)

I'm Nicola Hodson. It's great to be here and it's great to have met you on various occasions including the last couple of three piece.

I'm Chair of Ibm in the UK and Ireland. I'm Deputy President of TechUK, and I'm also on a couple of external boards as well.

Piers Linney (2:29)

Your background, so you were the CEO of Ibm and then you were Microsoft.

Dr. Nicola Hodson (2:33)

Yes, that's right. And before that, I spent a long time working at Microsoft.

Piers Linney (2:38)

So safe to say you're one of the leaders in UK technology, especially female leaders. Shall I add that?

Dr. Nicola Hodson (2:45)

Yes.

Piers Linney (2:46)

So we talk a lot about AI whenever we meet. And this podcast about the practicalities of it. I think what's really interesting about your experience is kind of moving up a scale. So we focus on SMEs and corporates and small enterprise. We're having our first conversation with a local authority now, which would be interesting. But again, your expertise and you got lots of data, you've done surveys. In my experience of us engaging Ibm because we have done as a potential partner, is the enterprise. So how would you describe the state of enterprise AI? Because in our view, you see a lot of big companies talking about it, probably more than the other SME or corporate. They've got the resources, we understand the value.

If you move a dollar by 1 percent, it falls straight through to your bottom line, makes a big difference, your share price as well. So how would you describe the state of enterprise AI?

Dr. Nicola Hodson (3:35)

If we start at the top level, in a sense, what is on the agenda for a CEO and a board, typically in a big organization? There are a whole bunch of externalities, as you know. So there's the oil crisis, there are supply chain challenges in chips and many other supply chains, energy prices, talent gaps, and then you've got a whole bunch of tech challenges. People are still doing digital transformation.

You've got various regulators looking at cyber and making sure everyone is kept safe. And you've got then AI and a lot of external pressure on, are you adopting? The board is leaning on the XCOM to make sure there's adoption. There's pressure from the ground up because early career people are coming into the workplace with AI skills because they're using it every day. And so amidst all of that, most organizations certainly that I've worked with and talked to somewhere through a journey of implementing AI. And they've gone about it in different ways. Some have just sort of let lots of projects bloom and they've tested out where have they got through. And then they've gotten to a certain point and said, hang on a minute, there are some challenges here. We need to make sure we got the guardrails in place. Others, typically more heavily regulated sectors, have put all the guardrails in place first, and then they've gone on to start implementing projects. But they're getting stuck at different phases. Sometimes after the pilot stage, when they realize either the data isn't in the right place and they need to do a bit more foundational work there, or that they want to make sure that they've got all of the governance and the governance has caught up. And then along in the middle of all of that came Agentic AI and that created even more governance challenges. And so folks are pretty much all on the journey. You know, when you look at surveys, 70 percent, 80 percent are doing something.