Latest news with #McKinsey&Co
Free Malaysia Today
2 days ago
- Business
- Free Malaysia Today
PM calls for report on AI-related challenges
Prime Minister Anwar Ibrahim said while AI could help save time, there has been no significant bottom-line impact. (Bernama pic) PUTRAJAYA : Prime Minister Anwar Ibrahim today lamented that despite billions of ringgit invested in digital technology and artificial intelligence (AI), productivity has remained sluggish and the sector's full potential has yet to be reached. He urged the chief secretary and the heads of government departments to look into the challenges related to AI, especially the AI productive paradox phenomenon. 'I want the chief secretary to the government and heads of departments to get back to me in the next two weeks or month. 'I do not want us to repeat the same mistakes made by mega corporations around the world,' he said at the monthly assembly of the Prime Minister's Department here. He said the productivity paradox, in which increased investments in technology do not necessarily correspond with an increase in measured productivity, had been observed in several reports by multinational consulting firm McKinsey & Co, investment bank JP Morgan, and an experiment in Denmark involving some 5,000 employees. He said while AI could help save time, there had been no significant bottom-line impact. 'In fact, departments which were supposed to go paperless end up being 'paper more',' he quipped. Anwar also warned against the use of AI as a tool to mask weaknesses or prolong corruption. 'The principle (when it comes to AI) is transparency and effectiveness. There's no use spending billions but having nothing to show for it,' he said.
Straits Times
3 days ago
- Business
- Straits Times
Companies are pouring billions into AI. It has yet to pay off.
Sign up now: Get ST's newsletters delivered to your inbox Corporate spending on artificial intelligence is surging as executives bank on major efficiency gains. So far, they report little effect to the bottom line. Nearly four decades ago, when the personal computer boom was in full swing, a phenomenon known as the 'productivity paradox' emerged. It was a reference to how, despite companies' huge investments in new technology, there was scant evidence of a corresponding gain in workers' efficiency. Today, the same paradox is appearing, but with generative artificial intelligence (Gen AI). According to recent research by McKinsey & Co, nearly eight in 10 companies have reported using Gen AI, but just as many have reported 'no significant bottom-line impact'. AI technology has been racing ahead with chatbots such as ChatGPT, fuelled by a high-stakes arms race among tech giants and super-rich startups, and prompting an expectation that everything from back-office accounting to customer service will be revolutionised. But the payoff for businesses outside the tech sector is lagging behind, plagued by issues including an irritating tendency by chatbots to make stuff up. That means that businesses will have to continue to invest billions to avoid falling behind – but it could be years before the technology delivers an economy-wide payoff, as companies gradually figure out what works best. Call it the 'gen AI paradox,' as McKinsey did in its research report. Investments in Gen AI by businesses are expected to increase 94 per cent in 2025 to US$61.9 billion (S$79.5 billion), according to IDC, a technology research firm. But the percentage of companies abandoning most of their AI pilot projects soared to 42 per cent by the end of 2024, up from 17 per cent the previous year, according to a survey of more than 1,000 technology and business managers by S&P Global, a data and analytics firm. Top stories Swipe. Select. Stay informed. Singapore I want to divorce my husband and be a single mother: More victims speaking up on emotional abuse World Trump drops Ukraine ceasefire demand after Putin summit Singapore Buying hope: Inside S'pore's love affair with the lottery Singapore She won big in Genting, but getting $240k winnings back to Singapore was dicey Opinion Confessions of a born-again Singaporean Business Manage your household finances like a business for clarity, say entrepreneurs Business Silence does not work when dealing with job loss blues Singapore Singapore congratulates Indonesia on 80th Independence Day Projects failed not only because of technical hurdles, but often also because of 'human factors' like employee and customer resistance or lack of skills, said S&P Global senior analyst Alexander Johnston. Gartner, a research and advisory firm that charts technological 'hype cycles', predicts that AI is sliding towards a stage it calls 'the trough of disillusionment'. The low point is expected next year, before the technology eventually becomes a proven productivity tool, said Gartner chief forecaster John-David Lovelock. That was the pattern with past technologies such as personal computers and the internet – early exuberance, the hard slog of mastering a technology, followed by a transformation of industries and work. The winners so far have been the suppliers of AI technology and advice. They include Microsoft, Amazon and Google, which offer AI software, while Nvidia is the runaway leader in AI chips. Executives at those companies have bragged how AI is reshaping their own workforces, eliminating the need for some entry-level coding work and making other workers more efficient. AI will eventually replace entire swaths of human employees, many predict, a perspective that is being widely embraced and echoed in the corporate mainstream. At the Aspen Ideas Festival in June, Mr Jim Farley, chief executive of Ford Motor, said: 'Artificial intelligence is going to replace literally half of all white-collar workers in the US.' Whether that type of revolutionary change occurs, and how soon, depends on the real-world testing ground of many businesses. 'The raw technological horsepower is terrific, but it's not going to determine how quickly AI transforms the economy,' said Mr Andrew McAfee, a principal research scientist and co-director of the Massachusetts Institute of Technology's (MIT) Initiative on the Digital Economy. Still, some businesses are finding ways to incorporate AI – although in most cases the technology is still a long way from replacing workers. One company where AI's promise and flaws are playing out is USAA, which provides insurance and banking services to members of the military and their families. After several pilot projects, some of which it closed down, the company introduced an AI assistant to help its 16,000 customer service workers provide correct answers to specific questions. USAA is tracking its AI investments, but does not yet have a calculation of the financial payoff, if any, for the call centre software. But the response from its workers, the company said, has been overwhelmingly positive. While it has software apps for answering customer questions online, its call centres field an average of 200,000 calls a day. 'Those are moments that matter,' said Mr Ramnik Bajaj, the company's chief data analytics and AI officer. 'They want a human voice at the other end of the phone.' That's similar to an AI app developed more than a year ago for fieldworkers at Johnson Controls, a large supplier of building equipment, software and services. The company fed its operating and service manuals for its machines into an AI program that has been trained to generate a problem summary, suggest repairs and deliver it all to the technician's tablet computer. In testing, the app has trimmed 10 to 15 minutes off a repair call of an hour or more – a useful efficiency gain, but hardly a workplace transformation on its own. Fewer than 2,000 of the company's 25,000 field service workers have access to the AI helper, although the company is planning an expansion. 'It's still pretty early days, but the idea is that over time, everyone will use it,' said Mr Vijay Sankaran, the chief digital and information officer at Johnson Controls. The long-term vision is that companies will use AI to improve multiple systems, including sales, procurement, manufacturing, customer service and finance, he said. 'That's the game changer,' said Mr Sankaran, who predicts that shift will take at least five years. Two years ago, JPMorgan Chase, the nation's largest bank, blocked access to ChatGPT from its computers because of potential security risks. Only a few hundred data scientists and engineers were allowed to experiment with AI. Today, about 200,000 of the bank's employees have access to a general-purpose AI assistant – essentially a business chatbot – from their work computers for tasks such as retrieving data, answering business questions and writing reports. The assistant, tailored for JPMorgan's use, taps into ChatGPT and other AI tools, while ensuring data security for confidential bank and customer information. Roughly half of the workers use it regularly and report spending up to four hours less a week on basic office tasks, the company said. The bank's wealth advisers are also employing a more specialised AI assistant, which uses bank, market and customer data to provide wealthy clients with investment research and advice. The bank says it retrieves information and helps advisers make investment recommendations nearly twice as fast as they could before, increasing sales. Ms Lori Beer, the global chief information officer at JPMorgan, oversees a worldwide technology staff of 60,000. Has she shut down AI projects? Probably hundreds in total, she said. But many of the shelved prototypes, she said, developed concepts and code that were folded into other, continuing projects. 'We're absolutely shutting things down,' Ms Beer said. 'We're not afraid to shut things down. We don't think it's a bad thing. I think it's a smart thing.' Mr McAfee, the MIT research scientist, agreed. 'It's not surprising that early AI efforts are falling short,' said Mr McAfee, who is a founder of Workhelix, an AI consulting firm. 'Innovation is a process of failing fairly regularly.' NYTIMES
The Star
6 days ago
- Business
- The Star
Companies are pouring billions into AI. It has yet to pay off.
Nearly four decades ago, when the personal computer boom was in full swing, a phenomenon known as the 'productivity paradox' emerged. It was a reference to how, despite companies' huge investments in new technology, there was scant evidence of a corresponding gain in workers' efficiency. Today, the same paradox is appearing, but with generative artificial intelligence. According to recent research from McKinsey & Co, nearly eight in 10 companies have reported using generative AI, but just as many have reported 'no significant bottom-line impact'. AI technology has been racing ahead with chatbots such as ChatGPT, fuelled by a high-stakes arms race among tech giants and superrich startups and prompting an expectation that everything from back-office accounting to customer service will be revolutionised. But the payoff for businesses outside the tech sector is lagging behind, plagued by issues including an irritating tendency by chatbots to make stuff up. That means that businesses will have to continue to invest billions to avoid falling behind – but it could be years before the technology delivers an economywide payoff, as companies gradually figure out what works best. Call it the 'the gen. AI paradox', as McKinsey did in its research report. Investments in generative AI by businesses are expected to increase 94% this year to US$61.9bil (RM259.82bil), according to IDC, a technology research firm. But the percentage of companies abandoning most of their AI pilot projects soared to 42% by the end of 2024, up from 17% the previous year, according to a survey of more than 1,000 technology and business managers by S&P Global, a data and analytics firm. Projects failed not only because of technical hurdles, but often because of 'human factors' like employee and customer resistance or lack of skills, said Alexander Johnston, a senior analyst at S&P Global. Gartner, a research and advisory firm that charts technological 'hype cycles', predicts that AI is sliding toward a stage it calls 'the trough of disillusionment'. The low point is expected next year, before the technology eventually becomes a proven productivity tool, said John-David Lovelock, the chief forecaster at Gartner. That was the pattern with past technologies such as personal computers and the internet – early exuberance, the hard slog of mastering a technology, followed by a transformation of industries and work. The winners so far have been the suppliers of AI technology and advice. They include Microsoft, Amazon and Google, which offer AI software, while Nvidia is the runaway leader in AI chips. Executives at those companies have bragged how AI is reshaping their own workforces, eliminating the need for some entry-level coding work and making other workers more efficient. AI will eventually replace entire swaths of human employees, many predict, a perspective that is being widely embraced and echoed in the corporate mainstream. At the Aspen Ideas Festival in June, Jim Farley, the CEO of Ford Motor Co, said, 'Artificial intelligence is going to replace literally half of all white-collar workers in the US.' Whether that type of revolutionary change occurs, and how soon, depends on the real-world testing ground of many businesses. 'The raw technological horsepower is terrific, but it's not going to determine how quickly AI transforms the economy,' said Andrew McAfee, a principal research scientist and co-director of the Massachusetts Institute of Technology's Initiative on the Digital Economy. Still, some businesses are finding ways to incorporate AI – although in most cases the technology is still a long way from replacing workers. One company where AI's promise and flaws are playing out is USAA, which provides insurance and banking services to members of the military and their families. After several pilot projects, some of which it closed down, the company introduced an AI assistant to help its 16,000 customer service workers provide correct answers to specific questions. USAA is tracking its AI investments, but does not yet have a calculation of the financial payoff, if any, for the call centre software. But the response from its workers, the company said, has been overwhelmingly positive. While it has software apps for answering customer questions online, its call centres field an average of 200,000 calls a day. 'Those are moments that matter,' said Ramnik Bajaj, the company's chief data analytics and AI officer. 'They want a human voice at the other end of the phone.' That's similar to an AI app developed more than a year ago for fieldworkers at Johnson Controls, a large supplier of building equipment, software and services. The company fed its operating and service manuals for its machines into an AI program that has been trained to generate a problem summary, suggest repairs and deliver it all to the technician's tablet computer. In testing, the app has trimmed 10 to 15 minutes off a repair call of an hour or more – a useful efficiency gain, but hardly a workplace transformation on its own. Fewer than 2,000 of the company's 25,000 field service workers have access to the AI helper, although the company is planning an expansion. 'It's still pretty early days, but the idea is that over time everyone will use it,' said Vijay Sankaran, the chief digital and information officer at Johnson Controls. The long-term vision is that companies will use AI to improve multiple systems, including sales, procurement, manufacturing, customer service and finance, he said. 'That's the game changer,' said Sankaran, who predicts that shift will take at least five years. Two years ago, JPMorgan Chase, the nation's largest bank, blocked access to ChatGPT from its computers because of potential security risks. Only a few hundred data scientists and engineers were allowed to experiment with AI. Today, about 200,000 of the bank's employees have access to a general-purpose AI assistant – essentially a business chatbot – from their work computers for tasks such as retrieving data, answering business questions and writing reports. The assistant, tailored for JPMorgan's use, taps into ChatGPT and other AI tools, while ensuring data security for confidential bank and customer information. Roughly half of the workers use it regularly and report spending up to four hours less a week on basic office tasks, the company said. The bank's wealth advisers are also employing a more specialised AI assistant, which uses bank, market and customer data to provide wealthy clients with investment research and advice. The bank says it retrieves information and helps advisers make investment recommendations nearly twice as fast as they could before, increasing sales. Lori Beer, the global chief information officer at JPMorgan, oversees a worldwide technology staff of 60,000. Has she shut down AI projects? Probably hundreds in total, she said. But many of the shelved prototypes, she said, developed concepts and code that were folded into other, continuing projects. 'We're absolutely shutting things down,' Beer said. 'We're not afraid to shut things down. We don't think it's a bad thing. I think it's a smart thing.' McAfee, the MIT research scientist, agreed. 'It's not surprising that early AI efforts are falling short,' said McAfee, who is a founder of Workhelix, an AI-consulting firm. 'Innovation is a process of failing fairly regularly.' – ©2025 The New York Times Company This article originally appeared in The New York Times.
&w=3840&q=100)
Business Standard
07-08-2025
- Business
- Business Standard
Dabur targets double-digit growth as monsoon, inflation trends align
Homegrown fast-moving consumer goods (FMCG) company Dabur India is eyeing a sustainable double-digit growth rate in both revenue and net profit, amid a normal monsoon and easing inflation, Chairman Mohit Burman told shareholders on Thursday. 'Looking ahead, we are optimistic. The signs are encouraging. A normal monsoon is on the cards, inflation is easing, and the broader economy is showing signs of steady recovery,' said Burman at the company's 50th annual general meeting. The maker of Hajmola candy and Real fruit juices has outlined a target of achieving a sustainable double-digit compound annual growth rate in both revenue and net profit by 2027–28. This, Burman said, will be achieved through a refreshed strategic vision, which will 'reflect the world we live in today, one that demands both stability and disruption, scale and agility, and a balance between our rich heritage and the modern consumer's evolving needs.' To frame this vision, the company enlisted McKinsey & Co to help refine and align its strategies for the next three years. As part of this, Dabur will also push the pedal on premiumisation and contemporisation of products across categories, while exploring inorganic opportunities — especially in the healthcare and wellness space — which can also extend to foods. In FY25, the company also decided to rationalise its portfolio by discontinuing underperforming products such as Vedic Tea, adult and baby diapers, and Dabur Vita, its nutritious drink brand. 'Our go-to-market transformation is well underway, and we're sharpening our focus on strategic acquisitions and reimagining how we operate,' said Burman. The company's portfolio currently includes three Rs 1,000 crore brands — Dabur Amla, Dabur Red Toothpaste, and Real — alongside three Rs 500 crore brands and 16 brands in the Rs 100–500 crore range. 'Today, eight out of every ten Indian households use at least one Dabur product, a testament to the trust we have built over generations,' Burman said. The company is also expanding its rural footprint while stepping up its efforts in urban markets. Its village coverage expanded by around 10,000 villages in the June quarter, now reaching 1.33 lakh villages. 'It's not just about keeping up; it's about staying relevant and staying ahead, with purpose and with heart,' he said.
&w=3840&q=100)
Business Standard
14-07-2025
- Business
- Business Standard
UK firms cut hiring for AI-exposed roles, tech and finance jobs fall 38%
British companies are becoming increasingly cautious about hiring for roles that are likely to be disrupted by artificial intelligence (AI), Bloomberg reported, citing findings from a recent McKinsey & Co study. The findings suggest that AI is amplifying the broader slowdown in the UK's employment market. Drop in job postings for AI-sensitive roles Job listings in the UK have seen a general decline as employers attempt to rein in spending amidst stagnant economic growth and high borrowing rates. The study stated that overall online job advertisements fell by 31 per cent in the three months leading up to May, compared with the same timeframe in 2022. However, the decrease has been especially pronounced in positions expected to be heavily affected by AI. Roles in areas such as technology and finance saw a 38 per cent reduction — nearly double the average fall, according to McKinsey. This trend is putting additional strain on the UK's labour market at a time when tax hikes are already triggering cutbacks in lower-skilled sectors like hospitality and retail. AI-exposed occupations see sharpest declines McKinsey's data shows over the past three years, the demand for professionals such as software developers, consultants, and graphic designers has decreased by more than 50 per cent. While some of this contraction may stem from industry-specific challenges and wider economic pressures, McKinsey noted that even in sectors like IT and professional services — where business performance remains robust — job opportunities have continued to fall. AI already influencing hiring patterns According to Pawel Adrjan, director of EMEA economic research at the Indeed Hiring Lab, employers tend to cut hiring in fields that involve building or using AI tools. For instance, job listings in mathematics — primarily encompassing roles in data science and analytics — have halved since pre-pandemic times, despite being among the highest for AI-related mentions in job descriptions. In contrast, sectors such as real estate and education, where AI references are minimal, have seen growth in vacancies. Entry-level positions face pressure Entry-level positions, particularly those involving repetitive tasks like document review or meeting summarisation, are increasingly at risk of automation. Job postings for roles such as internships, apprenticeships, or junior positions not requiring degrees have plummeted by nearly one-third since the introduction of ChatGPT at the end of 2022, according to Adzuna. AI expert predicts major job displacement by 2045 In an interview with The Guardian, Adam Dorr, research director at RethinkX, warned of a major shift in employment driven by AI and robotics. He stated that by 2045, most human jobs could become "obsolete", as machines would be capable of performing nearly all tasks faster and more cost-effectively. Dorr and his team have analysed over 1,500 significant technological upheavals and concluded that once a new technology becomes established, it typically replaces the existing system within 15 to 20 years. Microsoft cuts thousands of jobs, focuses on AI upskilling Microsoft has laid off over 15,000 employees in 2025, with the most recent round alone accounting for approximately 9,000 job losses. The cuts have primarily affected divisions such as Xbox and sales. The company is now encouraging its remaining staff to develop their AI-related skills as it pivots more aggressively towards the new technology.
