Study: Expenditures For AI Are Estimated To Soar 52% Above IT's Budget

Illustration of AI (Unsplash)

JAKARTA - The latest global study from the (IBM) Institute for Business Value found that retail executives and consumer products surveyed significantly shifted their focus to artificial intelligence (AI).

The survey results show that the executives project that spending outside traditional IT operations could increase by 52% next year. The report entitled "Embedding AI in Your Brand's DNA," reveals how various brands are preparing for the next AI-based transformation phase at the company.

By 2025, retail companies and consumer products surveyed stated their plans to allocate an average of 3.32% of their revenue for AI equivalent to USD33.2 million per year for companies worth USD1 billion. These investments will include functions such as customer service, supply chain operations, recruitment, and marketing innovation, which show expansion of AI beyond traditional IT applications. The main findings include:

Pesat's adoption in Companies: The report found that 81% of the executives surveyed and 96% of their teams were already using AI at moderate or significant levels. The executives expressed the desire to expand the use of AI with more complex implementation, such as integrated business planning, with plans to increase usage by 82% by 2025.

Employment Transformation: The executives surveyed estimate that 31% of employees need to learn new skills to work with AI in the next year, increasing to 45% in three years. The use of AI on personalized customer services, particularly for the need to provide responses and follow-up, is projected to rise by up to 236% in the next 12 months compared to the previous year, based on surveys. In addition, the survey also shows that 55% of these improvements are expected to involve human-AI collaboration, whereas only 30% of which will be fully done automatically show the importance of preparing employees for smooth AI integration.\

The AI Ecosystem Platform: Investment in ecosystem platforms (devices facilitating data exchange and AI models) is projected to increase rapidly. Respondents project growth from 52% today to 89% in the next three years, as companies seek to integrate AI capabilities with business and technology partners to accelerate innovation and drive efficiency.

AI Governance Gap: Although 87% of the surveyed executives claim to have a clear AI governance framework, less than 25% have fully implemented and routinely reviewed tools for risk management such as bias, transparency, and security. This shows a sizeable gap in operational oversight.

"AI is now a strategic necessity, and we see a strong commitment in various Indonesian organizations spread across the industry to adopt AI responsible for their various workflows," said Roy Kosasih, President Director at IBM Indonesia.

"Retail companies and consumer products around the world have been experimenting with AI and seeing the benefits brought by AI embedded, not only for increased productivity, but also for increasing relevance, engagement, and brand trust."

This report emphasizes that successful brands need to change the perspective on AI, from just a tool to increase productivity to the main driver of innovation. To achieve this, it is necessary for the Company to review governance and skills improvement strategies. Retail companies are also advised to adapt AI initiatives to suit brand priorities and collaborate with strategic partners, including start-ups and technology companies. In addition, it is important to eliminate the barrier between financial teams, technology and business. With cross-function collaboration, leaders can build a business plan that shows how AI can provide long-term competitive advantages