Saudi-Arabia and the United Arab Emirates just announced plans to buy hundreds of thousands of advanced AI chips. And at France’s “AI Action Summit” earlier this year, public and private actors pledged investments surpassing €300 billion to advance AI in Europe.

It is very clear that expectations about the economic benefits of this technology are sky high.

Yet, a recent McKinsey survey found that more than 80% of organizations worldwide are not yet seeing any tangible impact on their profits. So where does this mismatch come from?

The key to the answer is that AI is not a stand-alone technology. For its benefits to materialize, AI has to be deeply embedded in business processes.

And for that, companies have to put three pillars in place: modern cloud software, modern data management, and a consistent stack of AI technologies linking with them.

Let’s start with software: All successful companies use software to organize and optimize their business operations – from order intake and procurement to production, delivery and customer service. Yet, many enterprises still rely on legacy on-premise software – that is, a wide range of programs installed on the company’s local IT servers.

This “software landscape” often consists of disparate applications plugged together – heavily modified over the years and frequently not up to date with the latest innovations. These complex systems are costly to maintain, and they make it difficult for companies and their leaders to respond to challenges and opportunities with agility and speed.

AI applications, too, face major obstacles in legacy systems: They have a hard time grasping the company’s inner workings, making sense of fragmented and widely distributed datasets, and may not be able to find certain key information.

The first step towards powerful business AI, therefore, is the move from legacy on-premise software to modern cloud software – that is applications that are centrally managed and maintained in professional data centers, constantly updated with new innovations, and tightly linked so information can flow freely between the different parts of the company.

For companies today, this so-called cloud migration is faster, smoother and more transparent than ever before – thanks to the proven methods and advanced digital tools now available.

And the prize is larger than ever before, too: integrated cloud applications work together out of the box and cover the company’s software needs end-to-end across departments.

This integration allows a car maker, for example, to reduce time and cost – say, from receiving an order through the vehicle’s production to its final delivery.  Similar benefits extend to all other industries and workflows.

A cloud migration, consequently, is more than an IT project: it is the digital foundation for a thorough modernization of the entire enterprise, for moving from “good” to “great.”

Once in the cloud, companies can add advanced data management solutions with little effort. Think of advanced data management as a magic filing cabinet: it automatically stores and organizes all documents, all information, all data automatically in the right place and in perfect order – always up to date, perfectly searchable, without duplicates and errors, smartly annotated, and everything in the right context.

In their combination, integrated cloud applications and advanced data management allow company leaders a holistic view of their enterprise.

At the same time, they enable AI technologies to access, understand, and facilitate transactions across the company – assisting human users with repetitive tasks as well as with deep analyses and insights.

And the next evolution is already at hand: Based on integrated cloud applications and data management, digital coworkers – also known as “AI agents” – are now able to carry out complex work assignments. For example: find overdue invoices, identify what went wrong, resolve the issue, and make sure payment targets are met.

Realizing the tremendous benefits of AI is thus about going on a journey: from on-premise software to cloud applications, then onwards to modern data management and the use of AI agents throughout the enterprise.

It is this journey that unlocks the tremendous potential so many see in AI – and enables us to completely reimagine how our businesses and economies are run.

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Appearing on every talk show and in every headline, the technology has, as McKinsey puts it, seen surging interesting since it burst into mainstream media early 2023.

The technology remains in the media because it is relentlessly proving its value across multiple use cases and industries. As a study commissioned by Microsoft and undertaken by IDC found, AI has ‘demonstrable business value’ across key areas such as ‘employee experiences, customer engagement and internal business processes’.

The statistics are equally profound. AI is anticipated to add $10 trillion to the global gross domestic product by 2034, says the IDC survey, with 71% of respondents already using the tech and most seeing a return on their investment within just 14 months.

Amazon predicts it is going to contribute around 600 billion Euros to the European economy by 2030.

Then there are the statistics in Forbes – 64% of companies expect AI to increase productivity, 60% think it will improve customer relationships – and survey after statistic proving that it is exactly what the business needs to succeed amidst the crowd, noise and economic uncertainty.

The challenge really lies in ensuring that the AI promised by the numbers is the AI the business gets to use.

It’s not a plug and play technology (none are) which means companies need to approach its integration with strategic caution. And the first question should be – what cloud strategy should companies be adopting to ensure their AI adoption is both a success and one that aligns with business objectives?

Value is found in ensuring cloud migration – something many companies are still coming to terms with – is for innovation.

Migrate to innovate. This means weaving AI into the process so, at the end of the long hours of planning, migrating and managing cloud infrastructure, there is AI embedded within the business.

Regardless of an organisation’s size, the end result needs to be one that stands firm under pressure from the business and stakeholders and allows for departments and teams to innovate at scale.

The challenge doesn’t lie in the fact that cloud is perfectly capable of bringing AI into the business, but in choosing the right approaches and products.

Right now, every solution has AI attached to it. Everyone has put AI on the tail end of their offerings and now organisations without much experience in AI or how to apply it, are expected to know which application is the right fit for their purpose. The answer lies in two areas – business objectives and proven value.

Yes, AI can give you value but, as a recent Gartner study found, 49% of participants had difficulty estimating and demonstrating this value. And one of the core reasons behind this difficulty is the lack of a coherent strategy.

Once the business understands that an innovation strategy needs to tie into the business strategy, they will immediately step on the road that will take them to the best possible ROI from their cloud and AI investments.

Once strategy is defined, the next step is to prioritise the type of AI. What solution will fit within your business?

Is it easily adopted? Does it slip seamlessly into the gaps and cracks and empower employees to achieve those promised levels of productivity and customer engagement? Microsoft has got this right on multiple levels.

The Azure framework can be customised to fit, regardless of sector or goals, and it comes with AI woven into the very fabric of its capabilities.

Microsoft Copilot is as effortlessly accessible as a drink from the office watercooler and it allows for companies to step right into the innovation. The learning curve and integration challenges are effectively removed.

Azure is a smart approach to a cloud strategy that makes it easy for companies to adopt AI. It is ultimately putting AI within the heart of the business in ways that are practical and relevant..

Practical AI that puts ROI right on the table is found in smart cloud approaches that prioritise strategy. It is also easy found with a partner that understands Azure, AI, cloud frameworks and how to shape these capabilities to fit your unique business model.

When it comes to medium-sized businesses, the allure of the cloud might be undeniable, but there may be a degree of reluctance to relinquish control over vital data and systems when contemplating the best strategy to move forward.

This is where hybrid cloud can come into play – a bridge between the familiar on-premises environment and the vast possibilities of the cloud.

Medium-sized businesses can selectively migrate certain systems, creating a low-risk testing ground, allowing for a seamless integration of cloud capabilities without the fear of a complete overhaul.

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