RESEARCH REPORT

DATA AND
ARTIFICIAL
INTELLIGENCE
Lessons from 2020, Implications for 2021
December 2020

BY SUSAN ETLINGER
EXECUTIVE
SUMMARY
One of the many things we will remember about 2020 is how
completely it upended our beliefs about the way we work and use
technology. In the space of a few days, organizations all over the
world moved to a distributed work environment. In the space of a
few months, companies and industries made more progress toward
digital transformation than they had in years.

In this report, we examine how the COVID-19 pandemic affected

the use of data and intelligent technologies. We looked at the
increasingly strategic use of data science and artificial intelligence in
organizations and how it is accelerating as a result of incremental and
disruptive change. Finally, we reviewed how organizations are using
conversational technologies — not only as a productivity tool, but as
a way to connect previously disconnected parts of the organization.

While 2020 was a challenging year in most respects, it also provided

a rare opportunity for organizations to align both on the value and the
challenges of intelligent technology — a move that will become even
more critical in an increasingly digital and distributed world.

1
TABLE OF CONTENTS
Executive Summary 1

Key Findings 3
Impact of COVID-19 on Data and AI Strategy 4
Ability to Source and Use Customer Data 5
Organizational Support for Data Science 6
Role of AI in Business Strategy 7
Scaling AI Across the Organization 8
Implementation of Responsible AI & Data Practices 9
Customer Use of Conversational Technologies 11
Use Cases for Digital Assistants 12
Business Strategy for Digital Assistants 13
Brand Strategy for Digital Assistants 14
Implications for Action 15
Appendix 16

Endnotes 16
Methodology 16
Open Research 16
Permissions 16
Disclaimer 16
About Us 17

About Susan Etlinger, Senior Analyst 17

About Altimeter, a Prophet company 17
How to Work With Us 18
KEY FINDINGS
2020 was in some ways both an accelerator and an inhibitor of AI and data maturity. While
organizations found themselves relying more on data to help them navigate an unprecedented
set of circumstances, we also saw the brittleness of machine learning algorithms unable to
account for sudden shifts in consumer and business buying behavior. A May 2020 article in the
MIT Technology Review, “Our Weird Behavior During the Pandemic Is Messing With AI Models,”
showed how the changes in a single week at the end of February threw machine learning
models, supply chains, and other business systems into disarray. That said, the fact that 2020
exposed business vulnerabilities may bode well for leaders intent on using data and intelligent
technologies to build more sustainable and resilient digital organizations.

1. The COVID-19 pandemic accelerated data use and data strategy. 4. AI is becoming table stakes but without the scale needed for
The rapid shift to the cloud demonstrated that people and real transformation. We are still in a relatively early stage of AI
organizations can adapt to new ways of working and that cloud maturity. While the vast majority of organizations use AI in some
computing is now essential for business continuity. capacity, most use cases are departmental, not scaled across
the organization. This may shift more rapidly as organizations
2. Larger companies still have the advantage when it comes to data
continue to seek ways to identify new sources of productivity,
science. The leaders tend to be B2B2C organizations, underlining
insight, and resilience, but cost containment is likely to be a
the importance of line-of-sight from consumers to customers to
barrier for some time to come.
company. At the same time, advances in platform products will
make similar capabilities available to a much larger spectrum of 5. Conversational technologies are now mainstream, but their
organizations over time. real potential is yet to be realized. Customer service remains
the most common use case for digital assistants, owing to their
3. Data and AI are becoming critical enablers of business strategy,
ability to deflect more expensive person-to-person interactions
possibly accelerated by the COVID-19 pandemic. If one of the
to a digital and automated channel, but that is by no means their
primary goals of digital transformation is to enable business
only value. The nature of conversational interactions provides
transformation, the ability of the organization to sense, learn,
unprecedented insight into the literal “voice of the customer”
and act is critical, especially in times of economic, business, and
— a capability that continues to develop rapidly.
market disruption.

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THE COVID-19
PANDEMIC FIG 1: Impact of COVID-19 on Data and AI Strategy

ACCELERATED To what extent are you relying on data and intelligent technologies as a source of
insight during the COVID-19 pandemic?

DATA USE
AND DATA
STRATEGY
The rapid shift to the cloud demonstrated
that people and organizations can adapt 41%
to new ways of working and that cloud
computing is now essential for business
continuity. The majority of companies
(66%) are leveraging data and intelligent
technologies for insight now more than

25% 25%
they were before the COVID-19 pandemic.
As most customer interactions have shifted
online, insights about customer needs,
behaviors, and preferences are now more
generally available from digital sources,

7%
enabling insights into the organization
(productivity, employee engagement,
and sentiment), as well as customers and
consumers (behavior, sentiment, trends).
2%
A lot more A little more About the same A little less Much less

SOURCE: Altimeter Digital Transformation, base = 628

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CUSTOMER DATA USE IS BECOMING MORE
STRATEGIC, BUT SILOS REMAIN
More than a third of companies (36%) reported that they were able Industries such as banking/finance (40%) and consumer products
to provide clean data to all parts of the organization, while a further (36%) were the only verticals where the majority of respondents
28% said they are proactive in leveraging this widespread access to applied accessible data to discover and evaluate business
strategically discover and address business opportunities and risks. opportunities and risks — an advantage in areas such as innovation,
customer experience, marketing, and sales.

FIG 2: Ability to Source and Use Customer Data

Which of the following statements best describes how your company is able to use
customer data?

36%
28% 26%
9%
2%
We have access to clean, We have ready access to clean, We have access to clean, We do not have ready access We do not have ready access
labeled data, it is available labeled data, and it is available labeled data for our own use to clean, labeled data, but to clean, labeled data.
across the business and across the business. cases, but access is siloed. we have a plan in place to
we use it strategically to address this.
discover and address business
opportunities and risks. SOURCE: Altimeter Digital Transformation, base = 628
5
DATA SCIENCE IS BECOMING A CORE COMPETENCY,
MAINLY FOR LARGER COMPANIES
While nearly half of respondents said that data science is, or is In addition, company size is correlated with data science maturity:
becoming, a core competency in their organizations (49%), the The largest companies (50K–100K and 100K+) are more likely
leaders in data science tend to be B2B2C organizations at (64%), to report that they are deriving ongoing value from data in their
compared to B2B (51%), B2G (50%), and B2C (43%). The greater focus organizations, presumably because they are able to afford to attract
on data science capacity among B2B2C companies underlines the top data science talent from leading universities. This may rebalance
importance of line-of-sight from consumers to customers to company; over time as data science becomes more integrated into data and AI
without that level of clarity, businesses struggle to understand the platforms and therefore more readily available and evenly distributed.
cause-and-effect or even correlated relationships between consumer
behavior, customer needs, and business objectives.

FIG 3: Organizational Support for Data Science

To what extent do you have clean and accessible data, clear processes, and organizational
support for data science in your organization?

30% 30%

19% 20%
2%
Organization is deriving Data strategy is becoming We have data science Data is siloed and not in We do not have organizational
continuous and compounding a core competency in some leadership and are moving accessible, useful form. capacity for data science,
value from data. groups, but is not yet scaled from descriptive to Analytics are largely descriptive nor do we have a plan to
across the organization. predictive analytics. and retrospective. develop within.
SOURCE: Altimeter Digital Transformation, base = 628
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MORE THAN
HALF OF COMPANIES FIG 4: Role of AI in Business Strategy

VIEW AI AS KEY TO To what extent do you use artificial intelligence to

support business strategy?

BUSINESS STRATEGY
18%
AI is part of the fabric
While clean data is foundational to AI and digital of the company and is
delivering across the
transformation overall, the cluster of technologies we think business.
of as AI (defined for the purposes of this report as machine
learning, computer vision, language technologies, robotics,
and deep learning) activates it in ways that were unthinkable
34%
AI is becoming a critical
just a few years ago. As organizational capacity for data enabler of business
strategy, and leadership
improves over time, it stands to reason that we would begin sees AI as integral to
to see more AI experimentation, applications, and success digital transformation.

stories emerge.
We use discrete proofs
AI adoption and digital transformation are closely linked. If
25%
of concept that focus
on cost reduction,
one of the primary goals of digital transformation is to enable productivity improvement,
business transformation, the ability of the organization and/or Robotic Process
Automation (RPA).
to sense, learn, and act is critical, especially in times of
economic, business, and market disruption. It is therefore

19%
heartening to see that while experimentation continues at We are exploring AI, but
objectives are undefined
most companies, 52% report that AI is becoming integral to and no resource or budget
digital transformation. has yet been allocated.

B2B2C organizations lead in their use of AI, with 66%

4%
reporting that it is, or it is becoming, a critical enabler of
business strategy compared to B2B (51%), B2G (50%), and We are not using AI, nor
do we plan to do so within
B2C (42%) organizations. the next 12 months.

SOURCE: Altimeter Digital Transformation, base = 628

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AI IS TABLE
STAKES, BUT FIG 5: Scaling AI Across the Organization

SCALING IT IS To what extent do you use artificial intelligence within your organization?

STILL A WORK
IN PROGRESS Every department is using AI to improve
processes and efficiency and deliver a high
21%
quality customer experience, new products, or
new business models.
Even with the advancements over the past
several years, we are still in a relatively early

22%
stage of AI maturity. As a result, it’s notable
Almost every department is currently using or
that 92% of organizations use AI in some testing AI in some capacity.
capacity and, to be expected, most use
cases are departmental, not scaled across
the organization. As we’ve seen elsewhere,

25%
B2B2C and B2B companies tend to be
We have used AI regularly to improve
further ahead with regard to enterprise processes and efficiency in one department for
adoption (29% and 26%, respectively, several years.

compared to B2G (22%) and B2C (11%).

We are testing the use of AI to automate

functions in a singe department, such as
customer service or accounting.
25%

We do not use artificial intelligence at all. 8%

SOURCE: Altimeter Digital Transformation, base = 628

8
SOME COMPANIES ARE
BEGINNING TO BUILD
ORGANIZATIONAL CAPACITY
FOR RESPONSIBLE USE OF AI

While digital governance is still nascent, there is a growing Across geographies, Southeast Asia tends to lead on AI governance
realization, especially among B2B organizations, that data (35%), compared with Europe (20%), North America (19%), and
governance is essential to securing customer trust, protecting China (13%). Admittedly, this has much to do with government
brand, and fueling growth in our increasingly distributed world. structures, technology adoption trends, and cultural norms, but
it is important under any circumstances to acknowledge that any
To date, the majority of news stories on the responsible use of AI
function powered by automated intelligence will require oversight
have focused not on global business, but on the large social media
and a set of culturally appropriate policies and processes to ensure
platform companies, such as Facebook, Amazon, and Google. But
that it is fit for purpose.
global businesses, exemplified by large technology platforms such
as Microsoft and Salesforce, have begun to look at responsible In December 2020, Timnit Gebru, renowned AI ethics researcher
technology use as a business imperative for which they need to at Google and co-founder of Black in AI, reported that she had
build organizational capacity. been fired from Google over a dispute about an academic paper
she had co-authored. The paper, which has not yet been released,
Generally, organizations begin with a set of ethical principles from
reportedly warned about risks inherent in large language models,
which to work. The next step is to define, implement, and track
according to a Bloomberg News story.
processes and practices, such as impact assessments, disclosures,
and methodologies to reduce bias and increase transparency, and Gebru’s departure from Google (the company contends that she
relevant updates to service agreements. resigned) and the immediate and broad condemnation from the
responsible AI community, illustrate the scope of the organizational
While most organizations report that they have developed and
commitment required to develop responsible AI products and
begun to roll out ethics principles and processes for AI, B2B2C
services, as well as the importance of protections for the people
organizations lead; 37% report implementing responsible AI
tasked with identifying potential harms.
processes and practices across the business, compared to 23% of
B2B organizations.

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FIG 6: Implementation of Responsible AI & Data Practices
To what extent have you implemented policies, practices and processes to promote
responsible use of AI within your organization?

24%
We have integrated ethical principles into our
existing corporate policies and processes such
as contracts, product development and data
use across the organization.

We have begun to incorporate ethical principles

into our existing corporate policies. 32%

We have rolled out ethical principles for use of

intelligent technologies across the business,
and we are learning from these practices.
25%

We have not yet developed any policies,

processes or practices specific to AI, but we
have a plan in place to do so.
14%

We have not developed any policies, processes

or practices specific to AI, other than what is
currently required by law.
6%

SOURCE: Altimeter Digital Transformation, base = 628

10
CONVERSATIONAL TECHNOLOGIES HAVE
OFFICIALLY GONE MAINSTREAM
Conversational technologies (digital assistants, chatbots, and is most interesting right now, who are experimenting not only with the
voice agents) have come a long way since the first chatbots hit the customer-facing aspects of the technology, but with its potential to
market around 2016. This is due to a combination of technology enrich and add context to other data sources.
advancements in the area of natural language, broader use cases, and
From an industry perspective, the banking and finance industry is
an emerging understanding that conversational technologies enable
the most advanced in terms of conversational technology use across
companies to hear and learn from the literal voice of the customer.
the business — just surpassing the technology industry at 49%. Retail
In this market, as in many others, the proof is in the use case. Seventy- (42%) and healthcare (33%) lag their industry peers, likely owing to
five percent of companies surveyed reported that they are using lower investment and data access challenges, respectively.
conversational technologies to some extent, but it is the long tail that

FIG 7: Customer Use of Conversational Technologies

To what extent has your company implemented conversational technologies as a customer
and/or consumer touchpoint?

33%
28%
19% 5%
14%
We are using conversational We are using conversational We have introduced We are planning to implement We have not implemented
technologies across the technologies across the conversational technologies conversational technologies, but any conversational
business and use the insights business and consider them to for some use cases, and have not currently implemented technologies at all.
we glean to optimize the be a strategic tool in our digital are currently using them them in our customer
customer experience. transformation toolkit. to optimize our customer experience.
experience in specific areas. SOURCE: Altimeter Digital Transformation, base = 628
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CUSTOMER SERVICE
REMAINS THE FIG 8: Use Cases for Digital Assistants

MOST POPULAR What are the use cases for digital assistants at your company?

USE CASE FOR 58%

DIGITAL ASSISTANTS
Customer
Service

Sales and
Marketing
48%
Customer service remains the most common use case
for digital assistants, owing to their ability to deflect more
Employee
Productivity
47%
expensive person-to-person interactions to a digital and
automated channel, but that is by no means their only value.
While 58% of respondents use digital assistants for customer
Commerce 45%
service, almost half of respondents said that they also use them
for sales and marketing (48%), employee productivity (47%), Business
Operations
36%
and commerce (45%).

One of the most interesting new applications for digital Recruiting 35%
assistants is recruiting; 35% of respondents included it as a
current use case. Smart homes and environments are also ones
to watch, as conversational technologies become embedded in Personal Finance 32%
more devices around the home and elsewhere.

Health 30%

Transportation 23%

Smart Home 23%

SOURCE: Altimeter Digital Transformation, base = 628

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USE OF DIGITAL
ASSISTANTS IS STILL FIG 9: Business Strategy for Digital Assistants

EXPERIMENTAL, BUT To what extent have you articulated clear business objectives for
your digital assistant?

SOME INDUSTRIES USE

THEM STRATEGICALLY Digital assistants are core
to digital transformation
19%
and a core competitive
differentiator.
One of the greatest assets of any AI-enabled project can
also be its greatest challenge: the desire and capacity
There is a clear

37%
to experiment, test, and learn. For example, while digital understanding of the
assistants are widely used, only 56% of companies report potential for digital
assistants, and we are
that they clearly understand their potential. This isn’t actively exploring use
necessarily a bad thing, since part of the desired outcome is cases and POCs.
learning, which can take time — especially across a large and

26%
complex business. Digital assistants are seen
as a “nice-to-have”, with
The challenge creeps in when companies get stuck in discrete teams exploring
possible use cases.
perpetual beta tests (aka “analysis paralysis”) and fail to
scale the technology, which then can undermine an attempt
to monetize it or understand its greater potential. This can There is little-to-no

15%
organizational support
become a vicious cycle; when permanent beta is the norm, for or interest in digital
it’s unrealistic to expect massive growth. Most often, a assistants as an enabler of
business value or digital
compelling business case plus early success are enough to transformation, but we are
propel the technology into wider use; industries that report working on connecting them.

using digital assistants most strategically are banking/finance

(67%) and retail (61%), followed by technology (54%) and
healthcare (50%).
We have not yet
articulated objectives for
our digital assistant.
3%

SOURCE: Altimeter Digital Transformation, base = 628

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FEW COMPANIES HAVE INTEGRATED
DIGITAL ASSISTANTS WITH BRAND
Another critical success factor for conversational technology is Generally speaking, companies understand the value of aligning their
how it aligns with the brand, both from a functional and expressive digital assistants — whatever form they take — with brand strategy.
perspective. It’s important that any customer-facing technology While only 18% of companies have fully aligned their digital assistants
feel consistent with the brand for a range of reasons: credibility, with brand, the majority of companies plan to do so. Again, banking
marketing, and security, as poorly designed digital assistants or and finance leads, with 31% reporting that they have fully aligned
chatbots may not be taken seriously. But the most important reason their digital assistants with their brand. Only 19% of companies in
is that while digital assistants or chatbots may internally be viewed retail and technology and a mere 4% of companies in healthcare
as experiments, customers and consumers experience them as reported having done so.
products, with all the expectations that products entail.

FIG 10: Brand Strategy for Digital Assistants

To what extent have you considered the relationship of the digital assistant to the master
brand and other relevant product and service lines?

36%
25%
18% 20%
2%
The conversational The creative brief is executed The creative brief is developed The creative brief is developed Not at all; they are entirely
brand is aligned with the but not yet scaled across all but not yet executed. but not yet executed. separate and there are no
master brand across all relevant product/service lines. plans to align them.
relevant product and
service lines.
SOURCE: Altimeter Digital Transformation, base = 628
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IMPLICATIONS
FOR ACTION
One of the hallmarks of 2020 will be the way it accelerated digital
transformation across industries. The sudden and prolonged shift to
distributed work and the adoption of cloud computing meant that
people and industries that initially resisted digital transformation
found themselves converts in the space of a few short days or weeks.
“We made more progress on digital transformation in the past five
months than we did in the past five years” was a common refrain.

But adapting in a crisis is not the same thing as organizational

resilience. To be truly resilient and foster growth for the long term
requires not only will, but the infrastructure needed to perform
at scale. Intelligent technologies can show promising results in
controlled trials, but used across the business, drawing from multiple
data streams and types, they can be truly transformative.

To do that requires breaking data siloes and establishing data

and AI competency across the organization. It requires a clear
understanding of the capabilities and constraints of these
technologies, the use cases that best utilize them, and the willingness
to adopt agile methodologies that enable the organization to test
and learn. It requires digital governance structures and processes
that focus on more on human than public relations impact. Most
importantly, however, it requires a concerted effort to view these
technologies not as an end in themselves, but as a tool to support
both human potential and business value.

15
 ENDNOTES Heaven, Will Douglas. “Our Weird Behavior During the Pandemic Is Messing With AI Models.”
1

MIT Technology Review. May 11, 2020 (https://www.technologyreview.com/2020/05/11/1001563/

covid-pandemic-broken-ai-machine-learning-amazon-retail-fraud-humans-in-the-loop/).
2
For more about how enterprise-class companies are implementing responsible AI, see
“Innovation + Trust: The Foundation of Responsible Artificial Intelligence”. https://www.prophet.
com/download/innovation-trust-artificial-intelligence/

METHODOLOGY This report is based on data from our research report, “The 2020 State of Digital Transformation”.
We surveyed 628 professionals from brands, consulting firms, and other organizations with
at least 1,000 employees, across four geographies: North America (U.S. and Canada); Europe
(U.K., France, and Germany); The People’s Republic of China; and Southeast Asia (Indonesia,
Singapore, and Vietnam). The respondents from these organizations included in-house and
agency digital strategists and C-suite or other executive-stage leaders. Our sample includes a
fixed quota of respondents from five industry verticals: Banking/Finance, Consumer Products,
Healthcare, Retail, and Technology. We asked each respondent multiple choice answer questions
about digital transformation at their respective organizations or organizations they serve. Digital
maturity was scored across 26 criteria in five areas. More details about the criteria are available in
the online version of the report here.

OPEN RESEARCH This independent research report was 100 percent funded by Altimeter, a Prophet Company.
This report is published under the principle of Open Research and is intended to advance the
industry at no cost. This report is intended for you to read, utilize, and share with others; if you
do so, please provide attribution to Altimeter, a Prophet Company.

PERMISSIONS The Creative Commons License is Attribution-Noncommercial ShareAlike 3.0 United States,
which can be found at https://creativecommons.org/licenses/by-nc-sa/3.0/us/.

DISCLAIMER ALTHOUGH THE INFORMATION AND DATA USED IN THIS REPORT HAVE BEEN PRODUCED AND PROCESSED
FROM SOURCES BELIEVED TO BE RELIABLE, NO WARRANTY EXPRESSED OR IMPLIED IS MADE REGARDING THE
COMPLETENESS, ACCURACY, ADEQUACY, OR USE OF THE INFORMATION. THE AUTHORS AND CONTRIBUTORS
OF THE INFORMATION AND DATA SHALL HAVE NO LIABILITY FOR ERRORS OR OMISSIONS CONTAINED HEREIN
OR FOR INTERPRETATIONS THEREOF. REFERENCE HEREIN TO ANY SPECIFIC PRODUCT OR VENDOR BY TRADE
NAME, TRADEMARK, OR OTHERWISE DOES NOT CONSTITUTE OR IMPLY ITS ENDORSEMENT, RECOMMENDATION,
OR FAVORING BY THE AUTHORS OR CONTRIBUTORS AND SHALL NOT BE USED FOR ADVERTISING OR PRODUCT
ENDORSEMENT PURPOSES. THE OPINIONS EXPRESSED HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE

16
ABOUT THE AUTHOR

SUSAN ETLINGER, SENIOR ANALYST

Susan Etlinger is a globally recognized expert in digital strategy, with a focus on artificial intelligence,
technology ethics, and data. In addition to her work at Altimeter, Susan is a senior fellow at the Centre
for International Governance Innovation, an independent, non-partisan think tank based in Canada, and a
member of the United States Department of State Speaker Program. She works with clients to assess the
impact of AI and other advanced technologies on business and to identify use cases, opportunities, risks,
and organizational and cultural considerations. She also works with technology vendors to refine product
roadmaps and strategies based on her independent research.

In 2020, Susan was named one of 100 Brilliant Women in AI Ethics by Lighthouse3, a strategic research
consultancy focused on AI. Her TED talk, “What Do We Do With All This Big Data?” has been translated into
25 languages and has been viewed more than 1.3 million times. Her research is used in university curricula
around the world, and she has been quoted in numerous media outlets, including The Wall Street Journal,
The Atlantic, The New York Times, and BBC. Susan holds a bachelor’s degree in rhetoric from the
University of California at Berkeley.

ABOUT ALTIMETER, Altimeter is a research and consulting firm

owned by Prophet that helps companies
Altimeter, a Prophet Company
One Bush Street, 7th Floor
A PROPHET understand and act on technology disruption. San Francisco, CA 94104

COMPANY We give business leaders the insight and

confidence to help their companies thrive in
info@altimetergroup.com
www.altimetergroup.com
the face of disruption. In addition to publishing @altimetergroup
research, Altimeter analysts speak and provide 415-363-0004
strategy consulting on trends in leadership,
digital transformation, social business, data
disruption, and content marketing strategy.

Learn more at altimetergroup.com.

17
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