Well it's about time - McKinsey report says AI is 'on the road to ROI' at last

McKinsey report into the state of AI finds more businesses are deploying agentic solutions 20% of organizations have been constrained by operating costs but plan to increase investments into AI However some are still concerned about job cuts due to AI replacement More companies are adopting agentic AI solutions, but are also facing difficulties in making the technology pay for itself, according to new research from McKinsey - however, there is good news on the horizon, with reports of an encouraging financial impact attributed to AI use.

Several cost-saving advantages of AI adoption have been found, with almost 33% of respondents saying they had moved away from software procurement in favor of developing in-house solutions with agentic coding tools.

Interestingly, the survey has found that while AI use for organizations at large seems relatively muted, it is boosting the performance of individual employees.

But on the downside, 39% of those who responded expect a decline in the size of their organization’s workforce due to AI.

Reshaping businesses Many organizations have explored AI, with 40% of those surveyed with annual revenues of more than $1 billion are scaling AI agents, an increase on last year’s survey which recorded 27%.

In smaller organizations, just 22% reported scaling, a figure that hasn’t improved notably since the previous survey.

It’s a figure that suggests – unsurprisingly – that the larger organizations are more suited to exploring AI and scaling agentic applications.

This is something that is highlighted in McKinsey’s report.

“Organizations’ conviction in AI is growing faster than the immediate financial returns they can attribute to it,” McKinsey said.

“More expect AI to reshape their business over the next three years than did a year ago, and they continue to plan to invest more.” So, the EBIT (Earnings Before Interest and Taxes) factor, where at least 5% goes into AI, may seem low, and seems pretty flat with just 6% of respondents, but it has not declined, which at this stage is vital.

The downside of agentic AI This survey reveals some significant trends, however, that could be seen as challenging for any business putting their eggs into a basked marked “AI.” A key challenge is proving to be the token cost, with 20% reporting reduced use of AI due to operating costs.

However, while 80% have reported that increases in “individual productivity” and 50% have claimed improved decision making, the use of AI seems to be making the changes that many observers have predicted over recent years.

The survey’s respondents are not optimistic on the impact of AI on the size of their workforce.

39% expect workforce declines caused by AI over the coming 12 months.