AI Adoption Soars in India as 96% of Firms focus Gen AI: SAP Study

A recent study by SAP reveals that a staggering 96% of midmarket businesses in India are prioritizing generative artificial intelligence (Gen AI), outpacing their global counterparts where the figure stands at 91%. This insight was shared at SAP Now, the company's flagship customer event in Delhi on September 13, 2024. The research, which surveyed over 12,000 businesses worldwide including 800 from India, highlights the rapid adoption of AI among Indian businesses, reflecting their ambition to stay competitive in a digital-first world.

The Growing Focus on Generative AI

Midmarket businesses in India—defined as organizations with 250 to 1,500 employees—are increasingly recognizing the transformative potential of Gen AI. The SAP study found that 96% of these businesses are focusing on Gen AI as either a moderate or strong priority. This figure is higher than the global average of 91%, underscoring India's commitment to leveraging AI for business growth and innovation.

According to the survey, adopting Gen AI (66%) is a top priority for Indian midmarket businesses in 2024, second only to preparing for cybersecurity threats (67%). It is also ahead of initiatives to make business operations more environmentally sustainable (65%). This prioritization reflects a broader strategy to integrate AI into core business processes to drive efficiency, agility, and real-time decision-making.

Leveraging AI for Business Transformation

The study also shows that Indian midmarket businesses are prioritizing AI to transform several key areas of operations. Over half of the surveyed businesses place a high priority on AI for enhancing privacy and security (55%) and improving decision-making capabilities (52%). These priorities are higher than those seen in other regions, where the corresponding figures are 50% and 49%, respectively.

Indian companies are also using AI to improve training and skills development (51%), enhance customer experience (50%), and optimize supply chains and logistics (50%). Businesses like PGP Glass and Suzlon Energy are among the early adopters that have embarked on this transformative journey, utilizing AI to gain a competitive edge in their respective industries.

Accelerated AI Implementation in Indian Midmarket

Indian businesses are not just prioritizing AI—they are actively implementing it faster than their global peers. The SAP study indicates that 49% of Indian respondents are using AI for forecasting and budgeting to a strong degree, compared to 40% globally. Similarly, 48% of Indian companies are deploying AI to develop marketing and sales content, compared to 41% in the rest of the world.

Other significant uses of AI among Indian midmarket businesses include gathering market intelligence (47%), monitoring regulatory compliance (47%), and cybersecurity threat detection (46%). These applications demonstrate how Indian businesses are leveraging AI to drive operational efficiencies and strategic decision-making.

Talent as the Biggest Challenge in AI Adoption

Despite the rapid adoption and integration of AI, Indian midmarket businesses face challenges, particularly in acquiring and retaining talent with AI skills. The study identifies this as the biggest risk, with 39% of respondents citing it as a major concern. Data-related issues also pose significant risks, including a lack of transparency behind AI results (36%), acting upon incorrect information (36%), and insufficient data size and quality for AI models (33%).

Manish Prasad, President, and Managing Director of SAP Indian Subcontinent, said, “India’s midmarket businesses are the backbone of the nation’s economy. AI is a game-changer for these companies, offering agility, and actionable insights, and helping them thrive in a digital economy. Working with a technology partner like SAP is critical because AI is already built into our applications, which power the most critical business processes. Only then can Indian businesses of every size make the promise of Business AI a reality.”  

Rajeev Singh, Vice President and Head of Midmarket, SAP Indian Subcontinent, further added, “AI can empower organizations with intelligent insights, automation, and tools, allowing them to compete on a global scale. Today, more than 27,000 customers globally are already using SAP Business AI, recognizing the impact on enhancing operations and enabling real-time decision-making. For example, Indian customers like PGP Glass, Suzlon Energy, and many more have already embraced the transformative potential of AI in their businesses.”

Conclusion

The SAP study highlights how Indian midmarket businesses are leading the charge in adopting and prioritizing Gen AI compared to their global counterparts. By leveraging AI to enhance decision-making, optimize operations, and drive growth, these companies are positioning themselves for success in the digital economy. However, addressing the challenges related to AI talent and data quality will be crucial for sustaining this momentum and realizing the full potential of AI-driven transformation. As more businesses embark on this journey, partnering with technology providers like SAP, which offers integrated AI solutions, will be key to navigating the complexities of AI adoption and achieving long-term success.

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