Today marks the launch of Panintelligence’s report AI value or vanity? How SaaS companies are approaching innovation, which sheds light on the buzz surrounding artificial intelligence (AI) and how SaaS technology and product leaders are navigating the delicate balance of resource allocation while delivering on innovation promises.
Although AI can positively affect the industry, the report also raises a concern, suggesting that as many as two-thirds of SaaS companies might be using subpar data that could undermine accuracy and introduce bias into AI models.
How Artificial Intelligence (AI) is being adopted in SaaS
Based on research conducted during July and August 2023, the report reveals a significant embrace of Artificial Intelligence among SaaS companies. In fact, 76% of SaaS firms are either actively utilizing or exploring AI as part of their operations. Additionally, 38% have already implemented Generative AI capabilities, indicating a strong enthusiasm for AI integration within the industry.
Interestingly, while machine learning remains the most prevalent AI form, with 43% of SaaS companies using it, the report highlights that 38% have introduced Generative AI features within the past year. Another 15% are in the experimental phase, planning to roll out Generative AI capabilities soon.
Despite the rapid adoption of AI in SaaS throughout 2023, the report emphasizes the importance of focusing on data quality. Notably, only 28% of SaaS companies are actively involved in data quality initiatives crucial for building robust and precise AI models.
2024: Embracing practical AI
The Artificial Intelligence momentum is not set to slow and is predicted to continue into 2024, with more than half (56%) of SaaS companies planning to advance new AI initiatives within the next six months. Research has said:
- 28% of SaaS companies are testing predictive analytics that add data-driven functionality to their core products (nearly twice the number (15%) that have already adopted this form of AI).
- The proportion of companies using deep learning could also double in 2024, with 17% testing this form of AI. 15% of companies have introduced deep learning to products so far.
- Causal AI will also grow in prominence during 2024, driven by a desire to improve the accuracy of AI models and increasing regulatory pressure to show how they work. 6% of SaaS companies are now testing Causal AI for product use and 8% for operational purposes.
As someone deeply involved in the SaaS industry, I find the AI surge in SaaS during 2023 to be quite remarkable. However, I must stress the importance of not overlooking data quality, as it can unintentionally compromise AI model accuracy and lead to regulatory issues and retrospective data cleansing costs.
