The strategic vs. tactical divide with AI

While nearly every business is investing in AI at some level, a small cohort of companies is quietly using AI strategy to generate outsized returns. Consider China’s financial services company Ping An. It didn't just use AI to automate insurance claims—it built five interconnected AI-powered ecosystems for insurance, banking, healthcare, and smart cities. DBS Bank didn't just deploy a chatbot—it created a "joyful banking" experience that fundamentally changed how customers receive financial services. Pharmaceutical giant Sanofi didn't merely add AI to speed up research—it’s using both generative and analytical AI to transform drug discovery itself.

These companies represent less than 15% of organizations investing in AI, yet they're capturing disproportionate value by pursuing what we call strategic returns rather than tactical ones.

This is the approach to AI that Return on AI Institute helps companies put into practice. The Institute helps organizations bridge the gap between AI experimentation and transformative business outcomes through AI literacy programs, implementation coaching, and strategic frameworks. Founded by AI veterans Laks Srinivasan and Tom Davenport, the Institute has guided dozens of C-suite teams through successful AI transformations, enabling organizations to move beyond tactical implementations to AI deployments that drive tangible business outcomes. 

[Don’t miss Davenport and Srinivasan discuss how to maximize AI investments at the Freshworks Virtual Summit on June 12. Reserve your spot today.]

The tactical trap

Most companies are stuck in what we call tactical mode with AI: deploying chatbots or similar tools to handle customer inquiries, using AI to extract data from documents, or automating routine tasks. These incremental improvements feel productive but rarely move the needle on business performance.

Worse, many never progress beyond pilots and deliver little value despite significant investment. A 2022 Deloitte survey of large, global organizations found that the most common objectives pursued with analytical AI were process improvement and better decision-making, worthy goals but normally tactical.

The numbers are sobering. Recent research shows that only 1% of companies have mature AI implementations, and just 21% have redesigned workflows to leverage AI effectively. The majority are treating AI like a productivity tool rather than a strategic weapon.

The strategic mindset 

Strategic companies take a different approach with AI. They don't ask, "How can AI make this process 10% faster?" Instead, they ask, "How can AI enable an entirely new way of creating value?"

Morgan Stanley embraced this approach. Rather than simply automating tasks, it built systems that open access to institutional knowledge across their organization. Their AI doesn't just process information—it changes how financial advisors serve clients. Now they're deploying AI agents that can actually execute transactions, not just serve up recommendations.

The payoffs are substantial. According to an MIT Sloan Management Review/BCG study, companies using AI strategically are 2.7 times more likely to gain competitive advantage and three times more likely to enter new markets successfully. They're not optimizing existing operations—they're creating entirely new business models.

Organizational, not technological, challenge

The leap from tactical to strategic AI isn't really about technology at all—it's about organizational transformation. Strategic AI requires senior leadership to understand what's possible and commit resources accordingly. It demands changes to business processes, employee training, and often entire operating models.

These strategic implementations cost more and take longer, but they also create defensible competitive advantages. When tactical AI automates a process, competitors can easily replicate it. When strategic AI enables a new business model, it's far harder to copy.

The divide between tactical and strategic AI adopters is widening. While most companies dabble with incremental productivity gains, strategic leaders are capturing transformative value that compounds over time. The companies reshaping industries today made deliberate choices to use AI as an engine for business model innovation.

Consider the implications: If your organization continues pursuing only tactical AI while competitors achieve strategic breakthroughs, you're not just maintaining the status quo—you're falling behind in an increasingly AI-driven economy.

Learn more at the pair’s session during the Freshworks Virtual Summit: Maximizing ROI of AI: A guide to delivering rapid impact.