AI in Action: Bridging the Gap Between High Performers and the Rest

[00:00:02] It's Tuesday, January 14th, 2025 and I'm Dave Sovel. Three things to know today. AI in Action from faster ROI to denied claims and chatbot growing pains. Regulations everywhere, AI chips, data centers and why IT pros should brace themselves. And Microsoft's moves, higher prices, forced installs and pass keys. Love it or leave it. This is the Business of Tech.

[00:00:31] In a recent study by researchers from MIT and McKinsey, over 100 companies were surveyed about their use of artificial intelligence in operations. The findings revealed a widening gap between high-performing firms and their counterparts, with top companies seeing a significantly shorter payback period for their AI investments. The study highlighted four key factors that distinguish these leading companies. Strong executive sponsorship, Ford, and the company's

[00:01:00] core AI. A shift in partnerships from academia and startups to a more developed network of consultants and industry partners. Enhanced collaboration across departments. And a greater likelihood of effectively recording and managing relevant equipment data. I also know that listeners like use cases. In a development for the healthcare industry, Waystar has launched Waystar

[00:01:24] Waystar'd Altitude AI, an innovative solution designed to assist physicians in generating appeal letters for denied claims. The new technology aims to recover a substantial portion of the billions of dollars lost annually due to claim denials. The U.S. healthcare system reportedly loses $350 billion each year to administrative waste, with approximately $20 billion spent by hospitals and health systems on over

[00:01:54] returning denied claims. Over half of the years. Over half of denied claims are ultimately overturned, yet the appeal process remains labor-intensive and prone to errors. A recent survey from Freshworks revealed that only two in five customer service agents find AI bots invaluable for their workload. Despite a strong desire to delegate tasks to AI, four in five teams reporting wanting to automate responsibilities such as managing online self-service portals and monitoring

[00:02:24] customer interactions for quality assurance. However, the survey indicates that customer service teams are the least comfortable with AI compared to other departments, with two in five lacking an official AI usage policy. To bridge this gap, experts suggest that leaders should introduce AI as a collaborative tool to enhance career opportunities, emphasizing hands-on experiences and real-world examples where AI assists agents rather than replacing them. The Freshworks survey also highlights that

[00:02:53] nearly half of the respondents are open to transitioning to AI-focused roles with significant interest in leveraging AI for career advancement. Why do we care? These stories reinforce a central theme. AI is no longer a buzzword, but a strategic differentiator. However, success hinges on thoughtful implementation, addressing real-world problems, and navigating organizational and cultural barriers. Customer service teams are along the least comfortable with AI indicating a cultural gap.

[00:03:23] Providers offering AI solutions should focus on change management, user training, and demonstrating AI as a collaborative tool. The lack of AI usage policies presents an opening for IT providers to offer consulting services around governance frameworks, ensuring ethical and efficient use of AI in customer service.

[00:03:43] Many small and mid-sized organizations lack the budget or expertise to implement the four success factors. Providers must develop scaled-down, affordable solutions or risk leaving the segment behind, widening the digital divide.

[00:03:57] While shifting toward industry consultants and partners can improve outcomes, the approach risks dependency on external expertise rather than building internal AI maturity within organizations. Providers must help clients strike a balance by enabling internal upskilling too, and those that do will provide lasting value.

[00:04:19] Today's episode is supported by Huntress. You want to focus on your clients and are always looking for ways to get more time.

[00:04:56] Use Huntress' And you get that with Huntress. Secure your clients and help them thrive with the number one rated EDR for S&Bs on G2. Visit Huntress.com slash MSP Radio to find out more. Lots of regulation news, too. The U.S. Department of Commerce has announced new export controls on advanced computing chips used for artificial intelligence.

[00:05:20] While certain allied countries and universities will be exempt, the regulations aim to protect national security by preventing foreign adversaries from accessing top-tier AI technology. The Secretary of Commerce emphasized that these measures are designed to foster a trusted technological ecosystem globally. However, NVIDIA, a major U.S. chip maker, criticized the rules as excessive, and they've expressed support for the incoming Trump administration while criticizing the new artificial intelligence regulations proposed.

[00:05:50] The regulations significantly impact NVIDIA, which holds an estimated 90% share of the AI chip market. The Biden administration's rules are designed to prevent countries like China and Russia from accessing U.S. AI technology, citing national security risks associated with the systems. NVIDIA argues that these new restrictions could stifle global innovation and economic growth, reversing progress made during the previous Trump administration.

[00:06:17] President Biden signed an executive order aimed at accelerating the construction of AI data centers across the U.S. This directive instructs the Department of Defense and the Department of Energy to lease federal sites to private companies developing large-scale AI data centers and clean energy facilities.

[00:06:35] The order also prioritizes fast-tracking the permitting process for AI infrastructure, which has raised concerns among environmental and consumer advocacy groups regarding potential increases in pollution and energy costs. According to the Lawrence Berkeley National Laboratory, electricity demand from data centers has tripled over the past decade and is projected to double or triple again by 2028, consuming up to 12% of U.S. electricity.

[00:07:04] The government will require companies building these facilities to cover all associated costs and ensure that the electricity used comes from clean sources. The U.S. Department of Health and Human Services has proposed significant changes to the HIPAA security rule aiming to strengthen cybersecurity measures within healthcare organizations.

[00:07:25] The new rule, which is open for public comment until March 7th, mandates that all healthcare providers, health plans, and their associates implement strict cybersecurity practices, including conducting thorough risk analysis and maintaining comprehensive asset inventories. Notably, the proposed changes eliminate the previous addressable requirements, making all cybersecurity measures mandatory.

[00:07:51] Organizations will also need to conduct compliance audits every year and ensure that all business associates verify their adherence to the cybersecurity standards. This overhaul comes after a prolonged period since the last update in 2013, reflecting the growing need for robust cybersecurity in the face of increased cyber threats.

[00:08:12] The final rule is expected to be published following the review of public comments with a six-month grace period for organizations to comply before enforcement begins. Why do we care? Each policy represents a potential disruptor or enabler for the IT sector, depending on how companies adapt. The biggest risk lies in underestimating the operational and compliance implications of the regulations.

[00:08:40] At the current time, I do not believe most firms listening to this show need to worry about the AI chip export rules, just be aware of them. Those who do need to worry, know they are. On the other hand, the HIPAA rule changes are notable. For IT service providers caring to healthcare, the mandatory nature of the cybersecurity rules creates a surge in demand for compliance services, such as risk analysis, asset inventory management, and those ongoing audits.

[00:09:07] And the short timeframe for implementing changes could overwhelm healthcare IT providers and their clients, leading to rushed implementations that increase the risk of errors. Or it all could be an opportunity. Microsoft has a ton of news. Microsoft announced that it will force install the new Outlook email client on Windows 10 devices starting February 11, 2025, coinciding with the next security update.

[00:09:36] This change will affect users of Microsoft 365 apps, who can expect the new Outlook to be installed alongside the classic version. Microsoft emphasizes that the new app will not alter existing configurations or defaults, and while there is no option to block the installation, users can remove it afterward. To uninstall the new Outlook, users can execute a specific command in Windows PowerShell.

[00:10:01] This initiative follows the introduction of the first preview version in May 2022, with general availability for personal accounts starting in September 2023. Microsoft is testing significant price increases for its Microsoft 365 subscription service in six Asian nations, including Australia, New Zealand, and Singapore.

[00:10:22] Users have been notified via email that the cost of an annual Microsoft 365 family subscription will rise from AU$139 to AU$179, marking an increase of nearly 29%. Also, the M365 personal subscription will jump from AU$109 to AU$159, representing an increase of almost 46%.

[00:10:46] A Microsoft spokesperson stated that these price adjustments, such as advanced security features and creative tools, reflected the added benefits over the past 12 years. The company has not confirmed whether these price hikes will be implemented in other regions or affect corporate licenses. Customer reactions have been largely negative, with many accusing Microsoft of price gouging, especially in Australia where the cost of living is already high.

[00:11:12] Microsoft announced a rollback of its Bing image creator model following ride-spread user complaints about the quality of generated images. The new model, based on OpenAI's DALI 3, promised faster and higher quality image creation, but failed to meet expectations, leading to dissatisfaction on platforms like Reddit. Users noted that the new version produced less realistic images and lacked detail, with some describing it as weirdly cartoonish and lifeless.

[00:11:40] In response to the backlash, Microsoft plans to revert to the previous model, DALI 3, to address these issues. The transition process is expected to take two to three weeks to complete. And Microsoft is pushing for wider adoption of passkeys, revealing a 10% decrease in password usage and a staggering 987% increase in passkey usage due to changes in user experience.

[00:12:07] The company has not disclosed the total number of passkey users, but anticipates that hundreds of millions will adopt passkeys in the coming months. The Fast Identity Online Alliance recently reported that more than 15 billion online accounts can use passkeys, with Google claiming 800 million of its accounts are now utilizing the technology, up from 400 million earlier this year.

[00:12:30] Despite these advancements, Microsoft acknowledges potential challenges, including device security and user accessibility, as it aims for a future with fewer passwords. Why do we care? Microsoft's approach, leaving users no option to block installation, could cause pushback from both consumers and businesses. IT providers managing fleets of devices may face frustrated clients needing help to remove or disable the app. It adds to administrative overhead from MSPs.

[00:12:59] It could also lead to a swell of shadow IT risks. This might all get worse if those pricing increases spread. This price increase could push cost-conscious users and small businesses towards platforms like Google Workspace, especially in regions with high costs of living. IT providers should be ready to offer migration services or position themselves as advisors on cost-effective solutions.

[00:13:23] From forced app installations to price hikes, Microsoft is doubling down on its ecosystem dominance, often at the expense of user choice. Providers should prepare for client pushback and focus on mitigating friction. Are you ready to get your brand in front of the tech leaders shaping the future of managed services?

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