THE 5%

CLASSIFIED
KEY LEARNINGS

The MIT Nanda Report

Decoding AI Success: Discover why 95% fail—and how the elite 5% consistently deliver.

Download 2025 Report (PDF)Direct download • 42 pages
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Reality Check

"The hype on LinkedIn says everything has changed, but in our operations, nothing fundamental has shifted. We're processing some contracts faster, but that's all that has changed."

— Mid-market Manufacturing COO

95% of pilots stall. Most enterprises waste 18+ months and $5-8M before admitting failure.

CRITICAL
FINDING 01

Your Approach Determines Success

"The divide does not seem to be driven by model quality or regulation, but seems to be determined by approach."

Your model or regulation isn't the bottleneck—your methodology is.

HIGH PRIORITY
FINDING 02

Productivity ≠ P&L Impact

"ChatGPT and Copilot enhance individual productivity, not P&L performance."

Real impact emerges from AI deeply integrated into workflows, replacing external agencies or BPOs.

VALIDATED
FINDING 03

Failures Stem from Poor Execution

"We've seen dozens of demos this year. Maybe one or two are genuinely useful. The rest are wrappers or science projects."

Projects fail because of brittle workflows, lack of contextual learning, and misalignment with operations.

ACTION REQUIRED
FINDING 04

Partner Selection Doubles Success

"External partnerships see twice the success rate of internal builds."

Successful organizations treat vendors like strategic partners, holding them accountable to business outcomes.

STRATEGIC
FINDING 05

Real Savings Begin in Back-Office

"Real gains come from replacing BPOs and external agencies, not cutting internal staff."

Start where results are measurable and savings tangible, then scale.

The Bottom Line

1

Define measurable P&L outcomes upfront.

2

Co-develop externally with vendors accountable for business results.

3

Ship or kill pilots within 90 days.

4

Prioritize back-office agency replacement.

5

Evaluate based on business impact, not software metrics.

Your next deployment doesn't have to join the 95%.

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