INSIGHTS

How to Build an AI Strategy: A Step-by-Step Guide

An IoT Solution for Water Loss
8 minute read

August 21, 2025

Current Smart Meter Adoption

The complexity of artificial intelligence (AI) may seem like a field reserved for large global corporations with significant financial resources. However, AI can benefit any company. Small and medium-sized businesses are increasingly leveraging AI to boost operational efficiency, enhance customer engagement and accelerate growth. The key is to get started with one achievable project.
This guide cuts through the complexity of AI project planning to help any company develop a clear roadmap, rather than trying to become experts overnight. It will break down the development of an inaugural AI project into three straightforward, actionable stages, from identifying potential applications to creating a tangible implementation roadmap. The result is a step-by-step guide to getting started with an AI strategy.

Step 1: Start with the Business, Not the Technology

Businesses often err by pursuing the latest AI trends without a defined objective. The most effective AI strategies do not originate from the question, “What can we do with AI?” They begin with, “What are our biggest business challenges, and can we measure them?”

Before examining a single AI tool or model, consider the specific operations it supports. The objective is to identify practical challenges that AI can address.

Identify Pain Points

Common pain points are “Where do things get stuck,” or “Where are the biggest inefficiencies in daily operations? It could be the hours teams spend on manual equipment inspections or generating regulatory reports. Make a list of these bottlenecks.

Define Business Goals

What goals are achievable in the next quarter or year? Be specific. Instead of “reduce maintenance costs,” aim for goals like “reduce maintenance costs by 15%” or “reduce equipment downtime by 12%.” Clear goals will help keep the focus on the expectations for the AI project.

To get the ideas flowing, ask questions like these:

  • What repetitive, manual tasks do we want to automate?
  • How could we make better, faster decisions with the data we already collect?
  • How could we improve a specific operations metric?

 

Step 2: Identify Projects Using the Impact vs Effort Matrix

Upon compiling a list of potential issues to address, the subsequent step involves identifying the initial project. The key lies in avoiding an overly ambitious undertaking. For this inaugural initiative, swift success is paramount—one that is both attainable and capable of yielding demonstrable value.

A great way to visualize this is with a simple Impact vs. Effort Matrix. Draw a four-quadrant grid like the one below. Label one axis “Business Impact” (low to high), and the other “Implementation Effort” (low to high).

Impact vs Effort Matrix

High Impact
Low Effort
High Impact
High Effort
Low Impact
Low Effort
Low Impact
High Effort

Implementation Effort

Business Impact

The first AI project should come directly from the “High Impact, Low Effort” quadrant. These are the “low-hanging fruit” opportunities that can build momentum and get further buy-in from teams and management.

What does this look like in practice? Here are a few examples of starter projects that can significantly enhance operations for industries such as utilities, water treatment, telecommunications and the oil and gas sector.

Use case 1: Predictive maintenance for industrial equipment

Instead of reacting to equipment failures after they happen, this project uses AI to predict them. AI models train on historical data from sensors on industrial equipment, such as pumps, turbines, or pipeline sections, as well as maintenance records and repair logs. These models quickly identify the early warning signs of a breakdown.

This capability enables companies to achieve operational improvements by transitioning from reactive or scheduled maintenance to predictive maintenance. Technicians dispatched to fix equipment before it breaks down reduce costly unplanned downtime, extend asset life and improve worker safety.

Use case 2: AI-powered demand forecasting

This project focuses on utilizing AI to more accurately predict future demand for resources, such as electricity, water, or network bandwidth. AI algorithms analyze historical consumption data, along with external factors such as weather patterns, economic indicators and time of day, to create highly accurate demand forecasts.

For utilities, better forecasting enables the optimization of energy generation and grid load balancing, thereby preventing outages and reducing waste. For telecoms, it ensures network capacity can handle peak usage times, improving service reliability and customer satisfaction.

Use case 3: Leak and anomaly detection

For industries managing vast networks of pipes, this project utilizes AI to pinpoint leaks and other operational issues quickly. AI systems monitor real-time data from acoustic sensors, pressure monitors and flow meters installed along pipelines. The models utilize the data to identify specific data signatures associated with events such as leaks, pressure drops, or equipment malfunctions.

This analysis enables the rapid detection and precise location of leaks, which is critical for conserving resources (such as water or gas), preventing environmental damage and ensuring regulatory compliance. The operational improvements include drastically reducing the time and labor required for manual inspections of miles of infrastructure.

Step 3: Create an AI Project Roadmap

An idea to utilize AI is just an idea until a plan accompanies it. A project roadmap transforms the chosen use case into an actionable project, detailing what to do, when to do it and how to determine if it’s working.

The first roadmap doesn’t need to be a 50-page document. It can be a simple outline covering these four key areas:

  1. Define the Scope: Be crystal clear about what this first project will do and, just as importantly, what it won’t do. For a telecom network, the scope might be “Identify how many new customers are possible by boosting the signal x%.” Exclude complex, multi-part queries for now.
  2. Set a Timeline: Break the project down into simple phases with clear milestones. What do you want to have accomplished in 30, 60 and 90 days? This structure keeps the project on track and helps manage expectations.
  3. Assess Resources: Take stock of the available resources and identify any gaps or shortages.
    • Data: Is the data required to train your AI model available? Is it clean and accessible?
    • People: Do team members possess the necessary skills, or are outside partners required to fulfill these requirements? 
    • Tools: Is a user-friendly, off-the-shelf AI tool available, or does it require a custom-built solution?
  4. Define Success: Determine how to measure the project’s impact? Set 2-3 clear key performance indicators (KPIs). For an emissions reduction goal, a great KPI would be “reduce emissions by 3% within two years.” For an electric utility, it might be “reduce unplanned outages by 5%.”

An AI Journey Begins with a Single Step

Creating an AI strategy may sound intimidating, but it ultimately boils down to a practical and logical process. By focusing on business needs first, companies can ensure that all efforts are grounded in creating real value.

The AI journey begins with a single step. A well-defined, conquerable first step provides the tangible evidence and momentum needed to champion broader AI adoption across the organization. By selecting an attainable project with clear, measurable metrics, companies are not only aiming for technical success; they are also building a case for future investment. Choose wisely, measure meticulously, learn, deliver value and start building a culture of innovation.

 

Continue learning:

Understanding Traditional AI vs Generative AI

How to Use Unstructured Data in AI Models for Superior Insights

Other articles that may interest you

Let’s Talk About Your Next Big Project