Artificial intelligence (AI) is playing a significant role in transforming different industries. The use of AI in business is wide-ranging, and most consumers have already come across this technology in their everyday lives. While some businesses remain apprehensive about investing in technology that might not bear desired fruit, the other alternative is losing out on market share to competitors who choose to jump on the AI bandwagon. Depending on the type of business you run, you might benefit by taking a look at what AI has to offer.
The Business of Artificial Intelligence
It is not without reason that many tech experts view AI as a disrupter in various business processes across different verticals. The AI business is booming, to say the least, as clearly highlighted through these numbers.
- The AI market was valued at over $27 billion in 2019 and is expected to cross $266 billion by 2027.
- More than 90% of leading businesses are increasing their investments in artificial intelligence.
- The use of AI in business brings with it the potential of increasing productivity by 40%.
- While AI is expected to have replaced over 75 million jobs by 2022, it is also expected to create 133 million jobs by the same time.
- Three-quarters of executives familiar with the use of cognitive technology in their businesses feel the technology will help their companies transform within three years.
How Can Artificial Intelligence Help Businesses?
Given the large volumes of data that businesses have access to in this day and age, coupled with rapidly changing consumer preferences and behavior, businesses need to look beyond traditional methods if they wish to remain relevant and grow. The application of artificial intelligence in business can help drive growth through actionable insights generated by analyzing big data.
The role of AI in businesses boils down to using intelligent software that has human-like learning capabilities with the aim of:
- Improving user/customer experience
- Increasing efficiency and productivity
- Driving transformation
- Boosting revenue and growth
What AI Can Do for Businesses
When it comes to the use of artificial intelligence in business, it is important to look at what AI can do for you from the business capabilities point of view as opposed the just the technology. From where AI has gotten us this far, it is well-equipped to fulfill three crucial business requirements.
- Automating processes. The most common use of AI in businesses is automating physical and digital tasks across different back-end systems using robotic process automation (RPA). This is typically the easiest and least expensive type to implement and tends to come with a high return on investment (ROI).
- Gaining cognitive insight. Businesses can use AI-based algorithms to identify and understand patterns by going through large volumes of data. Examples of what AI applications in this realm can help businesses with include predicting customer behavior, automating the personalization of ads, and detecting fraudulent activity in real-time.
- Building cognitive engagement. AI projects that work in engaging with employees and customers rely on machine learning, intelligent agents, and language processing chatbots. Examples of AI in this category include 24/7 intelligent agents designed to answer a growing array of customer queries, internal apps/websites for addressing employee questions, as well as recommending products and services through increased engagement and personalization.
Three Artificial Intelligence Examples From the Business World
Access to very large volumes of data has given rise to different AI-based applications for businesses – be it through analytics, process automation, or personalization.
1. Analytics and Insights
Artificial intelligence helps businesses make sense of all available data and it also provides useful insights. These insights can help businesses make their marketing more effective, get a better understanding of their target audience, offer segment-based experiences, and develop suitable business strategies.
One of the benefits of AI in business revolves around using highly targeted personalized marketing. Businesses may now look forward to identifying target audiences for specific products and services while understanding what works in attracting different customers. By increasing marketing effectiveness and the possibility of sales, businesses may also expect to bring down their overall marketing expenditure.
3. Natural Language Processing
Machines now have the ability to read, write, and even understand languages in a way that humans do. With continual advancements in the field of natural language processing (NLP), businesses have begun offering smart digital assistants to simplify their customers’ everyday lives. The best examples of smart assistants come in the form of Siri and Alexa. Both are capable of recognizing patterns because of voice recognition, they can infer meanings, and they then provide useful responses.
Other examples where you might come across NLP in action include digital phone calls, email filters, search engine results, predictive text, translation, text analysis, and data analysis. Businesses have also started using NLP models to generate reports based on sentiment analysis by understanding consumer perception about specific bands across different online platforms.
When it comes to increasing marketing effectiveness and brand engagement, businesses need to recommend products to satisfy the needs and retain the interest of their target audience. Big names such as Amazon, Netflix, and Spotify have already begun using AI to understand user behavior and predict which products to recommend. Recommendations account for around 75% of the content that Netflix users watch, and the company has been reducing its expenses by around $1 billion every year owing to AI recommendations.
8 Business Functions That Will Benefit Through Artificial Intelligence
If you feel that AI-based technologies are still in their nascent stages, you need to realize that an increasing number of business leaders are looking at leveraging the benefits that artificial intelligence brings to the table. Here are some business functions that can already look at adopting AI models in their operations.
1. Customer Service
Chatbots are responsible for handling an increasing number of customer interactions with businesses in real-time without any human intervention. They can address a range of functions such as placing orders, resolving complaints, and providing different types of information. Businesses can also use AI models to build customer relationships and enhance sales. Burberry, a leading luxury fashion brand, provides tailored recommendations to its online and in-store customers after using AI to analyze shopper data through its reward and loyalty programs.
AI has the capability to segregate customers based on demographics or interests, and also to run targeted ads according to browsing histories. Chatbots are at play in the sphere of marketing as well, given that they can offer product suggestions, help solve problems and provide sales support. Another way in which AI can support marketers is by analyzing data surrounding consumer behavior quicker and more accurately than humans. Marketers can then use the insights they receive to make suitable adjustments in their strategies.
Artificial intelligence can help address aspects such as predicting customer needs, sales forecasting, and improving communication. Sales professionals can rely on AI for time management, to identify when and who they need to follow up with and to determine which probable customers are at the brink of converting.
4. Research and Development
AI gives businesses across industries the potential to get a deeper understanding of different aspects by accurately and analyzing large volumes of data. This feature can help in addressing research problems and developing suitable solutions.
5. Human Resources
Human resources can benefit by turning to AI through data-based decision-making as well as by simplifying the screening and recruitment process. Businesses can use chatbots to answer questions candidates might have about their policies and benefits. PepsiCo used Robot Vera that came equipped with advanced speech recognition software and tools from Amazon, Microsoft, Google, and Yandex to make calls and screen candidates for a variety of positions in Russia.
Artificial intelligence can help manufacturing units anticipate a rise or fall in demand. Using sensors with manufacturing equipment can help identify maintenance needs ahead of time. Businesses can also expect to streamline quality control processes. Further, data analytics can help improve the entire supply chain and inventory tracking process.
7. Finance and Accounting
According to Accenture, robotic process automation can help financial services in reducing costs, increasing quality, and saving time. Finance and account professionals can be freed from carrying out repetitive tasks, and they can also expect to receive real-time updates surrounding important financial matters.
8. Building Maintenance
Building managers can look forward to optimizing energy use through the use of AI by effectively monitoring and controlling heating/cooling and lighting systems. Monitoring large buildings is bound to get simpler with the adoption of internet-of-things (IoT) devices and sensors along with computer vision. With all the data on hand, AI models can adjust systems to account for factors such as the time of day and the number of occupants. AI systems can also help improve building security.
Are There Any Challenges?
While there is a steady rise in the use of artificial intelligence in businesses, two main factors pose a challenge when it comes to adopting AI models.
- Scarcity of data. Even though businesses have access to large volumes of data, using it in the right manner with the help of AI is not always easy. This is because much of the data companies have is often unstructured and unlabeled. However, most AI models require supervised training that relies on labeled data. In addition, the unavailability of much data can be a problem with relatively new business areas.
- Algorithm bias. Last year, IBM, Microsoft, and Amazon ceased selling their AI face recognition software to law enforcement agencies owing to the gender, racial, and ethnic biases of their software. This goes to show how algorithms can function poorly when trained using biased data.
Challenges surrounding threats to privacy and data security continue to remain a concern, as do existing limitations in computing capability.
Top 3 Businesses That Have Succeeded With Their AI Efforts
Several leading companies across sectors have already used artificial intelligence technologies to good effect.
- This ride-hailing business relies on artificial intelligence to predict demand. Next comes efficient matching of drivers and riders as well as minimizing estimated time arrival. The company’s AI-based one-click chat feature gives drivers easy means to communicate with riders through automatic response recommendations. Machine learning is also helping the company with route optimization, driver onboarding, fraud detection, and marketing.
- This Chinese tech giant has embraced artificial intelligence in many forms. Already in use to improve traffic conditions, its City Brain project aims to help cities streamline their operations by using AI. The company uses AI for predicting which products its customers might want to buy, and also to create product descriptions. Dian Xiaomi, an AI-powered chatbot, is able to understand over 90% of customer queries and is used by around 3.5 million customers per day.
- Reports suggest that AI-based recommendations account for a significant percentage of this company’s total sales. Other than being able to predict what customers might wish to purchase, Amazon has also leveraged AI to run cashier-less grocery stores. Alexa, its smart assistant, continues to learn every day.
Artificial intelligence has brought about significant changes for businesses across different industries. One of the biggest driving forces is machine learning, which involves giving a computer the ability to improve its performance without the need for human intervention. From forecasting patterns to automation of processes, AI comes with the potential to accomplish tasks with increased speed and accuracy.
Businesses, on their part, need to be prepared for adopting AI technologies as well as to deal with regulatory and ethical challenges that might follow. While naysayers might continue to cast aspersions on where AI is headed, what remains evident is that there are advancements that are the order of the day. With no finish line in sight, it’s best for businesses to partake in the race before they become irrelevant.
The bottom line is that AI is not set to outpace human beings by copying us, but through unparalleled processing power, access to large swathes of data, and ever-evolving algorithms. If you’re still not sure about how AI can help your business, consider contacting an expert before the train leaves the station.