The term ‘Digital Transformation’ has been bandied around for years, usually coupled with themes of automation and standardisation. Transformation, by definition, is an extreme or radical change. It’s been a daunting challenge for many organisations who are now embracing the high-velocity winds of change being generated by Artificial Intelligence (AI).
Between 2015 and 2019, the number of businesses utilising AI has increased by 270%. And the AI market is expected to skyrocket in the coming years, reaching $300 billion by 2026.
AI refers to computer systems that perform tasks that have historically needed human input. AI uses algorithms and mathematical models to process vast amounts of data, learn from it, and then makes decisions based on that learning. Using AI in business inherently improves data accuracy overtime so that organisations can achieve typical goals of cost reduction and improved efficiency via automation of manual processes. 63% of businesses say they will need to use AI due to the pressure to cut costs.
AI-driven analytics accelerates knowledge transfer throughout organisations. Not only does AI work 24/7 (without coffee breaks or meeting interruptions!), it can stitch data together in a way that surfaces answers to questions that people don’t think or know to ask. Through this augmentation of data, AI ultimately improves visibility of valuable insights relevant to the specific business goals that it has been built to achieve.
Another intrinsic benefit of AI is employee uplift. AI can manage repetitive or menial tasks that people find boring, freeing employees to focus on more interesting, value-adding tasks. AI also has the potential to reduce human error and improve the calibre of an organisation’s decision-making capabilities.
In the context of digital transformation, AI can significantly improve the speed of transformation and accelerate the value of company data. According to a global poll of more than 3,000 executives, almost 85% of executives think AI will help their businesses gain or maintain competitive advantage. Yet only 20% have included AI in some of their products or procedure, and only 5% have already fully integrated AI.
As a business leader, it's important to understand if AI is suited to your organisation. Beneath the motherhood statements of 'acceleration' and 'accuracy', AI has the potential to deliver benefits to an extensive range of businesses and industries in unique ways. Industries particularly well suited to AI include:
- Healthcare, where AI has the potential to analyse medical images and build knowledge banks to identify potential health risks.
- Retail and customer management, where AI can coordinate and analyse multi-millions of transactions to map and manage individual customer journeys while providing visionary future market
- Manufacturing is already actively leveraging AI's ability to improve production, quality and logistics.
- Education is also actively employing AI's ability to monitor individual learning needs to deliver personal learning experiences.
- Finance is fast adopting AI to improve the speed and accuracy of market forecasting and opportunities to improve efficiencies, resilience and optimise cash flow.
“We’re acutely aware of the growing stigma that surrounds AI. We need to let go of the fictional misnomers from Cyberdyne Systems and their little 80’s project called Skynet (aka Terminator). We shouldn’t judge all AI based on a few bad apples, or should I say rogue supercomputers. AI’s greatest potential is to help people perform repetitive jobs more efficiently and augment their capabilities," says Nitin Upadhyay, Chief Innovation and Data Officer, RobobAI.
"At RobobAI, our data science team recently created an unsupervised AI algorithm that could accurately predict the likelihood of if and when invoices would be paid. This will enable the CFO of a large multinational financial institution to manage their cash flow with high confidence.”
Drilling down from industries to organisations, those that can realise the greatest benefits from adopting AI are large organisations with high volumes of data. Be it a multinational or a holding company housing multiple businesses, AI defeats the challenge of multiple, siloed, legacy systems bursting with disparate, duplicate, incomplete data.
It does this by, firstly, consolidating data into a single source. In this process, data is cleansed and categorised. Only then can data analysis and data quality improvement begin. From this point, organisations need to invest time and resources in establishing their unique AI foundation.
AI's true potential offers so much more than collecting and consolidating historic data into a single source ERP. It perpetually builds relationships between millions of data points, augmenting large volumes of data into meaningful narratives. For this reason, establishing an appropriate AI foundation is critical for long-term success.
At a strategic level, building your AI foundation involves identifying the specific business problems that AI can help solve. At a tactical level, it is imperative to establish the metrics to measure success. You need to dive into the detail and assess the quality of your data. Data is the fuel that AI uses to learn and provide insights. A phased approach is recommended, starting with a small data project, monitoring and evaluating the AI's success and then scaling up as you build confidence in the technology.
AI offers the rich potential of exponential growth in the value of strategic insights drawn from your data. To achieve this, organisations need to adopt a proactive culture of data quality. Data has a direct and iterative relationship with AI. AI is not a 'one and done' style technology implementation.
AI is a powerful engine that needs stringent management to navigate its optimal path. Establishing an AI foundation for your organisation can be a complex process, but if done well, it can accelerate.
ROI from your transformation and ultimately increase your competitive advantage. The Forbes Technology Council suggests, ‘Any business today should assume its competitors are using AI/ML or will be soon.’
Actionable tactical insights and valuable strategic direction all lay dormant within your data. To unlock these, business leaders need to invest in AI. Competitive advantage will be the reward for those who manage it well.