Investing in AI can help a business grow, while generating enterprise value.
“Businesses that deploy AI can expect sales growth through more precisely targeted and relevant customer engagements, more rapid scalability across business operations and greater productivity,” says John Michaelis, an expert in the practical aspects of using AI and an experienced business consultant. He is also an active angel investor and board advisor for early-stage AI companies.
He provides three essential tips for using AI to grow your business and generate enterprise value.
1. AI learns from your data
Before embarking on the widescale use of AI, it is important to recognise the fundamental differences between AI and other algorithmic systems. AI learns from user data, so its performance improves over time. This means that data sets must be reliable, and the business must invest in demonstrating and communicating its ethical operating practices, to ensure the defensibility of the lack of bias in its algorithms.
2. Getting started
Before making any significant investment in AI, organisations should be clear on the art of the possible and what available data there is; this is probably best undertaken by two or three individuals drawn from customer-facing business units and someone with comprehensive knowledge of the organisation’s data assets.
3. Investment priorities
Investment priorities should determine which AI projects to pursue first. Organisations with high growth potential will probably be best served by projects that improve customer acquisition rates and/or cross sell/upsell opportunities. In more established companies, customers may be more locked in, therefore, it is likely to be improved productivity, reduced operational costs, scaling and accelerated market readiness of new products and services.
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New products and services
Professor Andy Pardoe, founder and managing director at Pardoe Ventures, explains that AI can be to produce new products and services. The technology isn’t just a tool to drive operational efficiencies and better customer service.
He says: “There is a natural tendency to use AI to simply enhance existing processes and procedures, improving efficiencies and operational quality. While this will add some improvement to the bottom line, it is an approach that is limited in its potential benefits. Rather, CEOs, CIOs and CTOs should be looking to explore new products and services that are only possible with the significant application of artificial intelligence capabilities. These new opportunities will augment the current offerings and will provide the potential for large scale growth due the level of automation and efficiencies built into the new services from day one.”
The use of AI in business is growing
According to Nick McQuire, SVP, enterprise research at CCS Insight, most organisations are planning on increasing their IT investments in the coming 12 months to drive transformation and improve resiliency.
But most of all, he suggests that organisations are looking to grow and over 60% of firms CCS Insight’s have surveyed now plan to increase their investment in AI as a key area to enable this.
“We are seeing three areas above all standout which are helping businesses grow in this difficult climate. Most of all, these environments all accelerated during the pandemic. The first is in customer experience, where AI is being used in areas such as virtual agents to improve waiting times and in contact centre transformation to help humans in contact centres now working remotely handle higher value customer enquiries,” says McQuire.
He continues: “The second area is around personalisation. AI is being used in ecommerce to improve the buying experience as well as to more accurately improve demand forecasting. In some cases we are seeing that AI can improve conversion rates by up to 20% when utilised effectively in the buying experience.
“Thirdly, we are also seeing AI used in fraud detection, helping companies, particular financial firms, improve the customer experience and save money on fraudulent transactions.”
AI is one part of the modern workforce
Like McQuire, Malcom Ross, VP product strategy and deputy CTO at Appian, understands that Covid-19 has revealed that every organisation needs a program for rapid change and constant adaptation.
“The pandemic disrupted nearly every major business process from R&D to supply chains, delivery and customer service. Artificial intelligence can play a big part in recreating those broken processes as smart processes that can help organisations make better decisions in the future,” he says.
However, by itself, AI doesn’t impact business outcomes. Instead Ross calls AI one member of the modern workforce, side by side with software bots, and people. “To get maximum business outcome value, all modern workers — human and machine — must be seamlessly aligned in a single workflow. That’s how better decisions turn into faster, better actions,” he advises.
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From manual to automation
Adam Lieberman, head of artificial intelligence and machine learning at Finastra, explains that “using AI to understand customer behaviour is critical in helping firms build stronger engagement with customers and to fuel growth. Taking historical data, understanding it, and identifying patterns, enables firms to better know who their customers are, what they like, how they use products, and to build smarter products and services tailored to their wants and needs.”
He continues: “Firms can leverage AI to automate inefficient manual tasks, increasing productivity and reducing costs. AI methods in Optical Character Recognition (OCR), for example, not only vastly reduce the time it takes to extract and structure relevant data, they can also eliminate human error from the extraction process and be used in combination with other AI based models for tasks such as error correction.”
Bringing everyone on the AI journey
Alan Gibson, VP EMEA at Alteryx, adds that “the businesses that will benefit most from AI in the next five years will be those who not only invest in the right technologies that equip their entire workforce, but also a culture to empower all employees to deliver change — not just the data scientists and analysts.”
It’s about bringing everyone on the AI journey — “growth means streamlining and automating processes, and to do that, business leaders need to consider how to make emerging technology available to all workers. An easy-to-use platform that automates data analytics will prove the most valuable, not to mention economically smart, in the coming decade,” he continues.
Pointing to Gymshark, the popular fitness brand, as an example, Gibson explains that it used an automated analytics platform to identify which categories were performing well (and those that weren’t) quickly and accurately. The platform allowed the company to tweak product offers, tailor marketing approaches and, ultimately, remain agile and profitable during a period of economic uncertainty.
However, not all businesses are at this stage and many are struggling to embrace AI.
According to Gibson, “the barrier we’re currently facing across the board is the intersection of people and tech. They key to overcoming the roadblock comes down to tackling the skills gap and empowering workers to solve complex data science by introducing platforms that are intuitive, easy to adopt, and capable of syncing with the existing workforce. It’s universally accepted that data adds value, but only when everyday workers are able to pick out relevant, actionable insights to inform businesses across the entire organisation.”