3 Ways AI Can Boost a Modern-day Business
Artificial Intelligence (“AI”) has received a lot of media attention. The popular view comes from films like “Terminator” and “I Robot”, but the reality is that it has wormed its way into business to become an integral part of our everyday lives.
What is Artificial Intelligence and how can it help business?
The formal definition of AI is that it is a process that drives systems or machines that mimic human intelligence to perform tasks. A further extension is where an AI System can iteratively learn and improve itself based on experience.
AI in Business
The first step in bringing AI into a business is, as always, to define the business benefits you expect, and to see the resources you will need to implement and maintain an AI environment.
Using AI to assist with the digitising and automation of laborious and time-consuming tasks can benefit a business by redeploying staff towards projects in the long-term business strategy and improving business productivity and profitability.
Three business areas that are turning out to be important today include:
Supply Chain Management
Inventory in a business represents a sizeable investment in the costs of purchasing it, managing it, and selling it. Companies are keen to minimise inventory to reduce costs, but without sacrificing operational flexibility and efficiency.
AI is being used successfully in Distribution Management, formerly a tedious, complex operation that was often subject to human error. Staff can be redeployed to more productive tasks.
For example, Amazon has invested heavily in AI-driven automated supply chain management. After the acquisition of Kiva Systems in 2012, they used Kiva’s expertise, software, and warehouse robots to make quantum improvements in their supply chain management policies and procedures. Currently, they use AI and their robots to manage stock levels and in order fulfilment.
That’s fine for an organisation of Amazon’s size and reach, but what of smaller businesses? You may not need a warehouse with robots, but you can certainly use software based on an AI engine to detect patterns in stock movement. That allows you to identify slow-moving and redundant stock much earlier than before, allowing you to concentrate on your quicker-moving and more profitable items.
Cash flow improves, stock levels are more accurately recorded and inventory management efficiencies improve.
Using AI in factory floor automation can also boost business performance and productivity.
Big Data Management
A wealth of information Is out there on the Internet about individuals, their buying preferences, and social behaviour. All this is collected and curated by organisations such as Google, Facebook, Internet browsers and social media in general. Google yourself to see just how much is known about you.
Large corporations like Coca-Cola need to use the opinions expressed on social media and use them to identify changing trends in buyers and their experiences to tailor product development, placement and advertising. It is impossible for an individual to mine this ocean of often irrelevant and superficial data to draw out relevant statistics about individual and group behaviour.
And that is where AI has become an indispensable tool in data mining, or as it is called in this context, opinion mining. It is valid not only for large organisations. A smaller business can use AI-based commercial software tools and techniques to improve business processes and generate valuable information about product movements.
Recommendation Engines
In a similar vein to opinion mining, Big Data can be mined to find customer preferences that enable suppliers to personalise the customer experience with focussed and directed purchasing recommendations. That will increase customer retention, and hopefully sales.
AI is increasingly being used to generate recommendations for current and potential customers.
As an example, the New York Times used an AI-driven recommendation engine to create an “AI Gift Concierge” that can customise recommendations. Diners Club and Amex have something similar, and in general, any business could use an AI-driven recommendation engine to move closer to their customers.
Those three are AI applications that are currently in use, and we can expect that as they mature, other application areas will benefit from AI expertise. Combined with Machine Learning, Automation, Natural Language processing, and intelligent voice capabilities, AI will become a major driver in reducing the cost and improving the efficiency of business processes.
For instance, chatbots will improve customer engagement, as can already be seen with chatbots used as intelligent assistants to help desks. They are available 24/7/365, don’t need payroll benefits, work breaks or vacations, and as such are very cost-effective.
On the downside, some commentators are worried that as AI develops and improves in its capabilities, at some point AI devices could become more intelligent than humans. They contend that if that happens, and all indications are that it will, and AI devices become self-replicating, we as a human race will be faced with a real-life “Terminator” event.
In the meantime, businesses can harness AI to continue to evolve in parallel with digital transformation.