By Tarmo Koppel (2022)
The concept of artificial intelligence has been around for decades. But only in the past decade companies have started to seriously go into AI solutions – because it has become evident that artificial intelligence is the future of business. Some even claim, no business can survive without AI. The era of AI is proposed to revolutionize how we do business even more than did the industrial revolution.
Artificial intelligence (AI) is the technology used to create machines that think and act like humans. AI is a broad term, but it can be broken down into several subsets of machine learning, including computer vision, natural language processing, and deep learning. Today, companies use AI across many different industries for a variety of purposes—from automating simple tasks to identifying patterns in massive data sets to making predictions about future events.
Next, we’ll present some of the most prominent arguments, why businesses invest into AI solutions.
Lessons learned from last big change
Couple of decades ago when smart investors understood that eventually nearly every company would be an “Internet company.” The same holds true for AI. Processors get ever faster, storage becomes cheaper, software better, and data collection more efficient, therefore AI will only get smarter and ever more effective in business. The great success stories of the next decade will also be the most innovative in the use of AI.
Keeping up with digitalization
AI, machine learning, and deep learning are an essential part of every industry and almost all major companies. Artificial intelligence allows businesses to stay ahead of their competition by keeping up with digitalization trends such as online shopping. Those lagging behind could soon find themselves underperforming compared to industry standard.
AI technology has matured
Artificial intelligence has been a hot topic for quite some time now, but it’s only recently that the technology has advanced enough to start being put to use in modern businesses. This shift has mostly happened over the past 5 years, and as of today, the business community widely accepts the AI as the future of business.
Storing big data has become really cheap
The role of data warehouses will become increasingly important. Not only storing data, but also having a proper data processing functionality will be crucial to successful business operations. Business data analytics allows for the creation of insights into complex topics with the help of artificial intelligence systems. This includes cloud computing and large-scale data analytics on multi-clusters high performance or supercomputers. These automated tasks analyze business processes, business environment and other parameters to determine the best operational configuration.
AI can bare a wide variety of responsibilities
Already now, AI can partially or completely subsitute human worker in many responsibilities. It can do everything from basic tasks like accounting and record-keeping, to complex processes like customer service and decision-making.
AI is highly customizable
AI is able to learn new things quickly, so it can be trained on one task and then easily repurposed for another. AI is able to adapt its behavior based on the feedback.
AI can improve itself over time
As with human worker, also AI can learn over time and get better. AI is able to adapt its behavior based on user feedback—it can learn from previous mistakes and correct them next time around. AI also learns over time, meaning that it gets better at performing its tasks as time goes on rather than becoming obsolete after training is complete (like humans do).
AI enables new opportunities
It helps companies expand their activities and provides them with new opportunities. With AI, businesses are able to reach new markets that would have been impossible before. Companies that are using AI technologies, there may also be additional opportunities for revenue growth as they expand into new areas (such as selling products directly through chatbots), where previously they had no capabilities.
AI improves business operations
AI is used for many different business applications, where it’s being incorporated into the workforce in order to streamline processes and make them more efficient. The benefits of AI are numerous, including predictive maintenance. AI can help businesses predict when equipment will fail and decrease instances of downtime.
AI takes over labor intensive work
By taking over labor intensive work, AI enables human workers to be assigned to more value adding tasks. AI can also help businesses save money by automating processes that would otherwise require human labor (for example, analyzing video footage from security cameras). In another example, if you were an accounting firm, you could use AI to analyze your clients’ current financial situations instead of having an accountant manually look over each client’s documents. This would free up the accountant’s time so they could focus on other aspects of the job, like making recommendations based on those findings or working with clients on other issues that require attention from an expert in accounting practices.
To gain competitive advantage
Artificial intelligence isn’t just useful because it’s efficient; it also offers competitive advantage against other businesses by enabling companies to perform activities faster than their competitors can keep up with or even do at all. Businesses are investing heavily into AI to gain a competitive advantage. AI has brought about the new way of making business. Machine learning enhanced business processes has allowed to efficiency increase. In turn, this gives companies an advantage over others who aren’t using AI tools because they won’t have access to these insights about what consumers want or need from their products or services.”
AI increases productivity
Businesses are using artificial intelligence to improve their efficiency and productivity, and they’re seeing huge benefits from doing so. So far the main productivity increase comes from AI enabled automated processes. Before, where many humans needed to cooperate to produce a joint output, now an AI system can take it over. AI allows increased efficiency – businesses can do more with fewer resources, which means they can make more money while keeping costs down.
To improve profitability
Businesses are investing heavily into AI to gain a competitive advantage and improve the profitability of their company. The most obvious benefit, how AI allows companies to maximize their profits, is by automating tasks that would otherwise require human labor. Big and small companies are using AI to optimize operations and make better decisions. Artificial intelligence enables companies to become more profitable by cutting costs while increasing productivity at the same time—something that would be impossible without this technology! All the big companies like Amazon and Google are using AI to make their products smarter and more effective.
Improved customer service
Artificial intelligence makes it easier for companies to provide better customer service. AI advantage is that it can help companies become more competitive by providing insights into consumer behavior patterns and preferences. This allows them to create products or services that better meet customers’ needs than competitors’. AI develops offerings and recommendations personalized to customer’s suspected needs. In customer service, AI can answer questions automatically, among other things
AI helps managers to make better decisions
Artificial intelligence can support business managers in the decision-making process. AI helps businesses make better decisions by providing them with more data than human beings could ever gather on their own. This data can be used in real time or after the fact to gain insight into business processes and customer behavior.
The future of work
Artificial intelligence (AI) is expected to have a transformative impact on all industries in the years to come. Artificial intelligence has been changing the way we live, and it’s also changing the way we work. AI will change the way human workers interact with machines as well as how they interact with each other. It will also change the nature of the work itself, leading to new types of occupations and skills being developed that do not exist today. While in the early days of the technology people may fear being replaced by robots, the reality is that AI will create new jobs and enable more human beings to tackle complex problems.
AI is economically feasible for both large and small
For example, big companies like Amazon and Google are using AI to make their products smarter and more effective. And smaller companies are using AI to optimize operations and make better decisions.
AI requires committment from the management
The benefits and drawbacks of AI depend on how businesses use it. The benefits of AI are numerous, including those few listed above, but AI also presents some risks. Businesses need to consider the required capabilities and costs before choosing to adopt AI. AI requires data collection, which can be expensive. In addition, AI requires training on the part of employees to ensure they use the technology properly—training that can also be costly. In order to benefit from AI, the organization needs to committed – making available the money and people who know how to run these systems. Only when the organization’s resources are mobilised, the true value from the AI can emerge.
Challenges of going into AI
Of course, there are also some challenges associated with implementing AI systems. These challenges include: -costs associated with building an infrastructure capable of handling large amounts of data; -skilled workforce who are trained to work with AI systems; loss of jobs. Due to its ability to automate tasks previously done by humans, this could potentially result in job losses. Some jobs will be lost, though many experts believe that this will be offset by new jobs created as part of the digital economy overall.
Cite as: Koppel, 2022, Why do businesses go into AI?, AI and business society.