Artificial intelligence technologies are revolutionary. They are the tools we use to get the most from the mountains of data being collected every day. Like all powerful tools, AI technologies can often be misunderstood and sometimes misused. Boards belonging to organisations of all sizes need to understand how AI can be transformational as well as the risks and costs associated with implementing it.
What will AI change?
Gartner reports that 55% of all organisations plan to incorporate AI into some part of their business by 2020/21. This is a transformation in full-swing that is expected to touch every part of industry and business. The Harvard Business Review identifies seven areas where AI has already revolutionised many organisations:
– Automating routine accounting tasks, such as matching invoices to payments
– Using chatbots to answer simple consumer questions
– Creating recommendations on e-commerce sites
– Supporting & automating lead generation and lead management
– Automating and improving digital marketing
– Improving cybersecurity by identifying risks
– Identifying inefficiencies in processes and operations
Therefore, AI is not something on the horizon. The data revolution is happening and artificial intelligence technologies sit at its heart. Boards have to respond or risk either being left behind or misusing this new technology.
What are the costs and risks of AI?
From automatically recommending product B to every customer who bought product A, to fully automating production lines, AI could change the way businesses run themselves today and plan for the future. To say AI comes without risks, however, would be naïve.
AI is data hungry. Its outputs are directly tied to the data it is fed. Therefore, if an organisation doesn’t invest time in understanding the problems they are trying to solve with AI, what type of data they need and the correct way to structure that data, they may find that artificial intelligence doesn’t seem very bright at all.
AI also requires training. The algorithms at the core of many AI technologies need to be told what ‘good’ looks like, which means there’s a ramp-up period where AI’s results are poor. Finally, like humans, AI is never right 100% of the time. Mistakes will be made.
However, that shouldn’t justify avoiding AI.
The time-savings, improved customer experience and new insights will more than make up for the risks and challenges.
CFOs and shareholders alike should be especially interested in how they are using AI to turn their organisation into a more profitable and efficient one.
Nor should companies avoid AI due to a belief that it will decimate their workforce. Many industry thought leaders believe that AI will cause the workforce to increase. Deloitte’s research concluded that between 2001 and 2015, technology displaced over 800,000 UK jobs but it had created approximately 3.5 million new ones.
Drawing on historic experience, many believe that automation will remove repetitive, task-based roles and free up a lot of the workforce to focus on higher-value, more fulfilling roles that require the creativity and problem-solving ability that is natural to humans and foreign to computers.
Our conclusion? AI is a disruptor.
It allows us to improve our current methodologies and enables new approaches to achieving organisational goals.
AI is a risk mitigator.
When data is used effectively, organisations can better understand their customers’ wants and needs. This allows data-led innovation, de-risking a lot of investments.
AI is an improver.
It unlocks data so that organisations can more effectively understand the financial states of suppliers, geo-political and geographical risks, supply-chain sustainability and many other areas of an organisation. This allows precise improvements, ensuring that return on investment is maximised.
AI is a source of growth.
By forecasting revenue or bad debts, organisations can take action earlier. They can also use AI to track market trends, attract and retain better talent, and grow and maintain their customer base.
The AI revolution cannot be ignored by anyone in an organisation, least of all by board members, who have the power to replace emotion-led decisions with powerful, data-led decisions that could transform their business.