As more and more companies are implementing AI, more risks have become apparent: namely the AI-savvy competitors who are leaving others behind. At the same time, opportunities are there to cut costs and boost revenues.
Artificial Intelligence has been one of those “overnight” successes that actually took years to become a household name. Perhaps it’s the method some companies have used to integrate AI into their very being that has offered it success. Consumers use AI daily probably without realizing it—Gmail, Facebook, Amazon, to name a few.
While many companies latched onto the idea of AI early, and have figured out how to leverage AI to boost revenues and cut costs, other businesses are not so lucky. In fact, AI laggards could be hazarding business survival. A pitfall of the technology is not AI per se, but being left behind by competitors. That’s because it poses many challenges that businesses behind the AI curve haven’t been able to overcome—yet.
For those organizations wondering if the risk of implementing AI is worth the reward, there are many success stories that show how it can cut costs and boost revenue. Who doesn’t want that?
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Finding Talent
One of the biggest hurdles to getting a handle on AI is finding the talent to run it, reported the IBM Institute for Business Value. In 2016 a little more than 40 percent of more than 5,000 survey respondents reported that “availability of skilled resources or technical skills” was a barrier to implementing AI. By 2018, that figure had risen to 63 percent.
That there is talent squeeze in AI is hardly news. Indeed, about four out of five global CEO surveyed by PwC in 2019 identified “skilled shortages” as a key concern, up from just half in 2012.
To find the talent they need, some companies are raiding academia, others are poaching from other companies or industries, and some are trying to upskill existing labor forces, or all three, reported PwC. To put it bluntly, companies are hiring talent by any means necessary to pursue AI-enabled positives, such as cutting costs.
Cutting Costs
AI-enabled cost cutting is spreading rapidly from the early-adopters to a broader range of industries. For example, packaged-food companies have been slow to adopt AI, but are now seizing upon the technology to increase the efficiency of ordering product from vendors, reported the advisory service Bain & Co.
A Bain client had been bedeviled by excessive perishable food waste, at “five times above the industry average,” resulting in a $100-million annual loss, compared with an industry baseline. Bain found that the company norm of manual-forecasting and subsequent-ordering from vendors was not only labor-intensive, but consistently resulted in production-line surfeits of fresh food. The company created an “advanced model platform to forecast demand more accurately,” explained Bain. Then, a new order-management system was installed, dovetailing with the demand model. The new system showed a 40- 50 percent reduction in waste, as well as a 50 percent reduction in dedicated labor hours, according to Bain.
Of course, cutting costs is one way to fatten the bottom line, and another way to boost the top-line, or revenues.
Revenue
There is a maturing marketplace in AI-enabled software or services in the advertising and sales space, particularly with the advent of the online economy and communications systems. With large retailers like Walmart gravitating to the digital space, the use of AI in boosting marketing and sales has become mainstream.
The general idea is to track both individual and demographic consumer behavior, and target marketing accordingly. But with persistent AI-talent shortages, some companies are finding outsourcing AI-enabled digital-marketing is the right approach.
In one example, a manufacturer of industrial equipment, tools, and parts used in construction or buildings was not previously tracking customers, let alone proactively seeking sales. To boost sales without an increase in the size of the marketing staff, it implemented an AI platform to more accurately direct advertising and outreaches.
The manufacturer now automatically tracks weather events, such as flooding and hailstorms, that can be expected to generate demand for parts and maintenance for building heating, ventilation and air-conditioning equipment. Existing customers in targeted areas are automatically contacted and queried, not only by geography but by type of products previously ordered.
Revenue
There is a maturing marketplace in AI-enabled software or services in the advertising and sales space, particularly with the advent of the online economy and communications systems. With large retailers like Walmart gravitating to the digital space, the use of AI in boosting marketing and sales has become mainstream.
The general idea is to track both individual and demographic consumer behavior, and target marketing accordingly. But with persistent AI-talent shortages, some companies are finding outsourcing AI-enabled digital-marketing is the right approach.
In one example, a manufacturer of industrial equipment, tools, and parts used in construction or buildings was not previously tracking customers, let alone proactively seeking sales. To boost sales without an increase in the size of the marketing staff, it implemented an AI platform to more accurately direct advertising and outreaches.
The manufacturer now automatically tracks weather events, such as flooding and hailstorms, that can be expected to generate demand for parts and maintenance for building heating, ventilation and air-conditioning equipment. Existing customers in targeted areas are automatically contacted and queried, not only by geography but by type of products previously ordered.
Natural Intelligence
Naturally, executives want to avoid expensive new technology snafus, and many may recall installing new software, or “customer interfaces,” or robot assemblers that fell below expectations. Early adopters sometimes win, and sometimes not.
The good news is that AI, in real-world business implementation, is getting more thumbs up. Nearly half of survey respondents admitted that availability of appropriate or effective AI was a snag in 2016, but that number had been cut to under one-third by 2018. Executives “have shifted their attention from worrying about whether to adopt AI (availability of technology) to…how to adopt AI.”
In any event, the use of AI will become increasingly a part of global commerce in marketing, in customer service, in finance, in manufacturing, in health care and nearly every other sector.
Today’s executives must ponder the right way to implement AI, whether by training in-house staff, hiring, or outsourcing certain AI functions. Companies that are AI-enabled to win sales and cut costs are well-positioned for the markets of the present and the future.
What Is AI?
For modern commercial applications, AI is often defined as systems that understand, learn, and interact by building knowledge and stored information. Plus, AI often refers to systems that respond to natural spoken or written language and interact effectively with human beings. AI systems usually have some, if not all, of the characteristics of human cognition, such as speech, pattern recognition, decision-making and learning by experience.
