The pace of development in artificial intelligence (AI) technology is so fast now that it seems as if a tsunami of innovation is ready to crash upon the business world, altering, in their wake, not just our operations and decision-making but, potentially, our very organizational structures. AI’s capabilities are what companies are trying to use more and more these days. It’s really important to think about what profitability AI can bring to the table. The reason is that there’s a lot of AI promises companies are making that we have yet to see realized, and unfortunately, many of these promises are just not going to hold water. What we’re counting on are those efficiencies gained for real, and for that efficiency to have a snowball effect that builds with each iteration. Sophisticated computations and machine learning techniques can be used by businesses to get things done better. Algorithms profitably pare away at most aspects of commercial life, from operational efficiencies to strategic decisions, with company leaders constantly pushing for a tech-centric “space” between the human and the routine—where the company’s edge over a competitor might be naturally gained.
Relying on the idea that AI has the potential to be an incredibly forceful tool, companies that decide to start using this technology can expect an enormous payoff in how much more efficiently they can run their core businesses. Of course, running any kind of business is a tremendously complicated affair. But it’s all the more so when what you’re really doing is coordinating the movements, decisions, and utterances of people in order to get a product or service delivered. And it’s here where companies can expect AI to come in and start making a major impact on their bottom line. In addition, AI technologies are extremely good at handling a huge amount of data in a very short time and with a very nice precision that is often not matched by humans. This kind of precision is important in reducing errors in tasks such as predicting very complex financial problems, maintaining a lot of different inventories in a lot of different places, and in managing customer service interactions that can often go wrong because of the slightest slip-up. On top of that, the competitive advantage that derives from these advances in AI is huge. Having come through a phase of predicting the weather—now with a lot of accuracy—companies fitted out with the most predictive advanced analytics “machines” can anticipate future market and consumer behavior better than their rivals, too. The text you provided is already well-written. But here’s a possible rephrasing: Indications are that by 2025, AI will produce almost $90 billion in profit (Wamba-Taguimdje et al., 2020). This suggests that investing in AI infrastructure not only leads to improvements right away but also pays off with long-term growth and sustainability. In an increasingly competitive marketplace, it is necessary to let those operations be performed by AI, not just by people seeking enhanced versions of current profits.
Building upon the idea that AI can greatly improve operational efficiency, it is also necessary to consider how AI can boost the decision-making process, a key driver of profit margins due to its effect on both accuracy and foresight. According to T. Anderson, May 2021, the fast analysis of big data by AI allows businesses to make well-informed decisions with a level of precision previously unattained. Moreover, AI can help businesses create a sustainable competitive advantage by identifying market trends, optimizing pricing, and developing new products (all negatively or positively impacted by the first two of the four scenarios mentioned earlier). Additionally, Lindsey Stokes suggests that AI’s power of prediction will determine the business world’s future. Precisely forecasting the caprices of consumers seems an impossible task for any human. Americans, for instance, may simultaneously and with equal determination trend toward multiples of opposite extremes. Will those purchasing patterns extend into the future? And how will accurately anticipating them affect the bottom line? Increasingly, these questions are being answered by AI. And increasingly, businesses that do not make AI the cornerstone of their consumer research can be expected to fall behind (Stokes, 2021). The integration of AI into businesses is about much more than automating work. It’s part of a movement to convert decision-making to data-driven methods. It’s about understanding risks and taking actions in the face of risks. And it’s about finding opportunities to increase profitability, by doing work that leads to revenue generation and by doing it more efficiently. It’s about making businesses more competitive in an environment in which lots of other businesses are doing the same sort of thing. When we look at it like that, we can see the vital importance of getting AI right.
AI technology offers numerous advantages to operational efficiency and decision-making. In terms of competitive advantage, you can’t talk up AI’s role enough. Companies that integrate AI successfully into their business models gain a strategic upper hand. Think of AI as manning the cantaloupe-laden front porch of the firm, understanding the ebb and flow of market demographics, and using predictive analytics and precise machine learning techniques. One way that AI is being used very effectively is in the performance of predictive maintenance. By using AI-enabled tools, it has become possible to forecast in fairly accurate terms when a piece of equipment is going to fail and do so long before the actual breakdown occurs. When this kind of forecast is possible, then you have events that can be planned for and scheduled with a great deal more convenience and a lot less downtime. In some industrial circumstances, this is already proving to be a huge cost-saver and a near-miraculous way to almost completely eliminate the kind of on-the-fly cobbled-together solutions that have been all too common. Moreover, customer relationship management is made better by artificial intelligence. This is because AI can look at “big data” and find patterns that humans simply cannot. From these patterns, AI can then predict how the customer behaves in certain situations. And when AI can do this, it is much easier for marketers to tailor their strategies and campaigns to what the customers want and need—again, in a way that is much more effective and ingratiating than if a human were to do the work. These advances in technology have certainly given us an edge over our competitors in the market. Our market share is secure, and we are using the bench strength of the AI team to work on opening new doors for us in new markets. AI is allowing businesses to finely tune their operations and strategies so that they are not just a little better but a lot better than what they were doing before. And they are doing it across the board in their operations, from the frontline to the back office. The result? Creditably improved profitability.
To sum up, the very fast improvements made in artificial intelligence technology are certainly changing the way businesses work and make decisions. They are doing this in no uncertain terms. They pay off in big “P” Profit (as in “the bottom line”) for the savvy businesses that are smart enough to incorporate them into their frameworks. And this rapid change is facilitated by two other elements that are quite unique to our time and place: the efficiency gains that AI brings to our current computer architectures and, crucially, the super-giant profits that a tiny handful of American companies have made (which are, in so many ways, not without controversy). AI systems’ precision lowers mistakes in crucial operations and gives firms and other organizations much better capabilities to predict, well, just about everything. In addition to optimizing what companies already are doing right, these better insights into what consumers want and are likely to do give companies a leg up. They can set more appropriate strategies on what to develop and deliver next. Plus, compared to simply lowering prices in response to a competitor doing so, firms can maintain healthier margins by setting strategies that increase consumers’ willingness to pay. At the end of the day, adopting artificial intelligence is not just a value add, but a must-have strategy for businesses that want to achieve success in today’s rapidly changing marketplace. As companies in various industries push forward with AI at the helm, it’s imperative that they consider the ethical implications and regulatory frameworks needed to properly corral AI’s power and potential. This means that businesses that are smart about the way they use artificial intelligence will not only make a good profit right away, but they’re also the ones that are likely to show a lot of growth over the longer term as technology keeps moving forward.
References
Wamba-Taguimdje, S. L., Wamba, S. F., Kamdjoug, J. R. K., & Wanko, C. E. T. (2020). Influence of artificial intelligence (AI) on firm performance: the business value of AI-based transformation projects. Business process management journal, 26(7), 1893-1924.
Anderson, D. (2021). Artificial Intelligence Implementing AI for your Business. Estalontech.
Ahmed, A. A. A., Agarwal, S., Kurniawan, I. G. A., Anantadjaya, S. P., & Krishnan, C. (2022). Business boosting through sentiment analysis using Artificial Intelligence approach. International Journal of System Assurance Engineering and Management, 13(Suppl 1), 699-709.