How Artificial Intelligence is Reshaping Businesses

By Callum Furmidge

Artificial intelligence (AI) is typically defined as the ability of machines to perform human-like cognitive tasks. From this definition, it seems intuitive that organisations should be looking to use AI in order to improve decision making.

The use of AI can be seen in many industries. AI is being used by financial services companies to serve customers better and detect fraud; by healthcare providers to diagnose illnesses and identify more effective treatments; by manufacturers to streamline supply chains; and by city authorities to track and mitigate challenges such as traffic, pollution, and crime. Using AI to analyse data can help organisations to identify these potential improvements, as AI can process and analyse data quicker than humans can. For example, in supply chain management, contextual analytics can draw on enterprise resource planning data, which companies use to optimise inventory levels, predict product fulfilment needs, and identify potential backlogs. Of course, the context is crucial, in the supply chain case, the context includes supply chain benchmarks, an understanding of the component stages of a business process, and the knowledge of where process bottlenecks can occur. As such, companies can use data and analytics to provide a great deal of information to managers and by using AI, they can improve on the quality of data analytics as opposed to humans.

AI Market Adoption
As the power of AI has increased, so has the global adoption of AI. Firms are beginning to realise the benefits of combining human power with AI to complete a wide variety of tasks in order to increase efficiency within businesses, as illustrated by the global corporate investment in AI from 2015 to 2021.

Fuelling this increase in investment is the realisation of businesses that they can create positive ROI from implementing these new technologies. The ROI greatly depends on the size of the company and their experience with AI. Generally, more mature companies with greater familiarity with AI will see higher ROI and shorter payback periods. A 2020 survey showed that companies are gaining value in five main ways from AI implementation: higher productivity, increased customer satisfaction and retention, improved employee engagement, improved profitability, and new products and services.

Market Map
The market map below provides an overview of certain subsectors within the field of AI, including machine learning, healthcare, personal assistant, manufacturing, and warehouse automation. In the machine learning subsector, algorithms and statistical models are utilised to enable computers to improve their performance on specific tasks through experience. The healthcare subsector is utilising AI to improve patient care and treatment, from aiding in the diagnosis and treatment of diseases to streamlining administrative tasks. AI-powered personal assistants are becoming increasingly popular and offer users the ability to schedule appointments, set reminders, and perform a variety of tasks through voice or text commands. The manufacturing subsector is utilising AI to increase efficiency and accuracy in production processes, and the warehouse automation subsector is utilising AI to improve efficiency and accuracy in warehouse operations through the use of robots and other automated systems.

M&A Activity within AI
Mergers and acquisitions in the artificial intelligence space are becoming increasingly common as companies look to acquire AI technologies and expertise to improve their operations and stay competitive. For example, in 2021, Apple acquired Voysis, an Irish AI start-up that specialises in natural language processing technology for virtual assistants. This acquisition is expected to help Apple improve the capabilities of its virtual assistant, Siri. Another example is Intel's acquisition of Habana Labs in 2019, a company that develops AI processors for data centres and autonomous vehicles. This acquisition gave Intel a strong foothold in the AI hardware market and access to Habana's team of AI experts. In 2020, Salesforce, a customer relationship management company, acquired Slack, a leading collaboration and communication platform. This acquisition allowed Salesforce to integrate Slack's messaging and collaboration tools into its customer relationship management platform and also gave Salesforce access to Slack's AI capabilities.

In conclusion
Overall, AI is having a profound and wide-ranging impact on the world. The potential for AI to replace human decision making in settings where their predictive performance can lead to more accurate results and improved organisational outcomes can be seen in various organisational functions, such as supply chain management, forecasting, and revenue management among others. As it continues to evolve and advance, it is likely to change the way we live and work in even more profound ways. While there are certainly challenges and concerns associated with the development and use of AI, there is no doubt that it is a technology that has the potential to revolutionise our world.

Sources

• Halevy A., Norvig P., Pereira F. (2009) The unreasonable effectiveness of data. IEEE Intelligent Systems 24(2):8–12. 
• Deloitte. (21, October 2020). ROI from AI: The importance of strong foundations. Retrieved from Deloitte: https://www2.deloitte.com/uk/en/insights/industry/technology/artificial-intelligence-roi.html
• Stanford University. (01, 05 2022). Artificial Intelligence Index Report 2021. Retrieved from Statista: https://www.statista.com/statistics/941137/ai-investment-and-funding-worldwide/
• OpenAI ChatGPT