With the rise of artificial intelligence (AI), businesses across almost every sector find themselves entering uncharted territory. While still in its infancy, AI offers the potential to transform virtually every aspect of how companies operate.
Brave New World
AI is expected to increase revenue and profits, lower costs, drive improvements in customer service and assist in the creation of innovative new products and services. In fact, a recent survey estimates that AI will contribute roughly $15.3 trillion to the economy by 2030. The effects of AI and its close cousin, machine learning (ML), will ripple across all sectors of the economy, from professional services firms to manufacturers to retailers.
What makes AI so powerful is its ability to automate all manner of business processes ranging from the mundane to the complex. For example, AI can help automate routine transactions, find anomalies in vast pools of data, and accelerate the speed of research and development efforts.
Moreover, AI systems are designed to learn from experience. That is, the more transactions a system encounters and dissects, the greater its ability to handle subsequent transactions.
AI isn’t without risks, however. In addition to the cost of purchasing automated equipment and training staff to use the technology, AI solutions require high-quality data and time to analyze it.
It also takes time for companies to envision the role of AI within their operations, select or build a suitable tool, and provide it with enough exposure to the company’s data to learn and optimize its approach. So, companies tend to be slow to adopt and benefit from AI.
There are additional challenges to adopting AI. With much of their data residing in legacy systems, companies often lack the technical expertise to extract what they need to fuel AI platforms. Furthermore, despite an unprecedented buzz around AI and its transformative nature, many businesses have a hazy understanding of its potential — and its limitations.
Finally, given the secrecy perpetuated by those using AI, companies must embark on a journey of discovery to determine how AI might create value within their environment. Inevitably, failed initiatives can make a company gun-shy when pursuing future investments and cause them to abandon AI efforts before they can achieve their full potential.
Today, many companies are experimenting with AI and ML. But they’re not yet as commonplace as, say, cloud computing. It’s too soon to assess how long it will take for companies to deploy them successfully to improve how they operate. Nevertheless, AI will play an important role in shaping the future of business for the foreseeable future.
If you’re considering AI solutions, contact your financial professional for help crunching the numbers. He or she can help evaluate whether the benefits justify the costs, as well as identify potential pitfalls.
AI in the Real World
How are companies in your industry using artificial intelligence (AI) to improve day-to-day operations? Most people equate AI with robots that replace human workers on the production line, drones that deliver supplies and automated checkouts at retail stores.
However, the most common application of AI is detecting and fending off computer security intrusions in the IT department, according to a recent Harvard Business Review article. Rather than replacing IT professionals, AI systems help employees identify suspicious activity and thwart hacking attempts. In addition, AI systems can help the IT department more efficiently resolve employees’ tech support issues and ensure workers are using technology only from approved vendors.
AI is being used by marketing and sales personnel to analyze customers’ online shopping patterns and recommend similar items or promotions that might be of interest. It also can help analyze transactions to reduce fraud and bad debts.
AI and machine learning (ML) are even being applied in old-fashioned industries like publishing. For example, Associated Press (AP) currently uses automated software to draft thousands of quarterly earnings reports based on digital data feeds from a financial information provider. Rather than replacing human editors, AP’s automated system frees up time for editors to focus on writing in-depth stories on business trends.
Even CPAs are jumping on the bandwagon. During audit fieldwork, don’t be surprised if your auditors use AI to enhance their testing procedures. For example, rather than relying on random sampling to test inventory pricing or revenue recognition procedures, auditors equipped with AI software can analyze an entire population in a fraction of the time.