While giant firms are leading the AI race, where do the traditional companies stand today?

In today's world, technology leads business and these are not just any tech but specifically AI and other disruptive systems. We have witnessed how the pandemic accelerated the rapid growth and adoption of these cutting-edge technologies. According to Reportlinker research, the global AI market is projected to grow by USD 76.44 billion during 2021-2025, at a CAGR of 21%.

Artificial intelligence has revolutionized businesses and industries by introducing automation and intelligent business operations. Many giant firms are leading the AI race and competing consistently to enhance their markets.

An article by Marco Lansiti and Karim R Lakhani published in the Harvard Business Review states the example of Ant Financial Services Group and its growth to cross 1 billion users in just five years since inception. Ant Financial is known to be China's most ambitious AI factory that might establish a global digital payment sector soon. Wondering how Ant Group is enabling this massive growth? The simple answer would be data and AI. The tech giant's AI system automatically sets the credit payments, credit decisions, provides financial advice, etc. It basically performed all the tasks in the operating section without any human intervention. This whole system is supported by huge data sources, which is usually called big data these days.

Data and AI Setting the Game

Today's industries are fueled by weak AI that can augment humans, manage and automate key business processes, and deliver intelligent business insights. Data and analytics are the two legs of this system, which keeps it moving. The famous Google AI algorithm uses data collected from its users to customize the systems and deliver a better user experience. Google has successfully integrated AI in all its services and platforms. Another big player is Amazon, which provides AI-assisted personalized product recommendations to its users. The company has kept itself on the competitive edge by efficiently using data analytics, AI and machine learning to enhance its customer service. It is very visible since the platform predicts and anticipates the shipping, customized recommendation based on previous purchases, and other intelligent functions. Amazon has also been leveraging AI robots in its warehouses to aid the logistics and inventory management process.

Apart from these big companies, the social media giants like Facebook and Twitter are also effectively using predictive analytics, data science, and AI to fuel their growth by content personalization, digital marketing, and targeted ads.

Going Beyond the Boundaries

In such a competitive ecosystem, it becomes imperative to adopt and adapt. Are these big players and emerging digital companies posing a threat to traditional organizations? Well, it might look like one but it is high time these conventional businesses stepped up into the digital space. It will be difficult for them to leave behind the legacy systems and get a hang of these disruptive technologies. Traditional organizations have been working with legacy systems, which are usually within the industrial boundary. However, AI is all about transcending this boundary and going limitless. Conventional businesses have always been bound to familiar industries and their resources. Instead, they should expand their reach and embrace data flow from everywhere possible. Data is the most valuable asset in the digital world and industries should exploit its capabilities to enhance their growth. While traditional industries expand their borders, they might also be able to break the silos. The siloed business structure hinders its growth since each internal team has their own data and resources, which is not shared. Thus, getting into the space of disruptive tech demands breaking walls inside an organization and bringing the whole company together. Both development and operations departments should work together to get efficient results along with AI. Traditional organizations should invest in the transformation and restructuring of their operating models to be able to extract the benefits of AI.

The AI-First Approach

In the HBR article, Lansiti and Lakhani argue that there should be an AI factory at the core of a firm, and the four essential components to fuel this are data pipelines, algorithms, experimentation platforms, and infrastructure. This is necessary for digital organizations to be able to leverage the true potential of AI. Better infrastructure for data flow can improve the collection, process, and analysis of data to gain intelligent and predictive insights from them. As they say, building algorithms are not enough since there needs to be a platform where they can be tested and valued.

When algorithms rule the business, it demands intelligent and efficient leadership. AI is a potential catalyst of business growth but it also carries certain risks and bias. Leaders of the new age digital enterprises should be able to make decisions that are supported by the perspective of the whole business ecosystem. Each business decision made in this digital space will have its consequences and leaders are expected to understand the ethical issues, transparency, and cybersecurity challenges before any vital step.