The AI Way of Making the Right Investment Decision: Ensuring Higher ROI
Even while acknowledging that AI application has business risks and some ethical issues
AI is having a long and highly dynamic intervention in almost every conceivable sphere of our life. It is hardly surprising then that it will also play an increasing role in the entrepreneurial domain, especially in business workflows and processes. Every organization seeking to achieve efficiency and effectiveness looks for appropriate business decisions. In the contemporary era, profitable business decisions to a great extent depend on high-tech applications, especially AI. But experience reveals that one cannot do it in a mechanical way. There is, for instance, a clear signal that approaching AI for short-term business capabilities seems to be paying more dividends than leveraging it as a research and development agency. So, the right kind of investment matters.
There is no doubt that in contemporary times there are a plethora of business strategies from which an organization can opt for ones according to its needs. Now we are well into the Information Society and the generation and maneuvering of data have become crucial for the success of any organization. But to repeat, the process of organizational change based on the adoption of new technology cannot be mechanical. Accumulation of mere data does not lead the organization anywhere as information overload is bad for the organization’s health. The AI can come to the rescue here with its up-end software to integrate the solution with the existing business architecture of a specific organization, without disturbing the business process and workforce. The best way to do it is to develop a comprehensive picture of the business process and workflows, rather than adopting what till now has been predominant, a sectoral approach in which an organization is perceived in terms of ‘slices.’ The AI-sourced ‘overall’ picture is being built up with as many components as product and/or service development, manufacturing, service operations, human resources, marketing and sales, supply chain management, risks, strategy, and so forth.
Modern organizations are invariably complex organizations. If the business process and workflows are ‘sliced’ and perceived in terms of separate compartments the outcome has a high chance of getting complicated and futile. AI algorithms are now facilitating organizational management by making available reliable structured reports based on real-time actionable data. Various reports mention that AI adoption is highest within the product-or service-development and service-operations functions.
AI software has become so sophisticated that it is causing the end of the days of trial-and-error methods with extremely precise predictability. AI is at the same time giving rise to ‘smart’ communication with astonishing exactness for the intended users of the organization. With AI reaching such heights in organizational life and its business domain its predictive capacity is also combined with prescriptive capability, which in turn induces organizations to break the glass ceiling. According to a McKinsey’s global survey, published in a report titled The State of AI in 2020, the largest share of respondents reports revenue increases for inventory and parts optimization, pricing and promotion, customer-service analytics, and sales and demand forecasting. More than two-thirds of the respondents who report adopting each of those cases affirm that its adaptation has led to increased revenue. Over half of the respondents who report adopting each of that mention that the use of AI in those areas reduced costs. Such developments have special significance in the post-COVID 19 pandemic world and its transformation imperatives. According to an IBM report, negotiating the disastrous effects of the pandemic AI continues to enable organizations to address urgent and immediate business priorities—quickly and at scale. The report notes that AI improves a company’s cost base—augmenting human capability to motivate greater and more expansive efficiencies. It is also stated to help enhance or protect top-line revenue, experience, and engagement. The report’s six-year data series shows that COVID-19 has accelerated AI’s shift from experimental to widely adopted as a key lever of sustainable competitive advantage and profitability across businesses and industries around the world.
Even while acknowledging that AI application has its risks and some ethical issues, the fact remains that the right investment in AI goes on to benefit an organization.
