According to the report released by ResearchAndMarkets in July 2019 (Artificial Intelligence Market Report: Trends, Forecast and Competitive Analysis), the global Artificial Intelligence (A.I.) market is expected to reach $71 billion by 2024 with a CAGR of 26% from 2019 to 2024. The major drivers for this market are increasing demand for virtual assistance for easy accessibility of services and growing adoption of cloud-based technology.
Closer to our day-to-day life, we begin to interact more with automated machines (both physical robots or software robots), chatbots, intelligent marketing predicting your purchasing patterns and recommending products to you without your solicitation. The progress has been so rapid and relentless that it creeps into our lives without even us been consciously aware of it.
As A.I. is changing our personal lives so deeply and rapidly, its impact on the business landscape would have been if not more profound.
We have identified 4 key challenges that A.I. brings about to the world of business competition.
1. Sudden intense price competition
With the relentless pace of automation via technologies like Internet of things (IoT), Robotic Process Automation (RPA), we are going to see costs to produce products and services to drop significantly.
This allows businesses to have a much larger room to adjust their pricing and yet be confident about making a profit. It might trigger some to suddenly drop their prices to win market shares. Businesses who have yet to catchup in automation would struggle to hold on to their customers in such sudden change in price competition.
2. Setting new heights in customer expectations
A.I. allows the replication of a human brain processing power (Data Science) that can analyze extremely complex conditions and produce options quickly for decision making.
One example is that logistics operations optimized with data science can have predictive ability to find best route, storage facilities, optimal regulatory clearance, reroute as quickly to make goods delivery much faster than before. We are now seeing “same day delivery” and “overnight delivery” seems like yesterday’s trend. The impact extends across industries in shorter to launch to market time, material sourcing etc.
Customer expectations would increase and the bar is raised for the rest of the product & service providers. Such changes are often unpredictable and the rest of the industry players have little room or time to react.
3. Personalized Products and Services
With global technology giants like Google, Microsoft driving A.I. technologies to businesses via algorithms or A.I. building blocks from their cloud platform, it makes A.I. adoption much cheaper and accessible to even small medium businesses. It would allow businesses to harness the benefits of A.I. to offer products and services in a more personalized form and enhance their ability to cross-sell which is otherwise not possible without hefty labor costs.
One example is the chatbots, traditionally rule based chatbots are not able to understand language contexts or communicate with users. With Natural Language Processing, chatbots would be able to really chat with the users to deliver personalized customer interaction experience.
Technologies like Facial Recognition also enhances personalized services. Personalized approach has always been undeniably the winning formula with customers and helps businesses distinguish themselves from competition.
We have seen many small startups with brilliant ideas take over the market swiftly and displaced many long time industry leaders (Think: Airbnb, Grab). They leverage on emerging technologies most often in the A.I. to fill market unmet needs with innovations. There is no way to predict when and where and how they would appear.
Businesses who are more open to innovation and working with emerging technologies have better adjustment ability in the world of disruptors. Disrupt or be disrupted!
The speed of A.I. changes the business landscape and are eroding the competitive advantage of even successful businesses. It makes those who do not adopt A.I. vulnerable.
Hence, is there a choice to adopting A.I.? I think the answer would be “Just do It”!
What can Business do?
There are certainly steps that successful businesses can take to navigate the dawn of the A.I. and ride on the wave of A.I. to continue their success journey. We have identified four key areas that businesses can consider:
1. Start Automating
Automation technologies are plentiful, two key ones that businesses can explore are:
(a) Automation of back-office processes via Robotic Process Automation (software robot)
RPA is essentially a software robot that does mundane repetitive tasks like data entry, document processing etc. It is fast to implement and flexible to configure to your needs.
By automating your back-office processes you can look forward to faster turn-around time for order processing, response to customers, better accuracy, improvement in productivity and lower costs. It is also a technology where you can grow into cognitive in nature by embedding A.I.
(b) Connecting your devices (sensors, automation devices etc.) onto Internet of Things (IoT)
IoT can significantly reduce operating costs when automation devices, sensors and actuators become Internet-enabled devices. New Enterprise Manufacturing Intelligence technology (EMI) could bring manufacturing-related data together from many sources for reporting, analysis, and passing such data to related systems like Enterprise Resource Planning (ERP). The streamlining greatly enhance response time, optimal manufacturing and device maintenance.
Automation certainly allows businesses to higher flexibility to response to higher customer expectations and sudden intense price competition. Automation is also often the first step towards an A.I. roadmap due to its easier to understand logic based function and its close relations to business processes.
2. Building an innovation culture
A.I. is new to most organizations especially traditional businesses. To bring A.I. into the business is often strategic and revolutionary to the people working in the organization. The further the business is from the world of technology, the bigger the shock factor. It doesn’t help that there are plenty articles on theinternetthat paints a negative picture on A.I.
To successfully drive A.I. and an innovative culture in your business, it takes a good amount of change management. It is important thatinnovation is strongly embeddedto all the pillars of the business - management, organization, process, technology and performance measurement.
With a vibrant innovation culture, adoption of transformation like A.I. adoption can be strongly embraced to ensure its sustainability and success in the organization.
3. Creating the right governance for your A.I. adoption
Our world has been keep running in an orderly manner with governance. In every industry there are regulators that ensure that quality, safety, ethics and fair play are uphold.
Similarly for a transformational technology like A.I. to be an integral part of your business, therehas to be rules and boundaries for it to operate in the way it is intended. Without the right governance in place, business units might be hesitant to adopt A.I. not knowing how to control it. We have seen organizations plunge ahead into A.I. without thinking about governance and end up going into compliance and audit issues. The remediation is often costly, cumbersome and deflates the enthusiasm towards A.I.
Creating the right governance allows the organization to harness the benefits of A.I. without it running foul with internal controls and external regulations.
4. Working with a trusted partner in your A.I. journey
A.I. encompasses many areas of technologies that are fast evolving and there are large arrays of products to consider, it can be confusing to businesses that are not close to the emerging technologies sector. And most often we hear from business leaders commenting “There are so manythings out there where do we start?”, “I’m not surewhat is suitable for my business”, “How can I be sure I am adopting the right technology and moving in the right direction?” etc.
Yes, A.I. is an ocean of emerging technologies. There are a large number of industry specific enablement and generic enablement that businesses can leverage on to enhance their ability to compete in the market. The journey does not stop after implementing one technology, it continues and evolves as the organization rides wave of A.I.
To have a good sounding board and advisory on how to navigate the A.I. technologies to adopt the most suitable for your organization, it important to work with a competent and trusted partner that understands your business to partner you in this journey.
Visionary physicist Prof Stephen Hawking has once warned the world the danger of A.I. and it is also not a phenomenon that we could put a stop. The best we can do is to embrace it and from our collective strength as humans drive it in the right direction that would benefit mankind now and the future from our actions through our businesses and as individuals.