Adopting Artificial Intelligence (A.I.) - Is there a choice?
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.