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In the rapidly evolving digital era, businesses are constantly seeking ways to stay ahead of the curve. One of the most transformative forces in this pursuit is Artificial Intelligence (AI).
Applied AI, in particular, is revolutionizing the way businesses operate, offering new opportunities for growth and efficiency. This article delves into how applied AI is catalyzing business transformation and maximizing returns.
AI’s pervasive presence in discussions contrasts sharply with its actual value delivery in enterprises. Despite popular belief, successful AI adoption is limited, with Gartner’s 2022 report noting only 54% of AI projects reach production, a marginal increase from 53% in 2019.
This reality breeds skepticism among business leaders who have invested heavily in AI without seeing expected results. To effectively harness AI’s potential and achieve meaningful ROI, organizations are advised to shift focus from generalized AI to more targeted, applied AI strategies in 2024.
Understanding Applied AI
Applied AI refers to the practical application of artificial intelligence technologies to solve real-world problems in business and other areas. Unlike theoretical AI, which focuses on research and the development of AI technologies, applied AI is about implementing these technologies in practical, real-world situations.
Despite initial skepticism about its value, AI remains crucial in enterprises, necessitating a strategic shift rather than a reduction in its use. A survey by OneStream Software of 800 finance leaders indicates a strong belief in AI’s future role in financial processes. The focus is shifting towards Applied AI, which provides specific, pre-built AI solutions for defined business needs.
This approach is particularly efficient and cost-effective, addressing use cases like demand planning, revenue forecasting, anomaly detection, and task automation – all vital in the context of the current accounting talent shortage. Applied AI not only streamlines operations but also offers critical insights for risk reduction, opportunity identification, and improved decision-making, proving to be a valuable asset in modern business environments.
Key Areas of Impact
Enhancing Customer Experience: AI-driven chatbots and personalized recommendation systems have changed the way businesses interact with customers. These tools provide a tailored customer experience, improving satisfaction and loyalty.
Streamlining Operations: AI algorithms are adept at optimizing supply chains, predicting maintenance needs, and automating routine tasks. This not only reduces operational costs but also improves efficiency.
Data-Driven Decision Making: AI excels at analyzing large datasets to uncover insights that would be impossible for humans to find. This capability enables businesses to make informed decisions, reducing risks and capitalizing on opportunities.
Innovative Product Development: AI plays a crucial role in product development, from the design phase to testing and deployment. This leads to more innovative products, meeting customer needs more effectively.
Applied AI advantages: speed and accuracy
Applied AI brings significant advantages to various industries, with speed and accuracy being two of its standout benefits:
Speed: Applied AI solutions are designed to execute specific tasks or processes quickly and efficiently. They can analyze vast datasets, make decisions, and perform actions in real-time or at a pace far surpassing human capabilities. This speed is invaluable for tasks like processing transactions, detecting anomalies, or responding to customer inquiries promptly. Businesses can operate more efficiently and provide faster services to their customers, leading to improved customer satisfaction.
Accuracy: AI systems, when properly trained and deployed, exhibit a high degree of accuracy in their tasks. They can perform repetitive and complex tasks with precision, reducing the likelihood of errors that can result from human fatigue or oversight. In sectors like healthcare, finance, and manufacturing, accuracy is critical for making informed decisions and ensuring compliance with regulations. Improved accuracy leads to better outcomes, reduced costs, and enhanced risk management.
These advantages of speed and accuracy make Applied AI a valuable tool for businesses seeking to optimize operations, enhance customer experiences, and make data-driven decisions. Whether it’s automating routine tasks, analyzing large datasets, or predicting future trends, Applied AI’s ability to deliver rapid and precise results can have a transformative impact on various industries.
Illustrative Applications of Applied AI
Retail Revolution: AI’s Impact on Inventory and Customer Service
In the retail sector, the implementation of AI has triggered a revolution. Two key areas where AI has left a lasting mark are inventory management and customer service:
Inventory Management: Retailers have long grappled with the challenge of maintaining optimal inventory levels. Excess inventory ties up capital, while insufficient stock results in lost sales and frustrated customers. AI algorithms have transformed this landscape by predicting demand patterns with remarkable accuracy. Retailers can now optimize inventory levels in real time, ensuring products are available when and where customers need them. This not only boosts sales but also frees up capital that can be invested elsewhere.
Customer Service Transformation: AI-driven chatbots and virtual assistants have redefined customer service in the retail industry. These intelligent systems provide round-the-clock support, answering queries, resolving issues, and even making personalized product recommendations. The result? Enhanced customer satisfaction and loyalty. Shoppers receive instant assistance, and businesses can handle a higher volume of inquiries efficiently. It’s a win-win scenario.
Healthcare Revolution: AI’s Role in Transforming Healthcare
The healthcare industry has witnessed a profound transformation with the integration of AI into various facets of its operations:
Predictive Diagnostics: AI-powered diagnostic tools have elevated the accuracy and speed of disease identification. Machine learning models analyze vast medical datasets to identify patterns and anomalies that may not be apparent to human practitioners. This enables early disease detection and more precise treatment plans, ultimately saving lives.
Personalized Treatment Plans: AI algorithms consider an individual’s unique medical history, genetics, and lifestyle factors to create personalized treatment plans. This approach maximizes treatment effectiveness while minimizing side effects. Patients receive tailored care that acknowledges their specific needs, leading to better outcomes and improved quality of life.
Streamlined Administrative Processes: Administrative tasks can be a significant burden in healthcare. AI-driven automation simplifies appointment scheduling, billing, and insurance claims processing. This not only reduces administrative overhead but also ensures that healthcare professionals can focus more on patient care. Administrative processes become more efficient and cost-effective.
In both the retail and healthcare sectors, AI has proven to be a transformative force, enhancing efficiency, improving customer/patient experiences, and driving positive business outcomes. These case studies underscore the potential of AI to revolutionize industries by addressing specific needs and challenges with precision.
Challenges and Considerations
While Applied AI outperforms Generalized AI in terms of ROI, there are lingering challenges to consider:
Trust Issues: Business leaders harbor doubts about AI-driven outputs due to past disappointments with Generalized AI. Lack of transparency and alignment with business values were common issues. Applied AI’s purpose-built functionality addresses these concerns by accelerating ROI.
Transparency Solutions: To regain trust, teams can enhance transparency in data and outcomes from Applied AI models. Collaborating with technology partners to understand model composition and conducting scenario testing can demonstrate accuracy. Seek embedded, purpose-built AI for specific departments to facilitate consumption and analysis.
Employee Training: Implementing AI is a top challenge, with 32% of finance leaders citing it as such. Partnering with tech providers offering training materials and best practices can address this issue. Purpose-built Auto AI can support skills development with built-in workflows and guidance.
Data Privacy and Security: While not the primary concern, it remains significant. Sharing confidential data with Generalized AI tools raises security risks. Purpose-built LLMs and GenAI tools with robust security can integrate with existing systems, allowing users to query curated data without exposing sensitive information, thus adding necessary safeguards.
The Future of Applied AI in Business
The future of AI in business looks promising. With advancements in AI technology, businesses are expected to find new and innovative ways to apply these tools, leading to further transformation and growth. Applied AI is not a mere trend; it’s a transformative force that can reshape your business.
Embrace it to accelerate growth, drive efficiency, and navigate the complex landscape of modern commerce. Shift into high gear with Applied AI and lead your industry with confidence.
The future of AI is promising as leaders increasingly see its advantages in enhancing team productivity, collaboration, and achieving business goals. However, organizations face the dual challenge of demonstrating ROI while controlling spending in today’s economic climate. To address this, consider applied AI and software vendors integrating it into existing applications to boost productivity and solve practical business challenges.
Applied AI solutions offer a path to maximize ROI and gain predictive insights, enabling profitable growth. With purpose-built AI functions, businesses can transition into a new phase, seizing the opportunities that come with it.
Conclusion
Applied AI is not just a buzzword; it’s a catalyst for significant change in the business world. By embracing AI, companies can enhance efficiency, innovate faster, and deliver superior customer experiences. The key to success lies in understanding the technology, its applications, and the challenges involved in its implementation.
As businesses continue to explore the potential of AI, they are set to embark on a journey of transformation that promises substantial returns on investment.
