AI can transform Industries
Artificial Intelligence (AI) has the potential to transform and make profits for firms including multinational corporations, startups and government institutions. AI has the potential to deliver attractive returns if implemented at scale. It has multiple implications and can shape various functions in different sectors. Digital native companies like Amazon, Google and Facebook have received tremendous returns and have achieved their targets. Their operating costs have reduced to a great degree by the incorporation of AI in some form or the other. Another impressive example is how Netflix incorporated the algorithm to improve recommendations and suggest content to its users. Only by improving their search results Netflix has been able to avoid a loss of $1 billion annually from cancelled subscriptions. Firms that have adopted AI are expecting greater returns in the future. It is quite evident that adopters of AI have significantly larger marginal profits than firms that haven’t adopted AI but at the same time it’s not true for every firm. A lack of strong digital starting point, lack of sincerity in adoption of AI or lack of strategic posture are enough to produce less impressive results. This holds true that technology cannot ensure competitiveness, it is merely a tool in the hands of the firm. The serious AI adopters expect that their investments would pay adequate dividends in the future and their margins would increase by about five points in the next three years.
There are diverse areas in which AI is expected to have the potential to create value. One of such areas is projection and forecasting. AI can help businesses understand patterns and devise new strategies that are more precise and promising. Businesses can provide better analysis of their supply chain and anticipate better results in future by providing better offerings in accordance. The benefits of AI in demand are also manifold. Demand can be forecasted and only products in demand can be stocked, as a result the waste would be minimised. The trends would help identify the future prospects of any product and how the taste and preferences of individuals might change. Health systems can also use this technology to prevent severe disasters and epidemics. The advantages of forecasting are much more in retail and AI can be exploited to the benefit of the firm. Reducing waste and identifying the trends in demand and supply become all the more imperative for electric utilities. If the waste generation is reduced in some way it would benefit the environment also greatly. With an aim to maximise renewable power and cut down natural energy use by 10 percent, National Grid in the United Kingdom is collaborating with Deepmind, an AI startup to predict variations of supply and demand in relation to the weather related variables. This technology can also be used to briefly switch off appliances like air conditioners as it can quite easily forecast the levels of consumption. The supply chain leaders are increasingly realising the need for machine learning in forecasting for accuracy and better results. Forecasting and data analysis is not a new strategy, but it hasn’t been carried out with such precision as can be through machine learning. Machine learning doesn’t only focus on previous data but also incorporates various variables like prices, local weather forecasts etc to study the effects. It largely affects the flexibility and can reduce the inventory levels due to its precision.
Another use of AI can be in the research and development, it can help researchers in assessing a prototype and its chances of success in the future. The researchers and engineers often face challenges in terms of demands and distribution of products, primarily due to the emerging changes in customer preferences. Budget constraints also demand increase in efficiency and precision of prototypes. Another sector in which AI would be highly useful for R&D would be the health sector, as it’s not surprising to note that US alone spends about $160 billion annually in the sector. Innovations can be easily brought to the market and the waste can be efficiently minimised through AI as more efficient design methods can be devised. It can assumed that AI replaces human beings by machines but it is not entirely true for every situaiton. In some countries and some firms, AI can complement labour and as a result improve efficiency and productivity. Artificial Intelligence can undoubtedly play an important role in transforming businesses by increasing the efficiency, optimizing the assets and the process and significantly improving the reliability. The AI enhanced robots can be programmed to recognise shapes and sizes and react accordingly. This is different from the traditional robotic behaviour as in the past robots were only programmed to follow predefined instructions and identify specific objects. With the use of Artificial Intelligence, robots can now incorporate autonomous systems and can interact with their environment. This automatically leads to better speed and more responsiveness to any stimuli. Robots can identify different shapes even if they are not in predefined positions and can manage to react accordingly.
AI is equally useful in improving team work and better aligning members in a firm to maximise productivity. It can also help in increasing the efficiency of classes by analysing data from profiles of students and form classrooms that are more compatible and suitable for their personality. Apart from increasing efficiency, reducing costs and enhancing productivity, AI also has the potential to minimise errors and as a result yield better outcomes and precise strategic methods.
AI can also create value by enhancing market offerings at the targetted consumers at the right price. It can help firms take monetary decisions as the supply and demand changes and how to maximise profits by analysing the trends and data on consumer behaviour. Another aspect in which Aritificial Intelligence can help is by enhancing user experience. It can make it more attractice, simpler and convenient. Improvising user experience has advantages in every sector, even in education and healthcare. Treatment decisions can be made through the collective date analysed through machine learning and since it is becoming more and more evident that standardised treatments do not work for anyone and largely depends on a person’s medical history and genetics. Some companies are already using AI to provide personalised results to users. In the teaching sector too, AI holds great potential as it can be used to improvise the learning techniques catering to each individual since everyone does not learn the same way either. AI truly has the potential to transform industries and yield impressive results in every sector but it largely depends on a firm’s strategies and perspective towards Artificial Intelligence and the use it is put to, the flexibility stands undeniable.
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