We all live in the digital era, with many innovations easing both our daily lives and business activities thanks to Artificial Intelligence (AI). In this article, we tried to cover a few major points which benefits can digital mind bring to us all and how we may profit from the synergy effect of introducing AI for industrial purposes.
The good old Artificial Intelligence is directly connected to Data Science which is, if put shortly, the field of study aimed at gaining business value from arrays of data. This value may consist, for example, in expanding the capabilities of forecasting, awareness of regularities, justified decision-making, etc. In a narrower sense, we may say that AI is algorithms and methodologies for information processing. Artificial Intelligence operates with huge arrays, analyzes input data and develops adaptive solutions based on them.
Artificial Intelligence finds its use in various fields, including marketing and business. As the PwC forecast suggests, AI will be accountable for a 26% GDP increase in some countries, against the growth of the global economy by almost $ 16 trillion. So, how are modern digital technologies used in the world market? What can a smart algorithm do for you and which results can you expect from it? What information should you feed it with? How can the use of artificial intelligence in business give your prevalence over your competitors?
Application of AI in Business
New AI innovations can quickly bring virtually any business to a whole new level, since this is basically one of its key purposes. Let’s consider a few main issues you can tackle using machine learning algorithms.
In some business areas, the fundamental condition for success is to quickly analyze incoming data and promptly respond to it, for example, in exchange transactions. Unlike conventional algorithms that are unable to independently adapt to new conditions and data without prior learning, artificial intelligence can ensure such an opportunity.
Development of Marketing Strategies Based on Available Data and Business Goals
Artificial Intelligence helps marketing experts in their work: not only it analyzes the experience of previous sales, but also uses forecasting to predict future ones, as well as takes into account the behavior of competitors and the general situation in the market.
Even the most professional and experienced employees can have bad days and make wrong decisions. Artificial intelligence can’t, since instead of emotions it has functions, and technology and information replace mood swings.
Self-learning neural networks help analyze user behavior and identify suspicious transactions, as well as create algorithms to prevent financial losses. As a result we see that the system becomes less vulnerable which is a key condition for customer trust.
Improved Profit Margins
The introduction of machine learning into the pricing system alone can provide a 5% revenue growth, and with a comprehensive approach, company revenues can grow several times.
Artificial Intelligence and Business Processes
With the help of AI, businesses get almost unlimited access to new opportunities for expanding activities and increasing profits. Even one algorithm can significantly improve performance, and an integrated approach all the more gives good results.
This is only a small part of what AI is capable of. Of course, human can also solve all the above tasks, but it will require much more time, resources and efforts. At the first stage, investments are also needed to develop a self-learning system, but in the future, its assistance in processing large amounts of data is invaluable.
Some business segments have changed with the advent of artificial intelligence, for example:
Machine learning algorithms replace call centers and help you complete tasks such as providing customer assistance and information around the clock, on holidays and weekends. A smart program learns from its own mistakes and eventually surpasses a living operator in competence. At the end of the day we see a significant increase in customer loyalty, creating a positive image of the company.
AI collects, systematizes, analyzes and stores company information, makes forecasts on its basis and/or monitors equipment status.
The self-learning algorithm takes care of regular routine tasks and frees up human resources to solve more creative tasks. For example, the program can fully automate hotel and conference room reservations, sending out invitations to meetings, buying airline tickets, and drawing up routes. Thus, the entire administrative sphere can be handed over to artificial intelligence. Automation existed before, but its scope was limited.
Unlike artificial intelligence, a person cannot be completely impartial and objective. In addition, for a reliable forecast, you need to process a significant amount of data, and the computer does an excellent job in this regard.
Introduction of AI in Business
Handling of AI occurs in several steps. The first and main step is that the company needs to collect as much relevant information in recent years as possible (here we talk about DataSet). Fortunately, with the introduction of online logs, registries, etc., this information is saved automatically, and the system is synchronized with them in just a few clicks, with no manual input required. Sometimes you can do with a mere systematization of existing information, although, of course, in some cases you will have to spend more time and effort.
The development of self-learning algorithms will require financing and time, however, the business sphere will affect the degree of expenses. For example, retail chains can take advantage of ready-made solutions, rather than create a recommendation algorithm from scratch. One of the functions of such systems is to increase revenue. On average, AI pays off after three months of use, and then begins to generate net profit due to significant cost optimization and increased sales.
Examples of Artificial Intelligence in Business
Input: franchise stores have introduced a loyalty system (Frequent Guest Card) and special promotions during happy hours. However, the effectiveness of these offers is not being in any way measured, while profits show a moderate increase.
Solution: a self-learning program analyzes the history of customer loyalty card purchases, using data for several years, chooses the best reward system for each buyer. If the buyer has not been interested in promotions and discounts, AI sends him or her other notifications, for example, a description of the range of products or the date of sale of his or her favorite goods. Buyers who have shown the interest in the happy hours promotion are informed by the computer about the best deals and when the next promotion starts. Also, the store may send personalized SMS messaging.
Result: timely informing increases customer loyalty, as well as both profit and margin.
Input: Enterprises that work with food products should monitor their shelf lives and charge them off in a timely manner. For example, in bakeries the sales period for baked goods is mainly one day, with up to 30% of products charged off daily. Our task is to reduce losses, but not the range, as buyers want to have a wide selection of what to buy.
Solution: the use of artificial intelligence may enable us to predict demand for the next 3–4 days, with the prediction accuracy reaching 90%. All that is required is to analyze data from the 1C accounting software over the past two years and train the algorithm.
Result: Thanks to the forecast, the enterprise can optimize its operation processes, reducing the amount of discharged baked goods to 15% and without altering the range. After the problem is solved, one of the positive side effects will be a reduction in the consumption of raw materials and an increase in the margin.
The use of artificial intelligence is gradually becoming a necessity in all business sectors. The only question is who will introduce modern technology among the first and get a quick result, and who will catch up at the very end, to at least just stay on the market. According to McKinsey research, Data Science has a significant impact on marketing and sales, and market analysts strongly recommend the introduction of artificial intelligence today.