The number of enterprises implementing AI has grown a staggering 270% in the last four years and has tripled in the last twelve months, according to Gartner’s 2019 CIO Survey.
Despite this leap in use, AI is in its formative years. “We still remain far from general AI that can wholly take over complex tasks, but we have now entered the realm of AI-augmented work and decision science — what we call augmented intelligence,” adds Howard.
AI has the potential to make complex business issues easier, delivering practical and engaging solutions and opening up new business models. IDC forecasts cognitive and AI spending will hit $52 billion by 2021, achieving a compound annual growth rate (CAGR) of 46%. “Interest and awareness of AI is at fever pitch. Every industry and organization should be evaluating AI to see how it will affect their business processes and go-to-market efficiencies,” says David Schubmehl, Research Director Cognitive/AI Systems at IDC.
Opening the enterprise doors to AI
IDC estimates that by 2021, 75% of enterprise applications will be using AI in some form. This includes everything from predictions, recommendations and advice to fully automated customer service agents and intelligent process automation.
Enterprises are seeing cognitive AI technologies – such as machine learning and deep learning – as a way of re-inventing their business and as a platform for transformational business models in an increasingly competitive digital economy.
Retail is leading the advancement of AI – according to IDC – with a whole range of business model uses, including intelligent expert shopping advisors and highly personalized product recommendations. Banking, which is running second to retail in the AI race, is concentrating its efforts on automating threat intelligence and prevention, fraud analysis and personalized advisors. Healthcare is primarily looking at AI in diagnosis and treatment systems. But opportunities exist in every industry.
Digging through the data
AI has made big data a hot topic and has opened up new mining streams for data that can be used to engage customers. One major retailer, for example, has used AI for targeted customer engagement instead of randomly pushing products on promotion.
“Using AI, this major global supermarket chain is now engaging in highly personalized dialog as the same products don’t have the same value for everyone,” explains Ada Sekirin, CEO, Europe at Business & Decision, an Orange Business company. “The retailer has 300 predictive models running in parallel, calculating billions of opportunities to communicate the right message to the right person at the right time.”
AI has untapped scope when it comes to unformatted photos and video. “Soon we won’t just be storing imagery, we’ll be making sense of it. Machine algorithms will really understand what is going on in videos and photos and turn them into actions,” explains Sekirin.
This has huge potential in the music and entertainment industry, for example, where automatic content recognition through AI and machine learning (ML) will drastically cut down the time it takes to manage, process and re-purpose vast archives of video assets. The creative processes around promotional trailers can be speeded up using AI to identify the sections of most interest to an audience.
In addition, AI can be used for video compliance checks in different countries, identifying objectionable language or violence, for example. This reduces manual effort and significantly cuts operational costs.
In the fashion industry, AI makes it easier for retailers to sell complete outfits online. With many tens of thousands of items of clothing and accessories on sale and frequent changes each season, it would be challenging for someone to manually tag all items shown in a photo to enable one-click purchasing. AI provides the ability to automatically recognize all the SKUs (stock keeping units) featured in a photo to make the customer’s buying journey quicker and easier.
AI will also help tighten collaboration between IT and business units. As the amount of data that organizations have to manage grows, so will issues such as ineffective problem prioritization schedules, for example. With a shortage of AI skills, automation will be the answer. Gartner maintains that by 2023, 40% of IT teams will be using AI-augmented automation in large enterprises to realize higher IT productivity, agility and scalability.
AI business model possibilities
AI can help with a number of flavors of business model innovation. AI can provide a shift from simply selling a product to selling performance. Gazing into the future, we could see the emergence of car tires that can detect changes in the road surface and change the tread accordingly. Goodyear, for example, is developing tires with embedded sensors that can do just this.
AI can eliminate the layer between original equipment manufacturers (OEMs) and consumers. The consumer registers the appliance, such as a heating boiler, for example, and the OEM gets data about its usage and health status. This allows the OEM to offer new services such as predictive maintenance. Getting data to analyze directly from consumers can also drive new data-driven businesses, such as insurance policies based on driver behavior. This is a service Orange Business is enabling for boiler manufacturer elm.leblanc, through our IoT and data platform.
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There is also the possibility that enterprises could sell their intelligence to other companies in their sphere. Consumer electronics companies could provide utility companies with data to help them better forecast demand, for example, in line with local data privacy regulations.
“Data is only useful if it creates real value, and we can act on it,” explains Sekirin. Take the Port of Antwerp, which is the second largest in Europe, for example. Here, Business & Decision is analyzing signals that boats are emitting to better predict when boats will arrive in the port. Based on these predictions, boats can be efficiently directed to avoid bottlenecks. At the same time it can analyze meteorological conditions with chemicals in the air to identify any boats that are causing pollution in the waterways.
The intelligent enterprise
AI is a huge game changer. But while freeing us from repetitive tasks, how will it impact the workforce of tomorrow? Sekirin believes that these new business models will also spawn new jobs. “New jobs will appear, although we don’t know what they will be yet. We will invent new professions that don’t exist today,” she concludes.
To learn how to use the power of AI and data to transform your business, download our ebook, Smarter Data Management for AI-enabled Business Success.
Jan has been writing about technology for over 22 years for magazines and web sites, including ComputerActive, IQ magazine and Signum. She has been a business correspondent on ComputerWorld in Sydney and covered the channel for Ziff-Davis in New York.