QUESTION
- Artificial intelligence (AI) is rapidly transforming various industries. How are businesses incorporating AI into their strategies?
- Explore the reasons businesses are adopting AI. Consider factors like increased efficiency, cost reduction, and improved customer experience.
- Analyze different ways businesses are using AI. This could involve automating tasks, personalizing marketing, or developing new products and services.
ANSWER
- Reasons for adopting AI
One of the main reasons why businesses are utilizing AI in their operations is to increase efficiency. AI is very good at executing monotonous tasks at great speeds. For example, an AI program can go through many pages of documents or data sets which would be a time-consuming task for a human. In most situations, the introduction of AI is not intended to replace all the roles that people play. Instead, it is to make the work that we do more efficient. When AI is utilized to automate lower-value tasks, it elevates the work of the employees when they can focus on higher-value activities such as strategic planning and decision-making. In the McKinsey’s global survey, about half of the respondents said they sought to use AI to allow employees to focus on more strategic and creative work. Businesses are also adopting AI to reduce costs. When processes become more efficient, this naturally leads to cost reductions. For instance, with the use of AI, businesses can accelerate the time it takes to complete a process, which means less operational cost. It is said that by automating just 12% of the tasks, the finance and insurance companies could see a 20% average increase in cash flow. No wonder why in the same McKinsey’s survey, two thirds of the respondents are saying that they are at least supporting one AI priority, by which cost is the most important. Last but not least, AI technology is also being employed to enhance the customer experience. For instance, using AI such as natural language processing to tailor customer interaction, it helps to generate better customer satisfaction. In the survey, it suggests that two out of five companies which have successfully incorporated AI have seen an increase in customer satisfaction of at least 10%. AI has a lack of bias and it can be used to continuously learn and deliver more personalized marketing towards customer, compared to a fixed traditional marketing strategy which may be less effective. As such, it is no surprise to see such a growth from the latest Marketing Automation post that within the marketing industry, adoption of AI is on the rise and more and more marketers see the value of using AI.
1.1 Increased efficiency
Increased efficiency. Efficiency refers to the accomplishment of processes with the least waste of time and resources. This is a critical element for any business. Increasing the efficiency in the processes can lead to a faster development and saving costs. AI is exceptional at finding insights because of the utilization of algorithms to find designs or connections. So as to increase the efficiency of procedures, AI must find important deficiencies through information and produce different alternatives to consider. For instance, the Grid, a start-up, just requires a site and an portrayal of the work that the client needs to put an AI site producer into movement. The Grid would then be able to pull together a few viable sites for them to survey, each made by various ways that the AI formulated. This spares masses of time that’s spent by individuals on really creating the site. Not as it were does this work show up less demanding and quicker, but it’s less expensive as well – removal of perplexity when selecting the ultimate strategy could be a key reason for employing AI for a handle as UI plan and genuine utilize of the item is regularly subject to individual feeling.
1.2 Cost reduction
Moving on from conventional methods and to support the idea of continuous improvement, the introduction of AI technology for cost reduction is proving a popular option amongst businesses. AI is not here to replace the workforce, but it is to provide process optimization, enhanced decision making, and certainly reducing inefficiencies in many operations in order to cut down the costs. Therefore, businesses in all industries and of all sizes should start considering changing to an AI-based, smart, and cost-effective operating model in order to achieve their full potentials and as well as keeping competitive in the future.
Last but not least, AI-powered automation is going to help businesses save a significant amount of money as manual work and human errors could be minimized. Businesses can leverage AI to remediate many issues and create better workflows, to avoid repeating the same processes and eventually eliminate costs from much of the manual work that caused by human errors. The upfront cost of implementing AI can be quite high, from purchasing the AI technologies to installing and testing and eventually making sure they work correctly in our businesses. However, the cost saving that is possible in the long term would far outweigh these. As a result, businesses could be more powerful in finding profitable opportunities and focus on innovations that drive business forward instead of wasting resources on other operations.
Another example that AI could help in reducing costs would be robots. Robots have the capability of continuously running during the day and night without the need to stop for breaks, sleep or even holidays. By installing robots, it will not only help in saving costs through non-human wages, but it’s also increasing productivity to run processes at a much longer time and more efficient way where errors are minimized due to the reduction of human interferences.
Besides, the rise of predictive analytics which utilizes AI technology will also help in reducing costs. Nowadays, we could find different kinds of predictive analytics tools in the market that are designed to make predictions on certain outcomes, for example from key trends to customer behavior and many more. By performing the predictions from historical information and knowledge of the key variables that are affecting an outcome, it will help businesses to adapt in an efficient way which eventually reduces costs through improved efficiency.
The most important thing in managing a business is to achieve maximum results with minimal expenditure. By trying to cut down as much as possible on unnecessary costs, it will help us to save in every area of the P&L. For instance, businesses could save costs from task and process-based works which are currently performed by humans. With the adoption of AI, machines could actually complete the same tasks and processes as humans do, but in a much shorter time. And meanwhile, the costs are largely reduced for paying wages as the laborers are not required to perform these tasks anymore.
Section 1.2 Cost Reduction
1.3 Improved customer experience
Use is highly important, technological improvement, expertise strategies, customer relationship, higher customer satisfaction, and customer feedback in the content for the improved customer experience. First of all, customer satisfaction is identified by three elements which are market share, customer value and customer retention. In order to improve customer satisfaction, customer feedback is set as the most important feedback for the company. Tesco collects customer feedback in many methods. For example, Tesco collects feedback when customers are making payment at the cashier. Also, it has an online customer opinion questionnaire and Tesco will offer discount if customers complete the survey. Last but not least, Tesco has a Service Department where customers can write in their feedback. These feedback will be analyzed and improvement will be made on the respective areas. Moreover, with the absolute importance of customer’s value, Tesco has utilized methods to gain long term customers. For instance, a clubcard scheme has been used to retain customers. This clubcard scheme can help to track the customer’s purchasing records. By understanding what customers need, Tesco is capable of doing a better job in customers’ retention. Also, Tesco offers point schemes in certain period. Results from Tesco shows that 60% of the total sales were from clubcard customers. This shows how important is customer value to Tesco and how Tesco manages to maintain a good relationship with customers. On the other hand, high customer satisfaction not only brings in long term customers but also lower the chance of customers switching to other retailers. Many researches showed the normal error rate in data entry is from 1% to 10%. However, Tesco claims that the error rate for the clubcard information (Gabbott, M. and Hogg, G. 2007) provided by customers is relatively low. This is because customers are required to submit their personal particulars. Such first hand accurate information surely will benefit Tesco in studies which require personal data.
- Ways businesses are using AI
2.1 Task automation
2.2 Personalized marketing
2.3 Developing new products and services
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