AI is having a significant impact on the business world, affecting jobs, workers, firms, and industries
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Artificial intelligence (AI), or technology that is coded to simulate human intelligence, is having a huge impact on the business world. Now prevalent in many types of software and applications, AI is revolutionizing workflows, business practices, and entire industries by changing the way we work, access information, and analyze data.
Key Takeaways
- AI technology promises significant benefits for businesses, including improved customer engagement, data analysis, automation of processes, strategic recommendations, and enhanced decision-making.
- AI can be applied in various business areas such as accounting and finance, customer service, recruitment, cybersecurity, sales and marketing, supply chain and logistics, IT operations, and legal.
- Implementing AI in business is not without challenges, however, which can include ethical and privacy concerns, skill gaps, and integration issues.
- The future of AI for business will necessitate ever more collaboration between governments, businesses, and individuals, as well as further integration of AI into software processes and workflows.
Benefits of Using AI in Business
AI can deliver significant benefits across different departments and business functions. Noémie Ellezam, Chief Digital Strategy Officer of Société Générale, the sixth-largest bank in Europe, describes AI as being “an accelerator” of their digital strategy, “with potential impact across all of [their] businesses and business areas.” Here are some of the advantages that AI can offer businesses.
Improved Customer Engagement and Experience
Tools like chatbots, callbots, and AI-powered assistants are transforming customer service interactions, offering new and streamlined ways for businesses to interact with customers.
Data Analysis and Insights
AI can quickly process large volumes of current and historical data, drawing conclusions, capturing insights, and forecasting future trends or behaviors. All of these can help businesses facilitate better decision-making about customers, offerings, and directions for future business growth.
Automation and Efficiency of Business Processes
AI enablement can improve the efficiency and processes of existing software tools, automating repetitive tasks such as entering data and taking meeting notes, and assisting with routine content generation and editing.
Personalized Recommendations and Targeting
AI can analyze consumer data (such as that captured in a business’s CRM system) to understand similarities in preferences and buying behavior across different segments of customers. This allows businesses to offer more personalized recommendations and targeted messaging to these specific audiences.
Applications of AI in Business
AI can be applied to many different business areas, offering increased productivity and efficiency and promising insights, scalability, and growth. Here are some of the business departments and applications in which AI is making a significant impact.
Accounting
Many accounting software tools now use AI to create cash flow projections or categorize transactions, with applications for tax, payroll, and financial forecasting. It can help reduce input errors, catch duplicate or suspicious transactions, and identify opportunities to save money.
Content Generation
Generative AI can assist in writing, researching, and editing as well as creating graphics, videos, and other media. It can be used for everything from marketing campaigns to business document templates like proposals and presentations. AI can also transcribe and translate language and generate code, providing businesses with quicker, easier, and more cost-effective access to these specialized skill sets.
Customer Service and Support
Chatbots and callbots can offer businesses a way to extend their current customer service capabilities and increase the volume of customer inquiries their team is able to respond to, in addition to freeing up time for customer service agents to focus on more complex cases or interactions. Many AI-enabled call center and voice applications can also perform caller sentiment analysis and transcribe video and phone calls.
Cybersecurity
AI-powered cybersecurity tools can monitor systems activity and safeguard against cyberattacks, identifying risks and areas of vulnerability. It can also help security teams analyze risk and expedite their responses to threats.
IT Operations
The use of AI in IT operations is so widespread that a special term for it was coined: AIOps. AI can be used to streamline data and maintain IT infrastructure, automating tasks like performance monitoring, workload scheduling, and data backups. It offers IT professionals better insights into the root causes of anomalies and errors, allowing them to quickly resolve system issues more quickly as well as anticipate future ones.
Financial Analysis, Trading, and Fraud Detection
Financial departments and businesses can benefit from quick and powerful AI-driven data analysis and modeling, fraud-detection algorithms, and automated compliance recording and auditing. Because of AI’s ability to analyze large, complex datasets, individual and institutional investors alike are taking advantage of AI tools in managing their portfolios. AI can also detect fraud by identifying unusual patterns and behaviors in transaction data.
Human Resources
AI can assist human resources departments by automating and speeding up tasks that require collecting, analyzing, or processing information. This can include employee records data management and analysis, payroll, recruitment, benefits administration, employee onboarding, and more.
Legal
As a profession that deals with massive volumes of data, lawyers and legal departments can benefit from machine learning AI tools that analyze data, recognize patterns, and learn as they go. AI applications for law include document analysis and review, research, proofreading and error discovery, and risk assessment.
Sales and Marketing
Sales and marketing departments can use AI for a wide range of possibilities, including incorporating it into CRM, email marketing, social media, and advertising software. Generative AI can create all kinds of creative and useful content, such as scripts, social media posts, blog articles, design assets, and more.
Supply Chain and Logistics
AI can have a huge impact on operations, whether as a forecasting or inventory management tool or as a source of automation for manual tasks like picking and sorting in warehouses. It can prove useful in allocating resources or people, like drivers, scheduling processes, and solving or planning around operational disruptions.
Challenges and Ethical Considerations For Implementing AI in Business
In October 2023, President Joe Biden released an “Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,” citing AI’s “extraordinary potential for both promise and peril.” In it, he touched on how responsible AI use could help address urgent challenges and increase prosperity, productivity, and innovation – but noted that potential downsides include exacerbating social and societal harms such as discrimination, disinformation, and worker displacement.
Here’s a closer look at some of the important ethical and other considerations around implementing AI in business.
Ethical and Privacy Concerns
The introduction of AI to business applications raises urgent concerns around the ethics, privacy, and security of the technology. Governance of AI technology must consider how to develop and expand current legislation around privacy and data protection, including purpose specification, data collection and use limitations, accountability and security of data storage.
AI also requires human oversight to review and interpret the results it generates and monitor how it is generating them, lest it end up reproducing or worsening current and historical biases and patterns of discrimination. For example, researchers at Carnegie Mellon University revealed that Google’s online advertising algorithm was reinforcing gender bias around job roles by displaying high-paying positions to males more often than women.
Skill Gaps and Workforce Transformation
Although AI can bridge skill gaps, offering workers access to skill sets like coding, translating, and writing, it is also creating skill gaps. As a rapidly advancing and developing technology, training and keeping up with knowledge about AI tools can be a challenge for workers and businesses alike. A 2023 survey of small business owners by Microsoft revealed that only 10% of small businesses with up to 24 employees “know how to use AI for their work-related tasks” while 67% “say they know little to nothing about AI in general.”
There is much concern over worker displacement due to the use of AI technology. MIT economists Daron Acemoglu, David Autor, and Simon Johnson have written about how digital technologies have exacerbated inequality over the past 40 years. However, they believe that the nature of AI’s relationship to inequality is still to be determined, and its impact will depend on how it is developed and applied – particularly, whether it is considered as a complement to human workers or a substitute for them.
For example, AI can be used to bolster skills and productivity as an on-the-job assistant or personalized tutor, and it could even help more people get hired by providing resume writing and editing assistance.
MIT professor John J. Horton recommends that business leaders consider the following before deciding whether to replace human labor with AI: how much time the task would take otherwise; how much the employee who performs the task is paid; whether AI is capable of correctly performing the task; and how easy it is for a human to confirm whether the AI output is accurate.
A 2024 IMF study found that almost 40 percent of global employment is exposed to AI, including high-skilled jobs. The study states that 60 percent of jobs in advanced economies may be impacted by AI, with half of those benefiting from increased productivity and half being affected in a way that could lower labor demand, leading to lower wages, reduced hiring, and, in extreme cases, job disappearance. In contrast, expected AI exposure was lower in emerging markets (40 percent) and low-income countries (26 percent), suggesting fewer immediate workforce disruptions but worsening inequality over time as the technology is adopted more widely.
Integration and Compatibility Issues
Companies who have successfully implemented AI solutions have viewed AI as part of a larger digital strategy, understanding where and how it can be instrumentalized to great advantage. This requires considering how it will integrate with current software and existing processes, especially how data is captured, processed, analyzed, and stored. Another important factor is the structure of a company’s technology stack: AI must be able to flexibly integrate with current and future systems to draw and feed data into different areas of the business.
Future AI Trends and Business Opportunities
As AI becomes ever more integrated into business technologies, it’s possible that the focus will shift away from specific AI-powered apps in favor of general AI assistance built into websites, software, and hardware. For example, Samsung’s Galaxy S24 Ultra has AI built into the phone in the form of a transcript assistant, “circle to search” feature, and real-time translation capabilities.
Adriana Hoyos, professor of economics at IE University, writes that “as technology’s influence endures, collaboration between businesses, governments, and individuals takes on unprecedented significance,” with “collaborating partnerships serv[ing] as incubators of innovation.” One example is Microsoft’s partnership with OpenAI, which aims to responsibly democratize AI and make it more accessible. However, she notes that “governments shoulder the responsibility of recalibrating regulations to harmonize with technological progress.” She predicts that future drivers of job growth will include big data analytics, climate change tech, encryption, and cybersecurity.
Many successful companies are approaching AI with a view to augmentation of current efforts and work, rather than the intention to replace human workers with AI. This future is already expressing itself in the trend of AI-augmented software development, but AI researcher David De Cremer and chess grandmaster Garry Kasparov see a future in which humans work alongside AI in a complementary way, calling it the “new diversity.” This will necessitate leaders who are skilled in creating inclusive teams and bringing different parties together.
Can You Use AI to Start a Business?
AI can be used to generate business ideas, write business plans, and guide entrepreneurs in the steps it takes to start a business. By making time-consuming tasks like coding a website, writing emails, and scheduling meetings more efficient, AI can save entrepreneurs valuable time and allow them to focus their efforts where they matter most.
Can AI Replace the Workforce In the Future?
Analysis of the impact of AI on the workforce holds mixed predictions for the future. A 2024 IMF study found that nearly 40 percent of global employment is exposed to AI; however, whether the technology complements or negatively impacts current jobs depends on the experience and current income of workers as well as the current level of economic development in the country of work.
How Is AI Used In Business Analysis?
AI business analytics tools can offer analysts and decision makers insights derived from large and complex datasets, as well as automation for repetitive tasks, such as standardizing data formatting or generating reports. Predictive analytics can identify future trends and patterns from current and historical data.
How Is AI Used In Healthcare?
There are many applications for AI in the field of healthcare, including analyzing large volumes of healthcare data like patient records, clinical studies, and genetic data. AI chatbots can assist in answering patient questions, while generative AI can be used to develop and test new pharmaceutical products. AI-powered robots could even be used to make surgery less invasive.
What Is The Impact of Using AI in Business?
AI is having a transformative impact on businesses, driving efficiency and productivity for workers and entrepreneurs alike. However, its potential to replace the jobs of human workers remains to be seen.
The Bottom Line
One useful way for businesses to think of AI’s future possibilities is in terms of capabilities, as opposed to technologies. AI can support businesses in three broad categories: automating processes, analyzing data to gain insight, and customer and employee engagement. Firms that apply AI strategically in these ways have much to gain in terms of productivity, efficiency, and potential cost-savings and growth.
However, AI presents challenges alongside opportunities, including concerns about data privacy, security, ethical considerations, widening inequality, and potential job displacement. Researchers and analysts suggest that a collaborative approach between businesses, governments, and other stakeholders is the key to responsible AI adoption and innovation.
Read the original article on Investopedia.