Recent technological advancements paved the way for Artificial Intelligence (AI) to be integrated into our daily lives. Innovations in the field have greatly disrupted the business landscape, changing consumer behavior, and redefining customer service.
According to the 2019 report of the U.S. think-tank Centre for Data Innovation, AI is applied in 32% of Chinese businesses. Meanwhile, in the EU and U.S., AI application is at 18% and 22%, respectively.
As businesses become more competitive, there is a proportionate increase in the demand for AI to help simplify complex tasks. AI is used to answer FAQs and provide targeted ads.
But when it comes to important matters, especially where money and lives are at stake, can we leave decision-making to AI?
This article will attempt to shed some light on that question.
Artificial Intelligence and Machine Learning
Artificial Intelligence (AI) is a branch of computer science that allows machines or computers to mimic human intelligence through data, logic, and algorithms. In simpler terms, Artificial Intelligence is like having a mind inside a computer that understands and does human tasks.
AI assists in the functioning of today’s spam filters, email categorization, and search engines. It allows users to easily access and maintain information.
On the other hand, Machine Learning (ML) is a subset of AI. It enables computers to learn from experience through large amounts of data without the need for explicit programming or coding tasks. Therefore, machine learning improves and increases computer accuracy by repeated exposure to relevant experience.
Despite this, learning is not left to machines alone. Computers still need humans to operate them, especially when they encounter errors that are beyond their algorithms.
What is Decision Intelligence?
Driverless vehicles such as Tesla and Argo AI, and smart speakers, like Amazon’s Alexa, Apple’s Siri, and Google Assistant are examples of AI applications. Personalized recommendations from online selling platforms also count as Decision Intelligence.
Data and AI have helped businesses and humans reach optimal decisions, whether it’s tactical, operational, or strategical.
In the business sector, brands are already deploying conversational AI chatbots on their websites to increase sales by interacting with customers. These chatbots provide instantaneous customer support, thereby delighting customers with engaging user experience.
People find AI smart searches useful too. When individuals look for specific products online but have typed it incorrectly, AI provides suggestions based on relevant past activities and search patterns. This enables customers to locate products easier and faster.
How Companies are Leveraging AI Decision Intelligence
While Amazon has implemented AI to give recommendations based on consumer behavior, rival firm OTTO forged ahead by adopting an autonomous replenishment function.
In a case study by Blue Yonder, it was revealed how OTTO enhanced customer experience by using predictive algorithms. Automating decisions resulted in predictions with 90% accuracy on products that will be sold within 30 days while overstocked inventory levels reduced by 20%.
Similarly, a study by Mirko Kremer and Stefan Minner looked into human biases in inventory decision making. Where human work is implemented, prior personal experience and gut feel form the basis of a decision. The same decision is reached through data and algorithms by computers, only faster.
According to the researchers, one wrong decision of a person may not be considered detrimental to business operations. However, when collective decisions are a few points less than optimal, consequences are catastrophic to overall costs and efficiencies.
With AI, you can arrive at sound decisions fast and conveniently. The more sophisticated the technology gets, the more trust in AI is given. In fact, 64% of employees are already more confident with AI than their managers.
Latest Statistics and Forecasts on AI
Currently, the business climate has highlighted the growing importance and relevance of AI. Obtaining technological leverage emerged as the top reason why AI Investments grew 6 times since 2000.
In fact, due to the enthusiasm of implementing AI into their organization, enterprises increased 62% more on their budget compared last year.
This infographic from Finances Online sheds light on recent findings on Machine Learning:
According to Statista, AI funding worldwide continue to reach billions in 2019:
- Machine learning application topped worldwide funding at $28 billion.
- Machine learning platforms come second at $14 billion.
- Smart robots, computer vision platforms, and natural language processing fundings are each estimated to have a funding of $7 billion
- Virtual assistants, speech recognition, and gesture control each received funding of $3 billion, $2 billion, and $1 billion respectively.
Businesses utilize machine learning in the following tasks requiring important decision-making:
- Risk management
- Performance analysis and reporting
Further, public demand for AI is at an all-time high as 97% of mobile users now utilize voice assistants.
AI applications greatly improved efficiency as businesses look for ways to do more with less effort:
- It saved Netflix $1 billion in costs.
- It shortened the amount of Amazon’s shipping time to 15 minutes.
- 87% of companies that are now using AI intend to incorporate it in sales forecasting and email marketing.
Forecasts state that AI technology will increase productivity by 40% in 2035. It is predicted that by 2021, 80% of up-and-coming technologies will utilize AI. In the next three years, it is estimated that AI assistant markets alone will be valued at $18 billion.
Are You Convinced to Trust Artificial Intelligence Now?
Although the benefits are clear, growing reliance on AI is met with concern from some.
Scaling up machine learning is the most cited challenge faced by people in 2020. More often than not, machines cannot easily react to unfamiliar data, especially syntax errors. They are dependent on experts with technical knowledge and skills to create algorithms that can make a computer understand and solve high-stake problems.
Moreover, people are worried about how AI can impact their professions negatively. Some are afraid that there will come a time when machines will become more intelligent than humans. Others raised alarms on hackers that continue targeting websites for customer information.
Increasing human trust is therefore crucial for the future of AI technology. A study suggests that computers persuade people more when they speak like one. Further, researchers have developed a tool to help increase human trust in AI.
Data transformation enables AI and ML models to deliver accurate and quality results. Additionally, continuous monitoring and enhancements address bugs and make for impenetrable security measures.
7 AI Best Practices to Develop a Better Decision-Making Proficiency
Incorporating AI into your business gives you the upper hand. Specifically, the technology promotes better decision making by performing the following:
#1. Managing tasks in a consistent and reliable manner
Artificial Intelligence is good at managing multiple and repetitive tasks. It also eliminates decision-making fatigue and produces quality outcomes.
#2. Providing cost-effective service
Running algorithms to perform tasks traditionally done by humans is the cheaper option. It drives employee productivity while reducing overhead costs.
#3. Analyzing data fast
AI organizes data much faster than humans. It scans through millions of data points quickly to guide judgment. This way, professionals can analyze and extrapolate values on consumer behavior.
#4. Eliminating human subjectiveness and doubts
For businesses, important decisions like distributing stocks, balancing price levels, and promoting products are traditionally made based on a combination of gut feel and experience. Using AI and ML takes the uncertainty out of the picture as every decision is backed with statistics and data.
#5. Creating safer environments
AI detects malicious activities such as phishing, cyber breaches, and others. It also deters attacks from outsiders, ensuring secure digital environments.
#6. Giving users the power to choose
Many forms of AI, such as those utilized in the medical field, do not decide for themselves but instead provide users with information and recommendations. This empowers people to make better decisions.
#7. Allowing people full control of the machine
While developments are underway for self-thinking robots, overriding humans is far from happening and should be the least of our worries. Computers are man-made, and therefore only execute instructions it receives from people. In any case, computers allow humans to modify AI when necessary.
Artificial intelligence is already an integral part of businesses and our everyday lives. With the help of large scale data and algorithms, AI is the future of complex decision-making.
Investing in AI streamlines business operations and processes. Its applications in automation, decision-making, and others are cost-effective and scalable.
The attributes of AI make it possible for machines to learn from experience, adjust to modified inputs, and perform tasks as a person would. However, it still requires human intervention to address problems they cannot solve in real-time.
How do you feel about AI? Let us know in the comments!