Top Five Ways AI Is Transforming Business

Artificial intelligence (AI) isn’t a new concept–Alan Turing published his paper outlining the Turing Test, which measures computer intelligence, in 1950. However, advancements in the field of AI were few and far between for decades because we didn’t have the computing power and raw data needed to create usable applications.¹

With advances in our ability to store, transfer and compute massive amounts of data, we now have the infrastructure in place to create effective artificial intelligence technologies in business. Currently, there are almost 80,000 companies developing AI technology.² These include machine learning and deep learning technologies. According to the global consulting firm McKinsey & Co., adoption of AI by organizations has risen from 50% to 72% in the past year.³

Much of today’s business leaders’ newfound interest in AI can be attributed to recent breakthroughs in the capabilities of generative AI—the technology that creates new content based on patterns in training data. The majority of business leaders are optimistic about the power of AI, with three-fourths predicting it will disrupt their industries in the near future.³ The growing impact of AI is evident in numerous sectors, from finance and healthcare to retail and manufacturing. Understanding AI’s transformative effects can help you navigate this rapidly evolving landscape and harness its potential to propel your career forward.

This article will explore AI usage in business and how it’s changing daily operations and strategic planning.

Generative AI can automate routine tasks that would otherwise be time-consuming and labor-intensive, such as data entry and scheduling. Automating these low-level tasks frees up humans to work on high-value tasks that AI can’t complete, such as those that require empathy or complex problem-solving.⁴

Some specific examples of artificial intelligence use in business include customer service, software development, and knowledge work. AI technology can significantly increase the efficiency of workers in these industries-studies have shown that when knowledge workers use generative AI, productivity increases by 40-50%.⁵

Increases in productivity are closely tied to decreases in expenses, although AI drives cost savings in other ways as well. AI can cut expenses by reducing human errors and optimizing areas such as delivery logistics and supply chain management. For example, Amazon uses AI to find the most efficient delivery route for packages.⁶

Businesses can also reduce labor costs by using artificial intelligence to streamline operations. For instance, a retail company using AI for inventory management can drastically cut down on the costs associated with overstocking or under-stocking products.

AI is essential to big data processing and improved decision-making.

Artificial intelligence in the business world is inextricably tied to the rise of big data. The ocean of data we generate by conducting business and pleasure online provides fodder for training machine learning models and raw material for data mining insights.⁷

Processing this big data quickly and accurately would be nearly impossible without AI. Artificial intelligence technologies in business can analyze vast amounts of data at lightning speed, uncovering patterns, trends and insights that would otherwise remain hidden.

AI systems such as machine learning algorithms, deep learning and natural language processing (NLP) are essential for big data analysis. Tools like Apache Spark and Hadoop are commonly used for big data processing, allowing businesses to manage and interpret their data so they can use it for strategic business decisions.⁸ This capability is particularly beneficial for sectors like finance, healthcare, and marketing, where data-driven decisions are crucial.

The ability to process and analyze big data translates directly into improved decision-making opportunities transforming businesses. AI-driven analytics empower businesses to base their strategies on comprehensive, real-time insights rather than gut feelings or outdated information. This data-driven approach leads to more accurate forecasts, better resource allocation and, ultimately, superior business outcomes.

AI-driven data analysis leads to more informed and timely business decisions, which can greatly impact outcomes. AI can rapidly sift through customer feedback, social media interactions and transaction records to provide valuable insights for more informed business decisions. Real-world examples illustrate this beautifully. In retail, companies like Walmart use AI to optimize inventory management and predict customer demand, which allows them to reduce costs and increase sales.⁹

At the same time companies are using AI to grow their customer base, they’re also using it to create more individual and personal experiences for each customer. By analyzing customer data, AI can tailor marketing messages, product recommendations and even website content to individual preferences and behaviors. This level of personalization not only enhances the customer experience but also drives engagement and loyalty. This is a trend many consumers now consider to be the norm, with 71% reporting they expect personalized interactions when they deal with businesses.¹⁰

AI creates personalized customer experiences by analyzing user data and preferences to tailor recommendations and interactions. For example, Spotify’s AI-driven recommendation engine curates personalized playlists for users to increase user retention and enjoyment.¹¹ In retail, e-commerce platforms employ AI to suggest products that align with a customer’s past purchases and browsing behavior. These personalized experiences make customers feel valued and understood, leading to higher satisfaction and repeat business.

In customer support, AI technologies provide immediate, 24/7 assistance, handling common queries and issues without human intervention. This results in faster response times and improved customer satisfaction. Incorporating AI into customer service strategies allows businesses to handle a higher volume of inquiries efficiently. For example, a telecommunications company might use AI chatbots to assist with troubleshooting, billing inquiries and plan changes. This not only reduces the workload on human agents but also ensures that customers receive prompt and accurate assistance

AI chatbots and virtual assistants like Bank of America’s Erica are providing high-quality customer experiences. Erica handles over 2 million client interactions daily, helping with tasks such as monitoring subscriptions, providing spending insights, and assisting with money transfers. This AI system improves customer relationship management and efficiency by resolving common inquiries quickly so the human workforce is able to address more complex issues.¹²

Since the 1970s, with the advent of Just-in-Time inventory, businesses have recognized the value of optimizing their inventory to avoid waste. AI in predictive analytics takes this concept to the next level by forecasting market trends and consumer behavior so businesses can proactively adjust their inventory. By analyzing large datasets of past data, AI uncovers patterns that help predict future market dynamics and customer actions.¹³ Being able to anticipate market changes, customer needs and emerging opportunities is crucial to stay ahead of the competition.

A retail company might use AI to predict shopping trends based on seasonality, economic factors and consumer behavior. This foresight enables better inventory management, targeted marketing campaigns and more precise demand forecasting. Similarly, financial institutions leverage AI to predict market movements, guide investment strategies and minimize risks.

AI’s other predictive analysis capabilities extend to risk management, helping businesses identify and mitigate potential threats before they materialize. Predictive analytics helps financial institutions detect fraudulent activities by identifying anomalies in transaction patterns, so they can intervene and prevent theft. In healthcare, predictive analytics can assess patient risk, so providers can treat problems earlier and develop personalized treatment plans for better patient outcomes.¹⁴

Artificial intelligence in the business world gives leaders the information they need for strategic planning and decision-making. AI-powered business intelligence (BI) tools such as Tableau allow businesses to analyze vast amounts of data, uncover patterns and generate actionable insights.¹⁵ For example, an automotive company might use BI to analyze consumer preferences, competitor strategies and market trends to develop a robust product launch plan. The result is a more strategic, informed approach to business growth and development.

By improving efficiency, enhancing decision-making, and fostering innovation, AI gives businesses a competitive advantage. AI tools can identify patterns and trends that might not be immediately apparent to humans and provide a clearer understanding of market dynamics and internal performance. Businesses can use this insight to make data-driven decisions that are more accurate and timely.¹⁶

AI also helps in diagnosing business performance issues by analyzing historical data to determine root causes and drivers, so leaders can engage in more informed short and long-term planning. The ability to process and analyze data at this level by leveraging AI provides businesses with a significant edge so they stay ahead of competitors with agile and responsive strategies.¹⁶

AI is transforming business in profound ways, from automating routine tasks and enhancing data analysis to improving customer experiences, utilizing predictive analytics and supporting strategic decision-making. Professionals who understand and embrace AI will be well-positioned to excel in their careers and contribute to their organizations’ success.

Today’s business problems are complex and multi-factorial. They require leaders who can think creatively and critically, using all of the tools they have available to solve problems and improve the efficiency of business operations. William & Mary’s Online MBA will equip you with the skills and knowledge you need to solve difficult challenges that don’t have easy answers.

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