AI leads business. Beware the possible perils.

Uncategorized

Autore: Aldo Agostinelli

Everywhere in the world AI is making businesses faster, smarter and leaner. At least, this is true for the big players. All other enterprises, the small-medium size ones, are partially still struggling: investing into machine learning software and running the risk of not being able to exploit its full potential or wasting time while not keeping up wh the biggest competitors. Read it in Italian

However, in 2017 21,8 billion dollars were spent in mergers and takeovers somehow connected to AI, that is to say 26 times more than in 2015 (data provided by PitchBook). Artificial Intelligence is perceived as a magic wand which can be installed quite easily, but the truth is that it requires a deep knowledge of data, monitoring systems and algorithms to be customized so as to be useful. It is no surprise then, that so far those who have benefited the most from it are techno giants such as Google, Amazon, Alibaba and Baidu, which have been using it to manage robots in their warehousing facilities, optimizing packaging and deliveries, carrying out inventories, identifying forging cases and of businesses believe AI can bring about a significant competitive advantage, at the moment only one company out of twenty is actually using it.

All in all, it is obvious that AI is having a more dramatic impact on business – and such impact is going to be more and more relevant in the future – than ever before. According to McKinsey in the next 20 years, companies are expected to derive annual revenues ranging from 1.3 and 2 trillion dollars from the use of artificial intelligence applied to supply chains and production. Goldman Sachs expects AI to be able to lower logistics costs by 5%, generating extra profits amounting in 25 billion dollars in ten years. Gartner ’s forecast, instead, are that between 2017 and 2021 the overall number of interactions dealt with customer services managed by AI will increase five times, reaching up to 15% in 2019 and at least 40% in 2021.

AI is also helping companies to monitor the way they handle their assets. Most businesses operating in the field of global logistics, including trucks and cargo ships, have always suffered from endemic delays in the delivery of goods. As a consequence, they are investing more on AI and the system is progressively improving and becoming more efficient and easy to track, thus making marketers, suppliers, and customers waiting for those goods much happier (Non-tech businesses are beginning to use artificial intelligence at scale).
AI is currenty redesigning whole sectors and companies divisions, such as finance, human resources, back office and administration. With the passing of time, however, it may destroy some types of jobs to create some others, as foreseen by McKinsey Global Institute think tank (What the future of work will mean for jobs, skills, and wages). This means that managers and advertisers need to keep in mind different time schedules to be keep up with the market but also to act wisely. The purpose of making profits by saving on labour (i.e. employees), if not connected to a reorganization of tasks or to the creation of new profiles guaranteeing advantages to customers may actually backfire in the long run.

According to you, does AI bring about more advantages or disadvantages? Tweet @agostinellialdo.

To find out more on the digital world, you can read my new book: “People Are Media”