McKinsey & Company estimates that as much as 45% of the tasks currently performed by people can be automated using existing technologies. If you haven’t made an effort to understand how artificial intelligence will affect your company, now is the time to start.
Artificial Intelligence (AI) is gaining momentum across industries with the help of companies such as IBM, Google, and Microsoft. McKinsey & Company estimates that as much as 45% of the tasks currently performed by people can be automated using current technologies — not only low-level rote tasks, but high-level knowledge work as well.
“Our point of view is that there is no function, no industry, almost no role that won’t potentially be affected by this set of technologies — not just every occupation, but every activity within each occupation,” said Michael Chui, a partner with McKinsey Global Institute, in an interview. “It’s not just automating the labor that’s being done, but the work people do will have to change as well. Understanding how to take advantage of these technologies is going to be critically important.”
Even if your company isn’t actively experimenting with it, AI is finding its way in via online transactions and modern cyber-security systems, among other examples. As AI technologies and their use-cases start to take hold across industries, it’s time for the C-suite to pay attention.
If you haven’t made an effort to understand how AI will affect your company, now is the time to start.
“The attitude of C-[suite] executives should be to add AI as a top strategic priority,” said George Zarkadakis, digital lead at global professional services firm Willis Towers Watson and author of In Our Own Image: Savior or Destroyer? The History and Future of Artificial Intelligence, in an interview. “This time, technology will move faster than ever, and the laggards will pay a hefty price.”
Of course, the impact of AI is not limited to technological change and innovation. It also involves cultural evolution and, in some cases, revolution.
“Today’s leaders have time, as well as a responsibility, to understand what’s ahead of them before acting,” said Deborah Westphal, CEO of strategic consulting and advisory firm Toffler Associates, in an interview. “It’s important to ask the hard questions, and then, using those insights, determine the best action for an organization.”
In short, AI is going to affect a lot of things in the near future, some of which have not yet been anticipated. In the meantime, consider the following points. Once you’ve reviewed our list of the ways Ai will change business as we know it, tell us about your own AI experiences in the comments section below.
Organizational Intelligence Explodes
Organizations are using AI to solve problems at scale. Michele Goetz, a principal analyst at Forrester Research, estimates that most organizations only take advantage of 10% to 30% of their data, with most of that still being structured, transactional information.
“There’s a difference in what AI technology is going to bring to the organization compared to what other technologies have brought,” said Goetz, in an interview. “[The C-suite executives] will have better visibility into market opportunities and [become aware of] threats faster. Because they can see their environment more holistically and clearly, they’ll understand partners and customers better. It’s [also] going to change the way employees work.”
The seeds of what some are calling The Exponential Age were planted long ago, manifesting themselves as exponential increases in processing power, storage capacity, bandwidth utilization, and — as a result of all of that — digital information. The same rule applies to machine learning.
“True AI learns at an exponential rate, evolves and sometimes even rewrites better versions of itself,” said Walter O’Brien, founder and CEO ofScorpion Computer Services, in an interview. “Because of this factor, the first company to market can also be the first to gather the most training data material — for example, Google’s Voice recognition on cell phones. The lessons learned can be encoded as heuristics or subtle guidelines which become the IP of the company — for example, the definition of Google’s relevance scores. This all creates a barrier to competition.”
Imagine cramming 250 years of human thinking into 90 minutes. Scorpion Computer Services’ AI platform does that.
Employees May Lead The Charge
AI is creeping into organizations in various ways, online and embedded in enterprise applications. The trend is accelerating, necessitating the C-suite’s attention, since it will at some point noticeably affect corporate culture and business strategy.
“The tipping point for the acceptance and widespread application of AI will not come from the C-suite, but from employees seeing the benefits of AI in their daily lives through applications like intelligent personal assistants and smart devices,” said Robert DeMaine, lead technology sector analyst at global advisory service company Ernst & Young (EY), in an interview. “Like the [bring your own device] trend, employees will begin to use their own ‘smart’ personal productivity applications in the office, challenging the organization to reassess its policies. AI will change corporate culture from the bottom up, not the top down.”
Organizational Structures Will Shift
Hierarchical organizational structures adversely affect business agility and the ability to drive value from data. Similarly, the lingering barriers between departments and business units limit a company’s ability to derive additional types of value from data because data remains trapped in silos.
“Projectized” organizations, which operate in a matrix environment, are better positioned to take full advantage of AI systems [than] vertical organizations are,” said Armen Kherlopian, VP of analytics and research at business process transformation company Genpact, in an interview. “This is because these so-called projectized organizations can more readily gain access to resources and key business channels across the enterprise. Additionally, the levers associated with [business] value do not fit neatly into vertical groups.”
Genpact estimates nearly $400 billion of digital investments were wasted globally in 2015 because of a failure to align expected results throughout organizations.
AI Requires Context
AI systems need a lot of input to produce the appropriate output. Since each company, its culture, and its objectives are unique, AI systems need to be trained on those details in order to assist employees effectively, and to serve the needs of the organization accurately. Unlike traditional analytics systems, which can be built without regard to some of the softer organizational issues, AI requires organizations to be aware of the information they’re bringing in and why they’re bringing it in.
“There is a clear trend towards machines becoming more intelligent so that humans can work more intelligently with them,” said George Zarkadakis. “Although machines will increasingly gain more autonomy, they will do so within the human space and within human norms and ethics.”
Organizations Have To Adapt
AI automates some tasks and assists with others, both displacing and complementing the work employees do. The C-suite needs to think about how the shifting division of labor can influence the way a company is managed and how it’s organized.
“AI is impacting many aspects of the business, from workflow management to advertising strategy. It can enable executives to make better, faster, and more accurate business decisions to streamline operations, allocate resources, understand market trends, and connect with customers,” said Robert DeMaine, lead technology sector analyst at EY. “As a result, executives will need to be prepared to address a number of business issues, including reassessing internal operations, a changing workforce, sales and marketing strategies, and shifting investment priorities.”
It’s Not All About Technology
AI is gaining momentum as entrepreneurs, industry behemoths, and companies in-between bring AI products, tools, APIs, and services to market. However, as always, the successful application of technology isn’t simply about technology. It’s about technology, people, and processes.
“A company will be distinguished by how well it works using AI, and increasingly human-digital convergence, rather than by which specific AI technologies it chooses to deploy,” said Deborah Westphal, CEO of strategic consulting and advisory firm Toffler Associates. “If a company only addresses the technological elements, without addressing the organizational people and process aspects, it may see a short-term gain, but will suffer in the longer term and likely be [sur]passed by those companies that addressed the internal questions first.”
Employee Empowerment Is Necessary
Companies have worked toward democratizing the use of data analytics, enabling managers and employees to make better decisions faster. As the velocity of business continues to accelerate at scale with the help of AI, even more employee empowerment will be necessary.
“AI and greater human-digital convergence magnify the strengths and weaknesses of an existing corporate culture, particularly with respect to how much autonomy is afforded to an organization’s people,” said Deborah Westphal of Toffler Associates. “Given a faster rate of change and near real-time environment in which to make decisions, an organization’s people who don’t have the necessary autonomy will find that its processes, no matter how good, will break down quickly and its ability to serve its customers [will be] compromised.”
Learn By Doing
Companies successfully using AI make a point of investing in people and talent. They also actively encourage innovation and experimentation so they can learn quickly from mistakes and capitalize on opportunities, hopefully faster than their competitors.
“Hire talent that knows how to do this. Start experimenting with it and learn how to use it,” said Michael Chui, a partner with McKinsey Global Institute. “I don’t think this is something you plan for five years and then get started. It’s something you learn by doing. When you see something working, the ability to scale is important.”
Expect The Unexpected
AI should not be viewed as simply another technology acquisition, because different things are required to get it up and running successfully. Because the purpose of AI is to provide a superhuman analytic or problem-solving capacity, its training cannot be limited to executing mindlessly on a task.
“You can’t assume that how you train these systems is going to produce the results in the context you want them to be produced,” said Michele Goetz, a Forrester principal analyst. “There has to be an emotional element [because] if you’re introducing AI in your call center, you don’t want to offend your customers.”
Because AI learns from itself, as well as from its human trainers, unexpected circumstances can arise which may be positive or negative.
Pay Attention To Possibilities
Data-driven companies, including IBM, Google, Microsoft, Amazon, and Netflix, are constantly pushing the envelope of what’s possible in order to accelerate innovation, differentiate themselves, and, in some cases, cultivate communities that can extend the breadth and depth of AI techniques and use-cases. It’s wise for C-suite executives to understand the kind of value AI can provide, and how that value might help the company achieve its strategic objectives.
“Machine learning techniques are what make a company like Amazon truly successful. Being able to learn from historical data in order to recommend to a given shopper what [she] may buy next is a key differentiator. Yet, the real ‘Deep Learning’ techniques are still just emerging,” said Mike Matchett, senior analyst and consultant at storage analysis and consulting firmTaneja Group, in an interview. “Google will not just win ‘Go’ championships, but will drive cars with [AI], optimize their data center with [AI], and in my opinion, will try to own the global optimization clearing house for the Internet of Things.”
Change Is At Hand
The composition of the C-suite is changing to take better advantage of data. Data-savvy executives are replacing their traditional counterparts, new roles are being created, and leaders generally are finding themselves under pressure to understand the value and impact of data, analytics, and machine learning.
“As the C-suite becomes increasingly filled with analytical minds and more data scientists are hired, a cultural shift naturally takes place. Some of the new, fast-growing executive roles [include] chief data scientist, chief marketing technology officer, [and] chief digital officer. All are aligned with the growing demand and anticipation for AI,” said David O’Flanagan, CEO and cofounder of cloud platform provider Boxever.
At many levels, non-traditional candidates are displacing traditional roles. For example, the Society of Actuarial Professionals is actively promoting the fact that although most actuaries work in the insurance industry, there are non-traditional employment opportunities, including data analytics and marketing. O’Flanagan expects more members of the workforce to have backgrounds in fields of study such as econometrics.
Source: InformationWeek- 12 Ways AI Will Disrupt Your C-Suite