15% of all businesses have adopted at least one AI technology
Since earlier this year, Artificial Intelligence (AI) seems to be dominating discussion amongst directors and business owners in virtually every industrial sector of the UK.
The emergence of ChatGPT and Bard from Google has put the potential of AI front and centre in the discussion as many businesses begin to acknowledge and understand the potential impacts on their industries and companies that AI will bring.
In this blog we’ll break down how businesses can use AI positively and what pitfalls they will need to be aware of before they fully throw open their doors to their new virtual colleague.
What is AI ?
When people talk about Artificial Intelligence, they have widely different ideas and thoughts depending on their experience. For some it’s a glorified search engine supplying answers after they’ve only typed a few words.
For others it’s similar to sci-fi films like Minority Report and I,Robot with hyper capable systems virtually taking over from their operators.
The truth is somewhat different. In its simplest form, AI is a computer’s ability to perform the cognitive functions we usually associate with human minds quicker and more efficiently.
Right now AI can be divided into several distinct types. They are:-
- Reactive machines – which can only respond to their immediate environment such as robot vacuum cleaners
- Limited memory machines – can learn from past experiences and use that information to make decisions. These could include self driving cars, virtual assistants such as Siri, Alexa and Google Home or gaming AI such as a chess Ai that would store memories of the most successful moves it’s made and will remember them
- Machine learning AI – uses statistical techniques to learn from data and make predictions
- Deep learning AI – uses artificial neural networks to gain even more insights from data sources and build outcomes
- Natural language processing AI – can understand and generate authentic human language
- Computer vision AI – can understand and interpret images and videos
What ways are businesses using AI?
There are many examples of how small businesses are implementing AI into their daily operations. Below are some specific examples on how it is being used to their advantage:
- Supercharged virtual assistants – creates efficiency by seamlessly automating
- Transformational machine substitution – gradually replaces the need for professionals due to its increasing capabilities
- Chatbots – allows businesses to provide 24/7 customer service as they can answer FAQs, provide support tickets and even promote/sell products
- Fraud detection – analyses data to identify patterns that are indicative of fraud
- Demand forecasting – analyses data to predict future demand for product and services
- Pricing optimization – compares similar products/services on the market to determine the optimal price.
Advantages of implementing AI
- Improved and personalised customer service
One way AI can be used is to study buying patterns, individual consumer data and larger data sets to determine what each customer prefers at any given time to suit their personal style, interests and needs. This allows businesses to tailor content to resonate with each individual client.
Another way is through automating customer service tasks, this then reduces wait times as well as freeing up human employees to manage complex tasks. This allows businesses to provide a faster and more efficient service resulting in increased customer satisfaction.
- Increased productivity
AI can be used to automate repetitive tasks which inturn allows the organisations to minimise associated costs while maximising the skills of human employees to handle more strategic tasks.
- Cost Savings
AI can help reduce overheads in a number of ways such as automating tasks, reducing errors and improving decision making.
- Enhanced decision making
Businesses are using AI to gain insight into their data and identify trends that may be missed by the naked human eye. This then allows businesses to make more informed decisions surrounding pricing, marketing and product development.
Downfalls to implementation of AI
- High Costs
The creation of AI technology requires lots of time and resources which can all add up. Combined with the fact that AI needs to operate on the latest hardware and software to stay updated and meet the latest requirements, can make it quite costly.
- Rise in unemployment
In some instances the use of AI has caused a rise in unemployment and replaced certain
occupations. This is especially a concern for small businesses, which may not have the resources to retrain or deploy employees who are replaced by AI. Infact experts have pointed out that potential shifts in occupations are imminent by 2030, estimating that between 3 to 14 percent of the global workforce will need to switch jobs and learn new skills.
- Environmental impact
Although AI can have a positive impact it can also cause significant environmental damage due to intensive energy use. A 2019 study found that a particular type of AI (deep learning in natural language processing) has a huge carbon footprint due to the fuel the hardware requires. Experts say that training a single AI model produces 300,000 kg of CO2 emissions roughly equivalent to 125 round trip flights from NYC to Beijing.
- Increased competition
With AI-powered businesses operating more effectively and efficiently, traditional businesses are finding it hard to compete, especially small businesses that are ripe for distribution by AI such as retail and customer service.
- Cybersecurity risks
Some AI powered systems rely on the input of data and can be vulnerable to cyber attacks. This can have serious consequences such as data breaches, financial losses and reputational damage. For smaller businesses, access to resources to adequately protect themselves against these risks may be more problematic or costly.
- Biassed and Discriminatory Algorithms
Design flaws or faulty and imbalanced data that is being fed into algorithms can lead to biassed software which can lead to unfair or discriminatory outcomers. This is a particular concern for companies that lack diversity as they risk developing products that exclude their customers.
- Compliance risks
AI- powered systems can generate large amounts of data, which can create compliance risks for small businesses.
Sectors that will benefit from AI adoption
Manufacturing is paving the way when it comes to sector adoption of AI technology, which has seen implementation of AI across several lines and layers of operations, from workforce planning to product design.
AI’s main purpose in manufacturing is to analyse sensor data and predict breakdowns and accidents. This then allows management to take timely measures to restore the equipment and prevent costly unplanned downtime.
The banking and financial services industry is undergoing a massive transformation due to the introduction of AI applications across all departments.
In many scenarios, AI software robots are being used to process loan applications in fractions of a second, detect fraudulent transactions, as well as recommend investments based on various data sources.
Another way AI is being utilised is the usage of chatbots in the Insurance sector to improve the customer experience and create insurance plans and products based on customers’ data. Allowing businesses to reduce the claim processing time, thus helping both the insurance company and customers.
Have you ever noticed when there is a big event such as a concert or festival in town, hotel prices skyrocket? This is due to AI analysing market trends, historical data, and demand patterns to optimise businesses pricing strategies, to maximise room occupancy rates, and increase revenue for hotels and resorts.
Another way the hospitality industry utilises AI algorithms, is by analysing customer preferences, past bookings, and browsing behaviour to provide personalised recommendations for accommodations, dining options, and activities that help enhance the overall guest experience.
AI algorithms can analyse customer reviews, social media mentions, and feedback to extract sentiment and identify areas for improvement, allowing businesses to enhance guest satisfaction and address any concerns promptly.
AI is being used in retail to personalise customer experiences by recommending products and services based on past purchase history. This then allows businesses to align their business strategy with consumer needs to outsmart competitors.
Sectors that won’t benefit from AI adoption
“Traditional” journalism such as newspapers and magazines have already suffered downturns and losses of influence and status through the disruption that social media, video and podcasting have offered users.
AI could start to offer users a personal, curated individual news feed that would see snippets of various news sources rather than one whole – like a newspaper or news bulletin.
AI is also becoming sophisticated enough that it can start generating its own news stories based on summarising available information so it could eventually circumvent the role of traditional journalism.
Nevertheless, a concern with the use of AI is the potential lack of originality and authenticity in AI-generated creative works.
While AI systems can mimic existing styles and patterns, there is an ongoing debate about whether AI can truly possess creativity in the same sense as humans. AI-generated works may lack the depth, emotional connection, and unique perspectives that come from human experiences and emotions.
Students tend to learn using different stimuli and inputs. Some are more visual learners, some are auditory learners preferring to listen and work with what they’ve been told, others prefer to read etc.
An AI embedded in an educational system could specifically tailor its output to the most successful method its students display in learning and could then concentrate on providing tuition through this method. It would also bring quick data analysis to provide feedback and grading on assignments as well as being able to summarise difficult concepts.
AI could be a valuable educational tool for teachers but they may also be concerned about potential and future changes in the workplace.
A lawyer’s job is to interpret the law to the best of their ability and provide to a judge with the most logical and compelling arguments. A learning AI could summarise thousands of documents, arguments and precedents in minutes and potentially produce legally watertight outputs that any judge would find hard to refute.
Again, lawyers would be unlikely to be replaced by intelligent computers immediately or entirely, but they could use AI as a significant tool to support or evolve the current roles of paralegals and junior solicitors.
AI in healthcare is showing great results within diagnosis and treatment, however with this comes a rise in potential for ethical and privacy concerns. AI systems in healthcare rely heavily on patient data, including sensitive medical information. There is a need to ensure that this data is collected, stored, and used in a secure manner. Protecting patient privacy, maintaining data confidentiality, and preventing unauthorised access to personal health information are critical considerations.
We have seen driverless taxis on social media but we have to consider the ethical and legal challenges they present. Autonomous vehicles, for example, raise questions about liability in the event of accidents. Determining who is responsible when an AI-controlled vehicle is involved in a collision can be complex.
AI is showing no signs of slowing down so it is important that you take advantage of the opportunities that AI offers. Below is some tips to help you mitigate the threat of AI:
- Make sure you are staying up-to-date on AI trends so that you can use it to your advantage to stay competitive
- If you can invest in AI-powered tools, do it!
- Be aware of potential bias and put contingency plans in place to mitigate it
- If you are investing in AI-powered tools make sure you are also investing in strengthening your cybersecurity to protect yourself from cyber attacks.
- Work with AI experts to help implement AI solutions and minimise the risks.
If you are still worried about how AI will impact the future of your business -why not get in touch with us today.
One of our team of expert advisors will work with you to get an accurate picture of your business and the challenges it faces and be able to give you impartial and effective advice on what options you have moving ahead.
It might be a great advantage for you, if your company is around to benefit. Make an appointment and we’ll do our best to make sure you are.