The AI Impact on Business
The AI impact on business is big and getting bigger as artificial intelligence transforms every industrial sector.
Using AI could make it easier to forecast failures in consumer packaged goods, McKinsey said. This would allow for interventions to be scheduled more effectively, reducing downtime and operating costs, and improving production yield. Those applications of AI could have a potential impact of a half a billion dollars in areas including predictive maintenance and yield optimization. As Deloitte points out, there is research back to the 1950s showing that even simple predictive models do better at forecasting than human experts. The future isn’t one where humans do all the failure forecasting, or where machines do; it’s one where technology and humans make each other better at predicting future outcomes.
Many industries involve moving parts--literally, and they are the kind that require regular maintenance. Artificial intelligence can provide those industries with a way to predict when best to do that maintenance. This model has the potential to improve operating costs, productivity and--most importantly--worker safety. Last year Capgemini released a report that found that smart factories--which use predictive maintenance, along with other new technologies--could contribute $500 billion to the global economy during the next five years.
Personalize promotions: Retailers could use customer data and SKU performance to personalize promotions received by customers at their brick-and-mortar locations, McKinsey said. Such a move could have an impact of up to $500 billion in sectors including customer acquisition and generation, pricing and promotion, and customer-service management. AI is already affecting pricing, according to SAP.iO, based on customer and product data.
Schedule deliveries: The shipping industry is using artificial intelligence, along with machine learning and automation, to streamline its processes, which affects everything from when container ships are able to dock at busy ports to when your Amazon package will arrive at your front door. This approach can benefit businesses on the other end, as well, allowing for the automation of orders to control spending and ensure essential supplies never run out. All industries rely on shipping to some degree, so the potential impacts are widespread.
In the banking sector, the application of AI to underwriting models could improve fraud detection and have an industry impact of $300 billion. There’s a potential impact of up to $200 billion in marketing and sales, and $100 billion in risk analysis. AI means that numbers can be crunched far more quickly than if done by humans, or even conventional computing, which means fraud detection can happen more quickly than ever before, and customer patterns can be analyzed in new ways.
Artificial intelligence has gone from the stuff of science fiction to our everyday lives. Automation, powered in part by AI and machine learning, is poised to transform employment. But the AI impact will be significant across the business, with huge potential for cost savings and efficiencies in industries as varied as shipping, fast food and financial trading.
The AI impact will extend across nearly all economic sectors, but there are two particular areas in which the impact is potentially the largest, according to a McKinsey report: For marketing and sales, the potential value unlocked by AI applications is up to $2.6 trillion, and for supply-chain management and manufacturing, the potential value is $2.0 trillion.
According to a March report from NASDAQ, the primary industries targeted by AI companies are:
Semiconductors
Software
Internet & Computer Services
Industrial Machinery
Specialized Consumer Services
Broadline Retailers
Telecommunications
Defense
Automotive
Among industries, there is wide disparity in the investment in and adoption of artificial intelligence, McKinsey research has shown. Perhaps unsurprisingly, high tech and communications are leaders in adoption--but so are energy and resources, and automotive and assembly. Sectors like professional services and travel and tourism are lagging.
Some industries are planning to spend more to maintain their position at the head of the pack, or in an attempt to catch up. Financial services and high tech and communications sectors intend to spend at least 10 percent more on AI during the next three years, for example, while professional services and healthcare plan to increase spending in the upcoming period by about 7 percent.
But closing that gap requires more than just spending money. It requires knowledge about how AI can help your sector, and what the potential upsides and downsides of investment might be. Here are a few of the ways artificial intelligence, and related technologies, can impact a wide variety of business sectors.
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