It is astonishing to see, through the prism of time, how far mankind has progressed. There have been various discoveries and inventions have defined respective epochs in the timeline of our existence. From the early days of discovering fire and the invention of the wheel, to now exploring the vastness of the universe and understanding the nanoscopic structure of elements. However, there is one invention which has provided a platform for further progress – the invention of computers. Once, an object of luxury, owned only by large research centers, but is now so commonplace that ordinary individuals carry it around in their pockets (in the form of smartphones). On top of that, any business – big and small – can set up their own domain and customise their website to their exact preferences with the help of website design companies.
As new applications and feature in computing keep coming up, one such application is massively disrupting businesses operate. Artificial Intelligence (AI) has made significant strides, from being just a figment of science fiction to a ubiquitous reality. Essentially, AI is the science of making machines (with data processing capabilities i.e. computers) continuously learn from experiences and recognizing patterns in data, to perform tasks, and subsequently improving itself by analyzing the outputs from various processing iterations.
Recently, AI has become the next big thing, just like the internet 25 years ago – being hailed as the ‘fourth industrial revolution’. Just like the internet’s impact on the ways business is conducted nowadays, AI too is changing the way businesses carry out their functions. As markets are in a state of flux, having a continuously-improving computerized system handle various tasks is reaping dividends for companies which have invested in AI. One study found that applying AI to companies’ business process could create economic value (in the form of increased efficiencies and profits) of approximately US$3 trillion in the next 20 years. This article looks at ways in which AI implementation in certain departments will help companies optimize.
Most of accounting is essentially comprised of mundane and repetitive tasks, such as data entry and tallying, which are time-consuming and prone to errors. Having a well-configured AI system can resolve all those problems, and free up human capacity to be applied into more strategic roles. Some of the tasks AI can take over are:
- Accounts Payable/Receivable – the system can streamline the inflow/outflow of money from multiple accounts, and with a better understanding of these accounts, process the payments accordingly.
- Auditing – having all the accounts digitized, which is accessible from one location (the system), will make it easier to conduct audits more accurately, and quickly.
- Monthly/Quarterly recap – the system can extract, consolidate and reconcile the data from various sources much quicker and more accurately. This allows the organizations to then make strategic decisions for the coming month/quarter, much quicker. In some instance, using predictive analytics, the system itself could then suggest initiatives/policies based on the data.
At certain companies, AI systems analyze customer e-mails and comments posted online on their company’s social media pages, and then resolve approximately 80% of such interactions, while the remaining 20% are then passed on to human customer service representatives. Certain insurance providers use AI systems to process data from multiple sources, including the doctor’s diagnoses, to propose a solution for claiming medical insurance. As a result, such companies are capable of serving more customers’ requests in far quicker times – one study found the AI-powered service to speed up customer response time by up 99% – as well as providing a 24/7 service, all while requiring lesser human resources.
Procurement and supply chain management
As competition in any industry is dynamic and requires constant data analysis from myriad sources, AI is enabling firms to gain the edge over others, with the help of real-time, quality market intelligence, primarily about internal operations. The system looks for certain factors, such as inefficient matching of supply and demand, where and to what extent has human biases and errors have occurred, and operational inefficiencies due to process designs and under-utilization of assets. Such reports, from the various business units, allow managers to then optimize initiatives for the entire company.
The AI system will be able to gather information from various internal and external sources, allowing it to detect not only certain changes amongst suppliers (eg. Price of goods), but also internally – the remaining stock, and which products are in demand and predict when a new order needs to be placed. This will allow the company to optimize its costs. Such systems can also vet individual parties to find about more about their reputation, in terms of quality of goods supplied and their TOP (for suppliers), as well as if the client is known for paying late. Then, it takes measures to mitigate those risks, such as marking up the prices on quotes, to account for the inflation in the event of receiving a late payment.
In the manufacturing units of certain businesses, companies are using systems with AI to inspect the quality of their products, and spot and rectify the flaws immediately. These systems are more accurate and can work with large quantities of products significantly quicker than humans, making the quality control much better. In addition, companies also use AI to run simulations to predict when their equipment might fail. This knowledge allows company to preempt any potential disruptions from their equipment not being operational, which results in loss, and have solutions in place, in time.
These are just some of the ways in which AI helps businesses to optimize their processes. From increased operational efficiency and results, to round-the-clock processing, businesses are increasingly realizing the benefits of implementing an AI-powered system in their businesses and are doing so. However, as such systems have capabilities to continuously learn human tasks (and even interpret some things as complex as human emotions), there is a growing concern that these systems will make the human workforce redundant.
While most repetitive tasks will be taken over by such systems, these systems free up capacity of human workers, who can then work on more complex tasks, such as strategic decision making. Artificial Intelligence is the next frontier, much like the internet. Its prevalence in business operations is a matter of ‘How soon?’ rather than ‘Will it happen?’.