Remember when Arnold Schwarzenegger strutted into a police station and said, “I’ll be back”? For many of us, that iconic movie, The Terminator, was our first brush with Artificial Intelligence. Then came The Matrix, A.I., and several others. Today, AI does not look anything like the Terminator. Leather-wearing, gun-toting-robots have been replaced by sleek self-driving cars, IBM’s Watson and Amazon’s Alexa.
Artificial intelligence (AI), the study of how to make machines intelligent or capable of solving problems as well as people can, has been around for several decades but has really come into its own in recent years. A recent McKinsey report estimated that firms have invested between $20 billion and $30 billion in 2016 on AI. Forrester identified AI as one of the top 15 emerging technologies that has the potential to change the world in the next five years.
Factors Driving Growth
A recent Forbes survey found that 38% of enterprises are already using AI, estimated to grow to 62% by 2018. IDC estimates that the AI market will grow from $8 billion in 2016 to more than $47 billion in 2020 . That’s phenomenal growth. Is the focus on AI warranted, or is it a tech bubble waiting to burst?
Experts believe that AI is indeed here to stay and will disrupt the tech landscape as we know it. Analysts and experts are finally seeing clear business benefits to adopting AI. Factors driving this growth are:
Access to Data
There is a proliferation of data today with 98% of content on the internet having been created in the last two years. AI applications thrive in data-rich environments and its phenomenal power is unleashed when there are zettabytes of data to process.
Advancements in AI Subsystems
In recent years, technologists have made enormous headway in the areas of machine learning (the ability of systems to automatically learn and improve from experience without being explicitly programmed to do so), deep learning and Natural Language Processing (NLP). This has led to more widespread adoption, making AI more commercially viable.
Human Talent Inflow
Increasingly, developers and data scientists are getting on the AI bandwagon. For example, Facebook messenger has 34,000 chatbots, written by 33,000 developers in just a few short years. With more talent coming onboard every day, AI is on its way to becoming mainstream.
There are other factors like availability of hardware that can support advanced computing that have led to the growth of AI. There is no doubt that AI is here to stay. Businesses that invest in developing their AI backbone are likely to have an unfair advantage in the years to come.
Use Cases for AI in the Modern Enterprise
According to the IDC report, automated customer service agents, quality management investigation and recommendation systems, diagnosis and treatment systems, and fraud analysis and investigation attracted the biggest investments in 2016.
Here are some areas where businesses are seeing the biggest payoffs when it comes to their AI investments:
Customer Experience Driven by Deep Insights
Since 2016, customer experience has been the main differentiator in a very crowded marketplace. Brands with deeper insights offer better customer experiences. That’s where AI comes into play. AI offers actionable customer insights by parsing through customer data. Cognitive/artificial intelligence can drill down through large quantities of data and sort, group, analyze, and mine customer insights that provide businesses with the opportunity to make faster and more accurate business decisions and achieve better business results.
According to Forrester, “Businesses that use artificial intelligence (AI), big data and the Internet of Things (IoT) technologies to uncover new business insights, will steal $1.2 trillion per annum from their less informed peers by 2020.” Netflix, Google and Amazon’s Alexa all use AI to improve their recommendations engine and make sure their suggestions are in line with customer’s preferences.
Personalization
With platforms like Facebook, YouTube, Twitter and others, brands today can reach billions of people. The internet age has ushered in a new level of targeting and relevance which signals the end of ‘mass’ communication. Customers expect, and even demand, a highly-customized and individualized service offering based on historical purchase data, social footprint, location and much more. With AI, marketing teams can tailor campaigns to customer intent and where the customer is in the buying cycle.
Brad Parscale, Trump’s digital director during his election campaign, recently spoke of how personalized targeting on Facebook helped deliver ads, on the fly, that were tailored to individual preferences. The campaign served different ads to neighbors based on individual preferences, issues they identified with and other parameters. A recent survey found that 63% of respondents mentioned increased conversion rates and 61% noted improved customer experiences when asked about the benefits of AI-powered personalization on websites.
Customer Service
AI-powered assistants and chatbots have become mainstream. It is highly likely that the very prompt and helpful ‘Adam’ who assisted you with your billing problem this morning was a bot and not a human. Bots maintain strong customer engagement and loyalty on a deeper level and in a more efficient and cost-effective manner. Live chat has the highest satisfaction level for any customer service channel at 73%, compared to 61% for email and 44% for phone. In fact, by 2020, customers are expected to manage 85% of their relationships with enterprises without interacting with a human.
Process Efficiency
Many businesses are using AI to increase efficiency in their business processes. For example, Instacart, a technology-powered grocery shopping company, used AI to predict the most efficient sequence for shoppers to use when picking up their groceries. This resulted in shaving off a few minutes per trip, which translated into saving 618 years of shopping time per year.
While an AI-powered future is a certainty, businesses must not forget that there is still much work that remains to be done. Business leaders like Elon Musk and Warren Buffet have spoken out against artificial intelligence and many people have legitimate fears that AI will take away their jobs or that data security is lacking. Brands will do well to address these concerns that may exist by being open and upfront about their use of AI. More than ever, brands must place customers at the center of their engagement strategies. AI is only a means to an end – an engaged and satisfied customer.
Reference:
[1] From the McKinsey Global Institute Report, “Artificial Intelligence: The Next Digital Frontier”
[2] Forrester’s Top Emerging Technologies To Watch: 2017-2021
[3] Artificial Intelligence Rapidly Adopted By Enterprises, Survey Says
[4] Worldwide Cognitive Systems and Artificial Intelligence Revenues Forecast to Surge Past $47 Billion in 2020, According to New IDC Spending Guide
[5] Facebook Messenger chief says platform’s 34,000 chatbots are finally improving user experience
[6] Forrester report “Predictions 2017: Artificial Intelligence Will Drive The Insights Revolution”
[7] 2017 Trends in Personalization
[8] Consumers prefer live chat for customer service: stats
[9] Gartner Customer 360 Summit 2011
[10] Deep Learning with Emojis (not Math)
