Where does AI add value and why do companies want it?
Think the world is using AI to its full potential with all the facial recognition technology, analytics offerings, and smart home solutions in the market?
Well, not really. There’s a lot more we can do with AI and companies are eager to invest more in the technology to explore where we can go from here.
According to Gartner, global business value derived from AI is projected to total US$1.2 trillion in 2018, an increase of 70 percent from 2017. AI-derived business value is forecast to reach US$3.9 trillion in 2022.
According to the analysts, there are three different sources of AI business value: customer experience, new revenue, and cost reduction.
- Customer experience: The positive or negative effects on indirect cost. Customer experience is a necessary precondition for widespread adoption of AI technology to both unlock its full potential and enable value.
- New revenue: Increasing sales of existing products and services, and/or creating new product or service opportunity beyond the existing situation.
- Cost reduction: Reduced costs incurred in producing and delivering those new or existing products and services.
#AI central to future of #banking. From CX, cost reduction, to smart compliance & product management, #AI seen by #banks as key. Paradoxicaly only 15% of banks have #AI & #MachineLearning projects running – Time to get moving! https://t.co/Sk7ulE8vQ1 #digital #innovation #FinTech pic.twitter.com/0OeUb3VrfM
— Martin.B.Moeller (@ImMBM) November 17, 2017
John-David Lovelock, Research Vice President at Gartner said:
One of the biggest aggregate sources for AI-enhanced products and services acquired by enterprises
In the early years of AI, customer experience (CX) is the primary source of derived business value.
Organizations see value in using AI techniques to improve every customer interaction with the goal of increasing customer growth and retention.
CX is followed closely by cost reduction, as organizations look for ways to use AI to increase process efficiency to improve decision making and automate more tasks.
However, in 2021, new revenue will become the dominant source, as companies uncover business value in using AI to increase sales of existing products and services, as well as to discover opportunities for new products and services. Thus, in the long run, the business value of AI will be about new revenue possibilities.
If you’re giving AI a thought, think about chatbots and smart assistants to begin with, but then slowly move up your game to experiment with technologies such as big data and predictive analytics. Doing so will help you make the most of AI and get the most out of the technology.