Harnessing the Power of AI in Business

Part of the AI for Business Series

Exploring AI through a non-technical lens for business, design, and product innovation.

Building on the first post of this series, this article delves into understanding and leveraging Artificial Intelligence to solve real-world business challenges. It emphasizes that although AI might seem magical, its true strength lies in addressing practical problems—not in serving as a flashy add-on.

A Journey Through AI and Business

Artificial Intelligence is not sorcery; it is a busy workhorse behind the scenes. Businesses can deploy AI to resolve genuine operational challenges rather than simply applying technology without a clear purpose. The central idea is to align AI with clearly defined goals and customer needs.

Defining the Problem and Setting Goals

Much like any design thinking challenge, success with AI begins by tackling the right question. Organizations should:

• Identify the Problem: Clearly articulate the challenge to ensure AI is used to add value rather than for technology’s sake.
• Set a Goal: Determine what success looks like and outline specific outcomes.
• Establish KPIs: Decide on measurable metrics to track progress and impact.

A Real-World Example: Thoughtburgers Restaurant

Imagine a restaurant called Thoughtburgers, famed for its inventive burgers. Thoughtburgers struggles with overordering some ingredients while underordering others, resulting in food waste and occasional shortages.

• Problem: Excessive food waste and occasional dish shortages.
• Primary Goal: Reduce the volume and value of weekly wasted food.
• KPIs: Lower the food waste costs from a current value X to a target value Y, and diminish the frequency of dish shortages from a current number A to a lower number B.

By mapping its entire operational process—from reviewing weekly bookings to disposing of perishables—the restaurant is poised to pinpoint which stages can benefit most from AI-driven enhancements.

Mapping the End-to-End Process

Effective AI implementation starts with a thorough examination of current processes. For instance, a restaurant manager might follow these steps:

1. Confer with the head chef about upcoming menu changes or specials.
2. Review week-long booking details via an electronic system.
3. Blend data with past experience to plan ingredient orders.
4. Dispose of unused perishable items at the end of the week.

Detailing every step not only clarifies the workflow but also highlights opportunities for automation or improvement through AI.

Understanding AI Capabilities

Before integrating AI, it is essential to recognize what it excels at:

• Process Automation: Handles routine, repetitive tasks (e.g., data entry, scheduling).
• Cognitive Insight: Sifts through complex data to uncover actionable patterns that may escape human notice.
• Cognitive Engagement: Facilitates smarter interactions with customers and employees via chatbots or digital assistants.

Each capability aligns with specific AI technologies such as cognitive robotic process automation (CRPA), machine learning (ML), and natural language processing (NLP). Although the technical details will be explored in future posts, the focus here is on identifying which AI functionalities can streamline business operations.

AI as a Strategic Tool

The narrative shifts from celebrating AI as a product to viewing it as a strategic tool. A clear example is Amazon, which effectively integrates AI within its operations without heavy promotional fanfare. Although their homepage might scarcely mention AI (except in playful contexts like “Hair care”), the backend systems are robust:

• Warehouse Automation: A fleet of robots enhances efficiency in physical operations.
• Personalization: Data-driven techniques ensure each customer enjoys a customized shopping experience.
• Logistics Optimization: Advanced algorithms predict customer needs, optimizing order delivery even before a purchase is finalized.

Ultimately, customers care less about the technology and more about tangible benefits—such as rapid delivery and streamlined service—which reinforces the idea that AI should simply be a means to achieve business objectives.

Managing Expectations: Evolution, Not Revolution

The long-term impact of AI may eventually mirror the transformative influence of electricity, yet its current role is more evolutionary. Consider self-driving cars; despite significant media attention over many years, they have yet to revolutionize daily commutes.

AI, therefore, should be embraced as a partner that incrementally solves specific challenges. By concentrating on well-defined problems and integrating AI where it truly adds value, businesses can sidestep the pitfalls of overhype while paving the way for lasting improvements.

Conclusion

By systematically defining problems, setting clear goals, and mapping out operational processes, companies can harness AI effectively. When viewed not as an end product but as a potent tool, AI enables meaningful enhancements that resonate with both business goals and customer needs. This strategic approach helps realize AI’s promise without falling prey to trendy buzzwords or unrealistic expectations.