How Can Businesses Get Real Value from AI Now?
Artificial Intelligence (AI) has been a buzzword in the business world for several years now, with many companies investing significant resources into incorporating AI into their operations. However, despite the hype, many businesses are struggling to realize tangible value from their AI initiatives. In this post, we’ll explore how businesses can get real value from AI by focusing on specific areas where data and scale overlap, starting with small, high-impact pilots, and tracking ROI with clear metrics.
Why AI Pilots Fail
Before we dive into the strategies for getting real value from AI, it’s essential to understand why many AI pilots fail. According to a report by McKinsey, 85% of AI projects are not successful, and a significant reason for this is that businesses overestimate the potential of AI without a clear understanding of their specific needs and goals. This lack of focus and understanding often leads to failed pilots that fail to deliver the expected ROI.
Where Data and Scale Overlap: Three Areas for AI Value
To get real value from AI, businesses should focus on areas where data and scale overlap. These areas are:
- Automating Predictions: AI can be used to automate predictions and forecasts, enabling businesses to make data-driven decisions. For example, AI-powered predictive maintenance can help businesses reduce downtime and improve product quality.
- Personalizing Customer Experiences: AI can be used to personalize customer experiences, improving engagement and loyalty. For example, AI-powered chatbots can help businesses provide 24/7 customer support and offer personalized recommendations.
- Detecting Anomalies: AI can be used to detect anomalies and anomalies in data, enabling businesses to identify potential issues before they become major problems. For example, AI-powered fraud detection can help businesses reduce the risk of fraud and improve customer trust.
Starting with a Small, High-Impact Pilot
To get real value from AI, businesses should start with a small, high-impact pilot project. This pilot project should focus on a specific business challenge or opportunity, such as churn modeling or dynamic pricing. The pilot should be designed to deliver measurable results, such as cost savings or conversion lift.
Tracking ROI with Clear Metrics
Once the pilot project is launched, it’s essential to track ROI with clear metrics. This means setting specific goals and measuring progress against those goals. For example, if the pilot project is focused on reducing churn, the metrics might include customer retention rates and revenue loss reduction. If the pilot project is focused on dynamic pricing, the metrics might include revenue lift and pricing optimization.
Scaling Incrementally
Once the pilot project has delivered measurable results, it’s time to scale the AI initiative incrementally. This means expanding the scope of the project to other areas of the business, while continuing to track ROI and refine the approach.
Real-World Examples of AI Value
Several businesses have successfully leveraged AI to deliver tangible value. For example:
- Amazon: Amazon uses AI to personalize product recommendations, improving customer engagement and sales.
- Walmart: Walmart uses AI to optimize inventory levels and reduce waste, improving supply chain efficiency and reducing costs.
- UPS: UPS uses AI to optimize delivery routes and reduce fuel consumption, improving operational efficiency and reducing emissions.
Conclusion
Getting real value from AI requires a structured approach that focuses on specific areas where data and scale overlap. By starting with a small, high-impact pilot project, tracking ROI with clear metrics, and scaling incrementally, businesses can unlock the potential of AI and deliver tangible value. By avoiding the pitfalls of overselling AI and instead focusing on measured steps with real outcomes, businesses can ensure that their AI initiatives deliver the expected ROI and drive long-term success.
Source:
Growth Jockey. (n.d.). Leverage Artificial Intelligence in Business. Retrieved from https://www.growthjockey.com/blogs/leverage-artificial-intelligence-in-business
