In the last 40 years, we have experienced two major technology-led waves of value creation: one driven by the rise of personal computing, the next by the dawn of the internet. A third wave is now being led by artificial intelligence (AI)-enabled digital transformation. Prior to the outbreak of COVID-19, digital transformation was part of a five-year roadmap for many businesses. The pandemic has brought tremendous acceleration, and companies have crashed five-year plans to a few months in many cases! AI technology is already being used extensively in the business world in areas like customer monetisation, marketing, human resources, risk management, robotic manufacturing, supply chain and others. Digital transformation is only accelerating the use of AI, as with digital business models, more data is available, and in the digital world, things can be adapted in real-time.
AI technology will disrupt entire industries and create new business models, either creating completely new companies of tomorrow or transforming existing companies. Two noteworthy examples here are smart cars and personalised entertainment. Smart cars and autonomous driving are changing the auto industry, and we can see the value being captured by Tesla. AI tech that personalises, curates, and creates entertainment content is transforming the business of entertainment and media companies and is evident in the value being captured by Netflix and Amazon.
AI technology is evolving rapidly, riding on huge investments being made in AI R&D by universities, governments, big technology companies and start-ups, and also supported by innovations in hardware and infrastructure. What will be possible in the near future will be very different from what is possible today. While there will be variations in degree and timeline of impact depending on the nature of business, almost all industries will be affected in one way or the other.
AI in healthcare is going to save lives, cut costs, and improve the wellbeing of people across the world. This will happen through personalised healthcare, preventive diagnosis and AI-assisted physicians. AI is driving an enormous transformation of the education sector as well, bringing value to students and institutions. By leveraging AI and other digital technologies, it has become possible to make education more convenient and personalised. AI will automate administrative tasks, allowing educators to pay more attention to students’ skills and overall development. By meeting the education needs of millions of children and adults cost-effectively and with limited resources, AI and digital technology can help developing countries like India solve developmental issues at scale.
A question I often get asked is what other big impacts AI will have in the business world. To be honest, nobody knows the full answer, but we can be sure it will be profound. In the early days of the internet, around the year 2000, we were mostly discussing applications for e-commerce and content consumption. Who would have dreamt at that time of applications like Instagram, Uber or Airbnb? Similar will be the case for AI – entrepreneurs and innovators will use their ingenuity to leverage the latest AI technology to come up with things in the future that we cannot even dream of today.
Existing companies could lead the way with AI-enabled disruption and create new business models or choose to leverage AI in their existing business to improve effectiveness and maintain competitive advantage.
In order to be successful at AI-led transformation, existing companies need to create a culture that empowers an agile way of working either in their overall business or in a new unit focusing on innovation. This should be accompanied by a flat organisational structure and empowered and autonomous teams. Risk-taking and learning should be encouraged, while failures should be looked at as learning opportunities rather than just frowned upon.
Not doing anything to participate in the AI wave is not an option, and such companies could face a threat to their business in the near future.
This article is written by a member of the AIM Leaders Council. AIM Leaders Council is an invitation-only forum of senior executives in the Data Science and Analytics industry. To check if you are eligible for a membership, please fill the form here.
