Artificial Intelligence or AI may conjure up images of Steven Spielberg’s 2001 science fiction film where advanced-thinking robots and humans uneasily coexist in the future, but the reality is that AI is here today, and the disruptive technology is changing the way we do business.
Most of us interact with different forms of AI on a routine basis without even realizing it and those interactions are only going to increase as the COVID-19 pandemic has sped up digital transformation in all sectors, including AI.
In fact, AI could be the key to economic recovery for some businesses in 2021.
“Enterprises have seen a silver lining in the current situation: an opportunity to become more resilient and agile in the long run,” said Stacey Soohoo, research manager, Customer Insights & Analysis with International Data Corporation (IDC). “Artificial intelligence continues to be a key technology in the road to recovery for many enterprises and adopting artificial intelligence will help many to rebuild or enhance future revenue streams and operations.”
Global AI Spending to Double in Next Four Years
IDC released its “Worldwide Artificial Intelligence Spending Guide” in August 2020 which forecasts global spending on AI to double over the next four years, growing from $50.1 billion in 2020 to more than $110 billion in 2024. The compound annual growth rate for 2019-2024 will be 20.1 percent.
“Companies will adopt AI – not just because they can, but because they must,” said Ritu Jyoti, program vice president, Artificial Intelligence at IDC. “AI is the technology that will help businesses to be agile, innovate, and scale. The companies that become “AI powered” will have the ability to synthesize information (using AI to convert data into information and then into knowledge), the capacity to learn (using AI to understand relationships between knowledge and apply the learning to business problems), and the capacity to deliver insights at scale (using AI to support decisions and automation).”
So, we are not talking about cool robots, but AI refers to an area of computer science that focuses on systems and processes that can function, react, and perform tasks the same way humans can.
Advances in processors and expanding bandwidth of networks is allowing AI-driven technologies to take a large amount of data and quickly problem solve, rationalize, and do predictive analysis. As the algorithms appear to “learn” over time, this type of AI is often called Machine Learning.
Another subset of AI is called Deep Learning, which relies on neural networks to engage in nonlinear reasoning.
Business Applications Taking Advantage of AI
AI adoption is being spurred on with a goal to deliver better customer experiences and help employees do better at their jobs.
The IDC reports says the top five applications in business for the next four years will be:
- Automated Customer Service Agents
- Sales Process Recommendation and Automation
- Automated Threat Intelligence and Prevention
- IT Automation
- Fraud Analysis and Investigation
The two industries that will put the most investment in AI in the near term are banking and retail. Banking will use AI for fraud analysis and investigation and on program advisors and recommendation systems. Retail AI investment will go towards customer experience such as chatbots and recommendation.
According to the IDC report about a third of AI spending will go towards software and services with the rest spent on hardware. IT services will account for $14.5 billion in spending with AI applications at $14.1 billion. On the hardware side, servers will account for $11.2 billion.
Everyday Uses for AI Across Industries
AI will become ingrained in the everyday business world from IT to recruiting to customer service.
Here are a few examples of applications:
Accounting: Data entry and reporting can be automated with AI able to process a large data set quickly.
Cybersecurity: AI can perform detailed analysis and detect suspicious activity in real time.
Customer Service: Chat bots and other AI are using advances in language processing to communicate with customers and employees.
Marketing: AI can help marketing teams target advertisements towards customers most likely to buy a product or service.
Recruiting: AI can provide unbiased candidate sourcing, screening, and interviewing. Facial recognition AI can help with video interviews.
“Our latest AI research shows 86 percent of businesses currently reaping the benefits of better customer experience through AI, and 25 percent of companies with widespread AI adoption expect to see the tech pay out in increased revenue during 2021,” said Anand Rao, Global Artificial Intelligence Lead at PwC. “The pandemic uncovered the value of AI, lending itself to enhancing tasks related to workforce planning, simulation modeling, and demand projection.”
One of Rob Towe’s “10 AI predictions for 2021” in Forbes is that the federal government will finally make AI a true policy priority.
"Here's what we always have to remember: This disruption with technologies like AI is going to happen," said Rep. Will Hurd who co-authored a bipartisan nonbinding resolution on AI in December 2021. "We have to be prepared for it."