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AI Powered Organization

Abdul January 28, 2019

The excitement around artificial intelligence is palpable. It seems that not a day goes by without one of the giants in the industry coming out with a breakthrough application of this technology, or a new nuance is added to the overall body of knowledge. Horizontal and industry-specific use cases of AI abound and there is always something exciting around the corner every single day.

However, with the keen interest from global leaders of multinational corporations, the conversation is shifting towards having a strategic agenda for AI in the enterprise. Business heads are less interested in topical experiments and minuscule productivity gains made in the short term. They are more keen to understand the impact of AI in their areas of work from a long-term standpoint. Perhaps the most important question that they want to see answered is – what will my new AI-enabled enterprise look like?

The question is as strategic as it is pertinent. For business leaders, the most important issues are – improving shareholder returns and ensuring a productive workforce – as part of running a sustainable, future-ready business. Artificial intelligence may be the breakout technology of our time, but business leaders are more occupied with trying to understand just how this technology can usher in a new era of their business, how it is expected to upend existing business value chains, unlock new revenue streams, and deliver improved efficiencies in cost outlays. In this article, let us try to answer these questions.


AI is Disrupting Existing Value Chains

Ever since Michael Porter first expounded on the concept in his best-selling book, Competitive Advantage: Creating and Sustaining Superior Performance, the concept of the value chain has gained great currency in the minds of business leaders globally. The idea behind the value chain was to map out the interlinkages between the primary activities that work together to conceptualize and bring a product / service to market (R&D, manufacturing, supply chain, marketing, etc.), as well as the role played by support activities performed by other internal functions (finance, HR, IT etc.). Strategy leaders globally leverage the concept of value chains to improve business planning, identify new possibilities for improving business efficiency and exploit potential areas for new growth.

Now with AI entering the fray, we might see new vistas in the existing value chains of multinational corporations. For instance:

  • Manufacturing is becoming heavily augmented by artificial intelligence and robotics. We are seeing these technologies getting a stronger foothold across processes requiring increasing sophistication. Business leaders need to now seriously consider workforce planning for a labor force that consists both human and artificial workers at their manufacturing units. Due attention should also be paid in ensuring that both coexist in a symbiotic and complementary manner.
    • Logistics and Delivery are two other areas where we are seeing a steady growth in the use of artificial intelligence. Demand planning and fulfilment through AI has already reached a high level of sophistication at most retailers. Now Amazon – which handles some of the largest and most complex logistics networks in the world – is in advanced stages of bringing in unmanned aerial vehicles (drones) for deliveries through their Amazon Prime Air program. Business leaders expect outcomes to range from increased customer satisfaction (through faster deliveries) and reduction in costs for the delivery process.
    • Marketing and Sales are constantly on the forefront for some of the most exciting inventions in AI. One of the most recent and evolved applications of AI is Reactful. A tool developed for eCommerce properties, Reactful helps drive better customer conversions by analyzing the clickstream and digital footprints of people who are on web properties and persuades them into making a purchase. Business leaders need to explore new ideas such as this that can help drive meaningful engagement and top line growth through these new AI-powered tools.

    AI is Enabling New Revenue Streams

    The second way business leaders are thinking strategically around AI is for its potential to unlock new sources of revenue. Earlier, functions such as internal IT were seen as a cost center. In today’s world, due to the cost and competitive pressure, areas of the business which were traditionally considered to be cost centers are require to reinvent themselves into revenue and profit centers. The expectation from AI is no different. There is a need to justify the investments made in this technology – and find a way for it to unlock new streams of revenue in traditional organizations. Here are two key ways in which business leaders can monetize AI:

    • Indirect Monetization is one of the forms of leveraging AI to unlock new revenue streams. It involves embedding AI into traditional business processes with a focus on driving increased revenue. We hear of multiple companies from Amazon to Google that use AI-powered recommendation engines to drive incremental revenue through intelligent recommendations and smarter bundling. The action item for business leaders is to engage stakeholders across the enterprise to identify areas where AI can be deeply ingrained within tech properties to drive incremental revenue.
    • Direct Monetization involves directly adding AI as a feature to existing offerings. Examples abound in this area – from Salesforce bringing in Einstein into their platform as an AI-centric service to cloud infrastructure providers such as Amazon and Microsoft adding AI capabilities into their cloud offerings. Business leaders should brainstorm about how AI augments their core value proposition and how it can be added into their existing product stack.

    AI is Bringing Improved Efficiencies

    The third critical intervention for a new AI-enabled enterprise is bringing to the fore a more cost-effective business. Numerous topical and early-stage experiments with AI have brought interesting success for reducing the total cost of doing business. Now is the time to create a strategic roadmap for these efficiency-led interventions and quantitatively measure their impact to business. Some food for thought for business leaders include:

    • Supply Chain Optimization is an area that is ripe for AI-led disruption. With increasing varieties of products and categories and new virtual retailers arriving on the scene, there is a need for companies to reduce their outlay on the network that procures and delivers goods to consumers. One example of AI augmenting the supply chain function comes from Evertracker – a Hamburg-based startup. By leveraging IOT sensors and AI, they help their customers identify weaknesses such as delays and possible shortages early, basing their analysis on internal and external data. Business leaders should scout for solutions such as these that rely on data to identify possible tweaks in the supply chain network that can unlock savings for their enterprises.
    • Human Resources is another area where AI-centric solutions can be extremely valuable to drive down the turnaround time for talent acquisition. One such solution is developed by Recualizer – which reduces the need for HR staff to scan through each job application individually. With this tool, talent acquisition teams need to first determine the framework conditions for a job on offer, while leaving the creation of assessment tasks to the artificial intelligence system. The system then communicates the evaluation results and recommends the most suitable candidates for further interview rounds. Business leaders should identify such game-changing solutions that can make their recruitment much more streamlined – especially if they receive a high number of applications.
    • The Customer Experience arena also throws up very exciting AI use cases. We have now gone well beyond just bots answering frequently asked questions. Today, AI-enabled systems can also provide personalized guidance to customers that can help organizations level-up on their customer experience, while maintaining a lower cost of delivering that experience. is a case in point. Their chatbot helps customers identify interesting activities and events that they can avail of at their travel destinations. Business leaders should explore such applications that provide the double advantage of improving customer experience, while maintaining strong bottom-line performance.

    The possibilities for the new AI-enabled enterprises are as exciting as they are varied. The ideas shared in this article are by no means exhaustive, but hopefully seed in interesting ideas for powering improved business performance. Strategy leaders and business heads need to consider how their AI-led businesses can help disrupt their existing value chains for the better, and unlock new ideas for improving bottom-line and top-line performance. This will usher in a new era of the enterprise, enabled by AI.

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