Business decision making redefined by AI
October 26, 2018
Artificial Intelligence will deliver revolutionary impact on how enterprises make decisions today. In the last few years alone, we have rapidly moved beyond heuristics-based decision-making to analytics-driven decision-support. In the VUCA phase, businesses globally are now pivoting to an AI-led, algorithm-augmented style of decision-making. With huge computing power and ever-increasing data storage and analytics prowess, we are entering a new paradigm, a probable and interesting scenario wherein, Artificial Intelligence will play a huge role in augmenting human intelligence and enabling decision-making with complete autonomy. The big hope is that this new paradigm will not only reduce human biases and errors that are common with heuristic decisions, but also reduce the time involved in making these critical decisions.
Here, I’ll attempt to focus on how we moved from simpler data driven decision-support to AI-powered decisions. The evolution of this technology has been breathtaking to behold and just might provide clues as to what we can expect in the future. Further, I’ll cover a few critical aspects that need to be inculcated by organizations on the AI transformation journey, and provide a few insightful cues that will make this journey exciting and fruitful.
Transformation of Decision-Making: From Analytics to AI
First, let us look at how we got here. Some truly pathbreaking events happened along the way while we were trying to make more accurate business decisions, leading us to reimagine how decisions will be made in the enterprise.
Organizations are Becoming Math Houses
With data deluge and digital detonation, combined with the appreciation of the fact that robust analytical capabilities lead to more informed decisions, we are witnessing AI savvy organizations rapidly maturing into ‘math houses.’ Data science – the ability to extract meaningful insights out of data has become de rigueur. Why? Because we now know that data, when seen in isolation, is inherently dumb. It is the ability to process this data and identify patterns and anomalies – using sophisticated algorithms and ensemble techniques – that makes all the difference. These self-intuitive algorithms are where real value resides – as they define the intelligence required to uncover insights and make smart recommendations. Organizations today are evolving into algorithm factories. There is a real understanding today that by enabling continuous advancement in mathematical algorithms, we can deliver consistent decisions based on prescribed as well as evolving business rules.
It is now an established reality that companies with robust mathematical capabilities possess a huge advantage over those that don’t. Indeed, it’s this math-house orientation that separates companies like Amazon and Google from the ones they leave in their wake, with their ability to understand their customers better, identify anomalies and recognize key patterns.
AI: From Predictive to Prescriptive
We saw a similar evolution in the age of analytics – wherein the science and value veered from descriptive analytics, providing diagnostics of past events to prescriptive analytics, helping see and shape the future. We are seeing a similar evolution in how AI gets leveraged in the enterprise and where its maximum value lies.
In early implementations, it was common to see AI as just a tool to predict and forecast future conditions, while accounting for the dynamism seen in the external environment. Today, AI-enabled decision-making is more prescriptive, with AI providing enterprises not just a look into the future, but also key diagnostics and suggestions on potential decision options and their payoffs. Such evolved applications of AI can help businesses make decisions that can potentially exploit more business opportunities, while averting potential threats much earlier.
Mr. Algorithm to Drive Decision Making
The culmination of this AI-era advancement would be the introduction of smart algorithms in every walk of life and business. Algorithms will become further mainstream leading to what will be the most sweeping business change since the industrial revolution. Organizations – those that already aren’t – will start developing a suite of algorithmic IP’s that will de-bias most enterprise decisions.
If Mr. Algorithm is going to drive most enterprise decisions of tomorrow, we need to create some checks and balances to ensure that it does not go awry. It is more critical today than ever before that the algorithmic suite developed by enterprises has a strong grounding in ethics and can handle situations appropriately for which explicit training may not have been provided.
How to Enable this AI Era of Change
Ushering into an AI-centric era of decision-making will require organizational transformation from business, cultural and technical standpoints. The following facets will be the enablers of this change:
Developing an Engineering Mindset
Instrumenting AI in the enterprise requires a combination of data scientists and computer scientists. As AI matures in the enterprise, the users, use cases and data will increase exponentially. To deliver impactful AI applications, scale and extensibility is critically important. This is where having an engineering mindset comes in. Imbibing an engineering mindset will help standardize the use of these applications while ensuring that they are scalable and extensible.
Learning, Unlearning, Relearning
The other critical aspect to a culture where AI can thrive is creating an environment supporting continuous unlearning and relearning. AI can succeed if the people developing and operating it are rewarded for continuous experimentation and exploration. And just like AI, people should be encouraged to incorporate feedback loops and learn continuously. As technology matures it’s important that the existing workforce keeps up. For one, it’s critical that the knowledge of algorithm theory, applied math alongside training on AI library and developer tools, is imparted into the workforce – and is continuously updated to reflect new breakthroughs in this space.
Embedding Design-Thinking and Behavioral Science at the Center of this Transformation
Finally, given the nature of AI applications, it’s critical that they are consumed voraciously. User input very often activates the learning cycles of artificial intelligence applications. To ensure high usage of these applications, it’s very important that we put the user at the center while designing these applications. This is where the application of behavioral sciences and human-centered design will deliver impact. By imparting empathy in these applications for the user, we will be able to design better and more useful AI applications.
As we augment decision-making with algorithmic, AI-centered systems and platforms – the big expectation is that they will bring untold efficiencies in terms of cost, alongside improvement in the speed and quality with which decisions get made. It’s time to reimagine and deliver on enterprise decision-making that is increasingly shaped through artificial intelligence. These aspects – how the AI is progressing and how to exploit its potential are of paramount importance to keep in mind for an AI transformation.