The value of AI in business and how to select the right tool

05 May 2024 Consultancy-me.com 6 min. read

There is significant hype around artificial intelligence (AI). Apparent is that AI has the potential to disrupt businesses and ways of working, yet the path to maturity is still long. Joe Tawfik, partner at Kinetic Consulting, explores the potential of AI and some of the top use cases, as well as how leaders can actually get started with the fit for purpose AI tool.

Most business leaders understand that AI will impact their business in some way. Like any well-designed strategy, an AI strategy needs to consider the organization’s size, the company's resources, the financial capacity to fund any AI initiative and the likely return on investment.

An AI roadmap for the incorporation of AI into the business should be developed based on the value that can be created relative to the cost and efforts needed.

The value of AI in business and how to select the right tool

Adoption of AI

The adoption of AI has taken off in recent months. Figures from an IBM survey released at the start of 2024 reveal that enterprise deployment of AI tools has increased to approximately 42%. An additional 40% were experimenting and exploring AI tools but had not deployed tools yet.

The IBM survey identified that early adopters are leading the way, with 59% of responding enterprises already working with AI intend to accelerate and increase investment in the technology.

The number of use cases for AI in business has driven the adoption rates. The surveyed enterprises identified key areas of business where AI was either being deployed or was being investigated for future consideration:

  • Automation of IT processes (33%)
  • Security and threat detection (26%)
  • AI monitoring or governance (25%)
  • Business analytics or intelligence (24%)
  • Automating processing, understanding, and flow of documents (24%)
  • Automating customer or employee self-service answers and actions (23%)
  • Automation of business processes (22%)
  • Automation of network processes (22%)
  • Digital labor (22%)
  • Marketing and sales (22%)
  • Fraud detection (22%)
  • Search and knowledge discovery (21%)
  • Human resources and talent acquisition (19%)
  • Financial planning and analysis (18%)
  • Supply chain intelligence (18%)

Most organizations cited the ease of use of AI tools and the need to reduce costs and automate processes as the primary drivers for AI adoption in the workplace.

A variance exists between different countries in the deployment rates of AI. Survey results identified India and the UAE as leading deployment of AI in business while countries like France, Australia and Spain were still in the exploratory stage.

What is the value of AI?

The economic value of AI is considered a massive game changer for sectors and organisations. In a report by McKinsey & Company, 63 generative AI use cases were identified across 16 business functions that were estimated to generate value in the range of $2.6 trillion to $4.4 trillion in economic benefits annually when applied across industries.

The value of AI in business and how to select the right tool

The increase in labor productivity and reduced costs from generative AI can potentially generate substantial economic value. McKinsey estimates the total economic value of generative and nongenerative AI to be between $17.1 to $23.6 trillion dollars.

Generative AI holds the potential to transform the landscape of an entire organization by enhancing function-specific applications and revolutionizing the way internal knowledge management systems operate. Its advanced natural-language processing capabilities allow employees to interact with the system using conversational queries similar to those they would pose to a colleague.

The value of AI in business and how to select the right tool

This interaction facilitates a continuous dialogue, granting teams swift access to pertinent information. Consequently, this accelerates the decision-making process and aids in the formulation of more effective strategies, thereby contributing to the overall value of the organization.

In another research report, also by McKinsey & Company, organizations that adopted AI could show both decreases in costs and increases in revenues. The results across all functional areas that had deployed AI suggest that organizations can realize a tangible and measurable bottom-line improvement.

The value of AI in business and how to select the right tool

Generative AI is likely to have the biggest impact on knowledge work, particularly for activities involving decision making and collaboration, which previously had the lowest potential for automation, said the research.

Further reading: Generative AI can add up to $4.4 trillion in productivity annually.

Selecting the right AI tool

The number of users of AI tools is expected to more than double over the next five years. According to data from Statista, the global number of users will increase from 314 million in 2024 to 729 million in 2030. In the slipstream of booming demand, the number of AI tools is also increasing rapidly, making it challenging for users to pick the right tools.

Key in the selection process is to take a methodical approach to identify the tools which fit best with the use case and functional area.

Identify the role of AI within the organization
Is there a strategy? Do stakeholders understand and accept the strategic value of AI in helping the business reduce costs and increase revenue?

Form a cross-functional AI team
Once AI is identified as having importance to the organization, the next stage is to set up a governance team based on cross-functional team members. This team will help drive changes and ensure value creation is delivered for various stakeholders.

Allocate an AI researcher to the team
The technology is evolving quickly, and new tools are emerging rapidly. The allocation of a researcher will help ensure the most current tools are made available to the team, and the feature sets are known. Often, the use cases can not be developed without first knowing what the tools actually do.

Workshop on how AI can benefit a functional area
Collaborating with functional team members is important to develop the use cases. This is the time to reimagine customer journeys and internal processes to identify ways to enhance the experience, reduce costs and increase revenue

Procure tools to match your requirements
When procuring tools, it's important to take into consideration ease of use, the underlying AI technology, and the employee training required.

Implement a pilot to verify the results
The objective should be to find an AI tool that you can pilot and see if you get the desired results

AI technologies are rapidly becoming pivotal for future value creation for most industries. By taking these steps, organizations can ensure they don’t get left behind.