Understanding the business uses, risks and rewards of artificial intelligence

In the dynamic landscape of modern business, the integration of artificial intelligence (AI) has quickly become a cornerstone of strategic initiatives. From streamlining operations to enhancing customer experiences, AI has emerged as a transformative force across all industries, providing unparalleled opportunities for growth and efficiency across any organization. However, while the increase of AI technologies has unlocked unprecedented possibilities, it also poses intricate challenges that necessitate a comprehensive understanding of both the risks of artificial intelligence and rewards of leveraging these technologies.

Before getting started with any AI initiative, it’s important to have a strong understanding of the AI technologies available and a plan to govern these systems and manage risk.

AI business uses

AI, in its many forms, can be leveraged across industries and functional areas and organizations looking to get started should focus on identifying potential use cases such as repetitive manual tasks with significant data that can be modeled to begin automation, or where the data volume and complexity exceeds human capacity.

As an example, customer service represents one of the most promising domains for AI. Chatbots, having previously provided subpar experiences, can use AI with improved training on organizational data to significantly enhance their performance. Additionally, customer service agents can use AI to access precise answers tailored to each customer's queries.

Similarly, organizations are increasingly prioritizing AI optimization in supply chain management, logistics routing and predictive maintenance, recognizing its significant impact on operational efficiency and competitive ability. These represent a few current uses of AI within various industries, but with such diverse applications there is an abundance of potential.

Benefits of AI and the required skills

There are numerous benefits to implementing AI in your organization, such as:

• Efficiency and productivity gains: AI handles tasks at a pace and scale that humans can’t match, allowing organizations to minimize the labor costs while maximizing the talent of their human capital
• Improved speed to market: AI enables shorter development cycles and cuts the time it takes to move from design to commercialization, delivering more immediate return on investment (ROI)
• New capabilities and business model expansion: AI empowers organizations to expand their capabilities and reimagine business models, fostering agility, scalability and new solutions that cater to evolving market demands
• Improved customer service: AI creates personalized interactions and streamlined support processes to foster increased customer satisfaction and loyalty
• Improved monitoring: AI enables real-time data analysis, proactive identification of potential issues and the implementation of predictive measures, allowing organizations to gain further insights

To achieve the benefits of AI, your organization needs certain skills. While various AI tools are readily available for purchase, when attempting to create unique, custom-tailored solutions, your organization needs to cultivate AI expertise from various sources. Whether sourced internally or externally, AI skillsets are multifaceted with a strong foundation in data science, statistics and mathematics, coupled with proficiency in programming and algorithmic thinking, particularly in modern and distributed computing technologies (e.g., cloud).

Associated risks of AI

Regardless of how your organization embraces AI, this new paradigm will challenge your existing risk management practices. Simply banning AI tools, such as ChatGPT or DALL-E, by decree does not remove risk. Software vendors, such as Microsoft and Google, are already embedding AI into existing products your organization already uses. As such, your organization should establish AI principles and guidelines, instead of rigid policies. The principles serve to reflect your organization's beliefs and values, as well as guide your AI strategy.

Consider how this alignment can bolster your organization's AI strategy and enable the responsible implementation of AI to meet your objectives and goals. Additionally, it is crucial for these AI principles to correspond with identified risks. Illustrative examples of these AI related risks include the following categorized areas:

• Competitive: Business models, intellectual property and job displacement
• Operational: Errors/bias in model output, cybersecurity and compliance
• Financial: Building vs buying AI models, resource allocation and cost benefits
• Reputation: Errors/bias in model output, privacy concerns and competition
• Legal/regulatory: Copyright ability on AI created materials, privacy concerns and cybersecurity
• Societal: Economical, environmental and misinformation impacts

Furthermore, these risks impact your organization differently at each stage of the AI life cycle. Rather than treating AI risk assessment as a one-time undertaking, it’s crucial that your organization works to integrate risk management throughout the AI journey.

Ready to get started?

As organizations integrate AI, it becomes imperative to navigate the complex landscape of AI implementation with a comprehensive understanding of the associated risks and rewards. By establishing robust principles aligned with organizational values, addressing the nuanced requirements of various use cases, businesses can effectively manage the evolving challenges posed by AI adoption.

Baker Tilly's digital consulting team offers a full scope of AI services, from strategy and governance to design and implementation, we can help your organization navigate AI complexity and embrace a proactive approach to risk management so that your organization can harness the transformative power of AI in an ever-evolving technological landscape.

This article was derived from the AI: Business uses, risks and rewards webinar, watch the full recording below.