Though many global organisations remain confused about AI and its relevance, a rapidly changing new set of global economic challenges, societal living pressures, post-pandemic realities and political uncertainties means it ought to be central to digital transformation initiatives, says H2O.ai’s Prashant Natarajan.
You’re a CEO of a mid-range company and you’re looking for transformation. At the same time, you’re dealing with the complex realities of a UK economy coming out of COVID, Brexit, and being battered by the global economic shock waves of the tragic invasion of Ukraine.
Does messing around with something like Artificial Intelligence even fit into this?
If you don’t have a lot of time today to think about this—and believe me, I can’t blame you—I’m going to give you a simple filter to see if you need me to persuade you it does:
If you’re not convinced AI can’t bring in or save at least $5M dollars of extra revenue per year, then don’t do it.
But, if these new revenue or opportunities are interesting, and your gut tells you that there is room for growth or optimization, please read on. AI is making a difference in several industries already – and this article explains how you can leverage it to serve your stakeholders and customers.
The Real Reasons You Want AI
First off, for me, transformation isn’t merely about digitization or digital data collection, or even putting the data to work. The real value of digital transformation happens when you create positive experiences and journeys: for your employees, for your customers, for your partners, for others in your ecosystem that you’re serving.
Digital value is more than a well-laid out strategy or siloed program successes. Value creation with digital requires we generate new business and human outcomes – consistently and coherently across your organization, and beyond your existing digital and physical presence. To be impactful and sustainable, the digital value created and enabled by AI has to be predictable, scalable, and measurable in terms of outcomes.
The many studies and white papers in the “wild” indicate that financial outcomes and business value of digital transformation initiatives are works in progress, and also the parts of enterprise transformation and change management that companies are struggling with.
AI & Digital Are Inseparable
The good news is that this is where AI comes in. After all the hype, AI has three core business drivers. Number one is it’s a great way of looking into the future and understanding the impact of the three types of ‘known knowns and unknowns’ (thank you, Donald Rumsfeld). And this should really grab your attention, because the unknown unknowns include all the terrifying Black Swan events we’ve seen this century, from 911 to COVID to Putin.
And I’m not talking astrology; I’m talking using real information you couldn’t access otherwise to help you course correct. You would rather do that with reliable insights about what the future holds—which AI in 2022 can genuinely deliver, as it’s able to hoover up all your data (and other people’s) and come up with better techniques than the statistical techniques that have been used by humans for the last 300 years to predict the future.
By nature, we are all prediction creatures; we start the day by checking out what the weather looks like for the rest of the day, farmers start out the year by figuring out what’s going to happen, when they need to plant and when they need to harvest; governments plan to decide budgets. But getting a handle on the future as a CEO has to be a definitional feature of any digital or enterprise transformation. And here, AI is the best latest method we’ve come up with to help you do that more reliably.
AI is a way to open that magic box and finally mine all that unstructured data for wisdom and treasure.
Vice President Strategy and Products, H2O.ai
A Way to Unlock the Treasure in the Majority of Your Organisation’s Data
That’s one foundational reason. The second reason you want to look at AI to get that extra $5m for your bottom line is 80% of all the data in an enterprise is unstructured: it’s text not organised on a database, it’s images, it’s recordings, it’s videos, it’s comments that people are making about your company on social media channels without mentioning you but mentioning your product or your competitors product.
Historically, we have struggled to get any value out of all that. If you look at the trillions of dollars spent on information technology over the last 50 years, it’s all been focused on that 20% of the rest, the structured data, because that’s all we had, and is the easiest to access and understand. But that’s just not enough to capture reality, as it’s like giving a child a telescope and saying, This is the one lens you must use for the rest of your life, and you’ve got to use this to describe the world.
That’s ridiculous, and again, AI is a way to open that magic box and finally mine all that unstructured data for wisdom and treasure. AI can help because it can do things such as natural language processing, computer vision, and intelligent character recognition, in ways that were impossible even three years ago. Is there another option other than AI to be able to do that? I don’t see one today or on the near horizon.
The third reason AI is going to be something you want to be looking at right now is that if you’re not aware of it, you and your company will become merely an observer. It’s been estimated that by 10am, you’re already exposed to a few thousand machine learning models – via smartphone apps, weather forecasts, news and media, personalized customer engagement, and risk and fraud prevention programs among others. By the time you’ve had your second meeting of the morning, it’s a lot more. Would you not want to not just be aware of all this, but control how your data is being used and you and your market’s behaviour being shaped – to benefit your customers, too line, and bottom line.
Harness AI as a Part of a Digital Transformation You Measure in Terms of Business Impact
So, CEOs that want to bury their head in the sand and ignore all of this can do so. But the world is not going to stop moving forward.
However, if you approach AI with some objectivity and moderation and stop reading crazy people thinking chatbots are sentient, and also start to try and harness AI as part of a digital transformation that you measure in terms of business impact—I know you’re going to be fine.
The final point, obvious to some, but not all, is that it is critical to get the humans involved with the AI journey. Humans–not just as people contributing the data to the AI, but humans as owners, leaders, contributors and stakeholders. The future of business transformation is symbiotic intelligence – where AI complements and enhances organizational knowledge, employee satisfaction, customer happiness, via transformation at scale.
Start thinking this way about digital transformation in our volatile times, and I think you’re finally going to get somewhere. And AI could really help—and if your team can’t show you how it will move the needle, don’t let them start until they can.
ABOUT OUR GUEST WRITER
Vice President Strategy and Products, H2O.ai
Prashant Natarajan is the Vice President Strategy and Products, H2O.ai, and lead author of Demystifying AI for the Enterprise: A Playbook for Business Value & Digital Transformation (2021). He’s an enthusiastic, collaborative, and results-focused executive who loves building new businesses, transform existing ones, and ensure happy & repeat customers.