The Impact of Artificial Intelligence on the Business World
Today, human beings live in the most interesting period in history characterized by emerging technologies such as the internet of things, data science, big data, cloud computing, and artificial intelligence. These emerging technologies are transforming almost every aspect of people's lives. Specifically, the rate at which they are advancing facilitates the birth of the fourth industrial revolution through hyperactive connectivity and automation (Park). Mainly, the improvement of AI is the spine of improved performance of all other technologies and the evolution of the business world. Abbreviated as AI, artificial intelligence has demonstrated incredible progress accompanied by revitalized techniques that have challenged the human capacity to perform a wide variety of tasks ranging from speech recognition to playing complicated games. The rate at which AI is resurrecting has surprised many organizational leaders including Sergey Brin, a co-founder of the Google Company who was amazed by the recent surge in practical application for artificial intelligence. Neural networks and deep learning supplemented with accessibility to a vast amount of data and new computational hardware are some of the approaches that have considerably yield positive results than traditional methods in the field of machine translations, image recognition, and speech synthesis (Holmquist).
According to Bloomberg Intelligence, an artificial intelligence software is going to be the most disruptive force in technology in the coming ten years and organizations that employ AI are likely to gain a competitive advantage while their competitors become extinct. Therefore, artificial intelligence will continue to advance and provide many benefits to the business world. However, it will come with negative effects such as certain job loss, (Marr). Despite the negative consequence, AI has made remarkable strides in recent decades and will be instrumental in the facilitation of human to machine interactions and affect the business world positively.
History of AI
The emergence of artificial intelligence began in ancient times with myths and stories of artificial beings credited to the intelligence or consciousness by master artisans. It is important to note that classical philosophers are responsible for the birth of modern artificial intelligence. Mainly, they endeavored to define human thoughts as mechanical manipulation of symbols. This attempted definition led to the invention of the programmable digital computer, a system based on the abstract essence of mathematical logic, in the 1940s. The ideas behind this machine encouraged several scientists to begin researching the possibility of discovering an electronic brain. Therefore, the idea behind artificial intelligence has been there for centuries.
However, the breakthrough of artificial intelligence was discovered in 1956 at a workshop at Dartmouth College (Kaplan and Michael). Those who attended the workshop became the research leaders on artificial intelligence. Many of the researchers predicted that a machine with the capacity of human intelligence would be discovered in a generation to come. Notably, according to Aguis, a variety of scientists, philosophers, and mathematicians had the concept but it was not until Alan Turing suggested that the development of the machine would it become possible through the employment of the available information. Eventually, in the 1970s, the researchers realized how difficult this was and the United States and British governments stopped investing in the research of artificial intelligence. Thus, investment in artificial intelligence research was halted paving way for the period known as the artificial winter.
However, seven years later, an idealistic initiative spearheaded by the Japanese government motivated industries and other governments to invest funds and skills in the artificial intelligence research, but by the end of the 80s, the investors were let down by the unavailability of the required computing power and withdrew their support again. Notably, major investments and interests grew during the initial decades of the 21st century, when machine learning was incorporated in the academic institution's curriculum because of the new methods, application of great computer hardware, and collection of a large volume of data sets. Since then, artificial intelligence has advanced fuelled by machine learning algorithms, cloud computing, accelerated interests and heavy investments (Bloomberg Intelligence). Specifically, the market for products, software, and hardware related to artificial intelligence reached at least eight billion dollars by 2016 (Lohr). In fact, according to Bloomberg Intelligence, in the next years, all software applications could embrace the embedded artificial intelligence. Early examples involve Amazon Alexa, messaging chatbots, IBM Watson, Google Photos, and Google Assistant.
Such achievements in the field of research have propelled the increment of the establishment of artificial intelligence-based companies and have produced a myriad of artificial intelligence-based start-ups (Lohr). Notably, since 2012, investment in these start-ups has been increasing as shown in the figure below, indicating the growth of interests, development, and research on artificial intelligence because of its positive influence on the corporate world.
The Impact of Artificial Intelligence on the Business Word
As mentioned earlier, artificial intelligence is influencing businesses positively. Specifically, artificial intelligence is compelling businesses, investors, and entrepreneurs to design new strategies, models, and new sources of business value (Soni et al. 2).
One of the areas artificial intelligence is influencing the corporate world positively includes the improvement of customer experience. In business, customer experience refers to the product of an interaction between a customer and an organization during their relationship (SAS). The product from the interaction is the consumers’ conscious and subconscious perception about the association with a particular brand of an organization during the customers’ life cycle. It is important to note that customer experience is an important part of customer relationship management that is a prerequisite for a successful business. Therefore, engaging with customers is an instrumental component of any business to customer enterprise but artificial intelligence is set to transform these customer support processes in the future.
According to Tolovski, one of the considerable impacts of artificial intelligence revolves around the area of customer experience. Specifically, in e-commerce, approximately 50% of customers insist that they prefer buying items on online platforms, and almost 40% reports that they would share their experience with friends or family. Notably, more than 80% of consumers suggest that they will engage in a business that uses AI programs such as the chatbots (Tolovoski). Therefore, most of the relationships between customers and organizations will be managed without the involvement of human beings. Specifically, software solutions powered by artificial intelligence such as analysis technology will not require the involvement of human being to appropriately gauge the tone of voice of a customer, improving the effectiveness of companies' responses to complaints, queries, and concerns (Bullock). Notably, the application of artificial intelligence such as chatbots and virtual assistants is instrumental in the improvement of customer experience. For instance, using the artificial intelligence program provides quick, enhanced, and dynamic answers to questions, queries, or complaints. Furthermore, it improves the efficiency of the business because it cuts down labor-hours and costs necessitated for conducting research about customers and coming up with solutions to customer's issues. It also helps in building a strong relationship and trust with the customer.
Another area of artificial intelligence important in the business is accounting and finance. Organizations are already deploying artificial intelligence programs in their accounting and finance departments (Giesel 120). Despite the invention of computers, accounting and finance have not experienced major changes for several years. However, artificial intelligence is changing the functioning of the accounting and finance department because of its abilities. Specifically, according to Chartered Professional Accountants of Canada (3), artificial intelligence through cognitive automation is changing the roles of finance and accounting. For instance, artificial intelligence is replacing manual and routine tasks of accounting such as bookkeeping, payroll, entry-level task, AR management, asset approximation, complex audits, and supervision roles in the middle management (Chartered Professional Accountants 6). More specifically, at Deloitte, auditors are using artificial intelligence tools to analyze thousands of deeds and contracts (Giesel 120).
According to Chartered Professional Accountants, accounting and finance are leveraging these artificial powered tools such as advanced analytics solutions to help them develop an in-depth understanding of the emerging market trends, recognize new key performance indicators for performance management, enhance accuracy and timeliness of the forecasting process. Additionally, the digital assistant is essential in the completion of predictable tasks such as responding to normal queries surrounding cash flow management and billing, and identifying accounting policies and procedures. Furthermore, predictive analytics is instrumental in the accounting and finance department because of its ability to detect fraud cases such as false insurance claims, identity theft, and falsified transactions among others (Giesel 120). Marr suggests the use of artificial intelligence is continuing to increase benefits for businesses in the accounting and finance departments. For instance, artificial intelligence is creating an opportunity for human professionals despite replacing several tasks for them. Using artificial intelligence is making accounting professionals productive and proficient. It also enables them to manage more clients, deliver more value since they can establish actionable sight instead of crunching numbers (Marr). Therefore, in addition to cost savings and improvement of operations, artificial intelligence allows accounting, and finance employees to focus on the strategic and core activities of the organization.
Marketing refers to the process of creating awareness about an organization's product or service. Due to today's complexity of the market, marketing is a complex and critical function of an organization. One of the key areas of marketing is market segmentation. Thus, the management needs to identify the customer segments and its characteristics such as needs, tastes, preferences, and price to identify marketing strategies to serve these segments better than the competitors (Giesel 119). Identification of the most profitable or viable market segment is one of the present functions of artificial intelligence-powered tools. Particularly, artificial intelligence programs assist the marketing team in anticipating the needs of the customers, creation of customized or personalized marketing campaigns, identification of the customers’ purchasing trends, and improvement of customer service as discussed earlier. According to Giesel (119), artificial intelligence is paramount in the analysis of large volumes of customer data, recognizing characteristics of regular and new customers depending on the company’s categorization of its consumers. According to Tjepkema, the use of artificial intelligence in marketing involves leveraging customer data and artificial intelligence tools such as machine learning to predict the customer's movement as far as buying patterns are concerned. Notably, the advancement of big data and advanced analytics mentioned above have enabled the sales and marketing teams to extend their understanding of their target markets, helping their organization boost their campaigns' performance and return on investment.
Another area of artificial intelligence is improving includes the human resource management function. One of the basic functions of the human resource department involves hiring and recruiting of employees. It is important to note that one of the critical resources for a successful organization includes human capital. Therefore, the recruitment of effective and efficient employees is one of the determinants of a successful business. Improvement of the recruitment process calls for the incorporation of artificial intelligence tools. Such tools include artificial intelligence-based video interview platforms that use psychometric and biometric analysis to examine interviewees' tone of voice, micro-expressions, body language, empathy, self-awareness, and emotional intelligence among other human characteristics that are culturally fit for the organization (Bullock). Furthermore, artificial intelligence applications including X.ai and ClearFit are crucial in scheduling interviews and saving time in finding and choosing the appropriate candidate for the job position.
Furthermore, in line with the work of the human resource department, artificial intelligence will cause a shift in the job market, leading to the redefinition of jobs to create a way for the digitalization of the business process and operations. Most importantly, automation of the organizational processes and operations will lead to the establishment of job opportunities (Manyika et al.). These new jobs will call for updated technological skills including programming among others. Skills such as creativity, critical thinking, social, cognitive, and advanced information processing will experience growth in demand. Therefore, workflow design and workspace will require restructuring to adapt to automation. However, it is expected from the business leaders to approach this activity in a manner that ensures that employees will work more closely with the machines without replacing them. This will lead to the creation of a safe environment and collaborative work as firms seek to become agile and non-hierarchical (Manyika and Sneader). The safe and collaborative environment will increase productivity, motivation, and efficiency of the workers.
The Impact of Artificial Intelligence on the Job Market
As discussed above, artificial intelligence is improving the operations and processes of organizations in different capacities. Improvement of the processes and operation enhances effectiveness (productivity) and efficiencies (cost savings) of companies adopting artificial intelligence. However, according to Calderone, artificial intelligence will replace all the jobs undertaken by human beings including driving, management of cash flows and billing, recruitment of workers, and handling customer’s complaints or queries among others. Notably, Calderone substantiates that in the coming decade, artificial intelligence will take over up to eight hundred million jobs. Chui, Manyika, and Miremadi (2), certain professions are probably going to be automated. Such careers involve mortgage origination, back-office transaction processing, accounting, and paralegal work (Manyika et al.). Specifically, 45% of jobs performed are likely to be automated by adapting the presently demonstrated technologies (Chui et al., 2). Internationally, artificial intelligence is likely to affect 375 million employees as shown in the figure below.
(Manyika et al.)
However, as mentioned earlier, Manyika et al. demonstrate that the employment of artificial intelligence will result in the creation of new jobs as shown in the figure below. Particularly, embracement of artificial intelligence will aggravate the demand for labor leading to the establishment of job positions in the business world. Notably, Manyika and Sneader designed a scenario which demonstrates that a rate of additional labor demand of between 21% and 31% of the global workforce, more than offsetting the rate of job loss mentioned above. The increase in demand for labor is caused by the growth of the economy, heightened expansion of energy, technology, and infrastructure, wage increment, improved expenditure on health care, and innovation
(Manyika et al.)
Artificial intelligence has demonstrated incredible progress accompanied by revitalized techniques that have challenged the human capacity to perform a wide variety of tasks ranging from speech recognition to playing complicated games. However, the main impact of artificial intelligence has been felt in the corporate world. Mainly, artificial intelligence has transformed several business operations including improvement of customer experience, accounting and finance, sales and marketing, and human resource management. This improvement has resulted in an effective and efficient business enjoying cost reductions and remarkable profitability. However, artificial intelligence has led to job losses, especially in the areas mentioned above. Despite job losses, artificial intelligence is set to create more jobs due to economic growth, infrastructure development, and technological enhancement among others credited to effective and efficient organizations. Therefore, AI has made remarkable strides in recent decades and will be instrumental in the facilitation of human to machine interactions and affect the business world positively.
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