Artificial Intelligence (AI) is expanding and improving exponentially through ever more powerful parallel computing, more data, and deeper algorithms—to become an increasingly important facet of everyday life. But what exactly is AI and what does it mean for your business?

AI can be defined as any task performed by a program or machine that—if carried out by a human—would require intelligence. AI applications typically include such “human” behaviors as learning, problem solving, planning, reasoning, knowledge representation, perception, motion, creativity, and even social intelligence.

“Thanks to the growth of big data, advances in algorithms like neutral networks and an abundance of powerful computer hardware, something momentous has occurred: AI has gone from an academic niche to the leading differentiator in a wide range of industries, including manufacturing, health care, transportation, and retail,” stated The New York Times on March 7, 2018.

AI is increasingly touching virtually every facet of our lives, making headlines daily like these from March 2018 in The New York Times:

Self-Driving Trucks Hit Highway, but the Last Mile Is More Complex

Bricklayers Try to Fend Off the Robots

Google Researchers Say They’re Learning How Machines Learn

The Sublime and Scary Future of Cameras with AI Brains

Good News: AI is Getting Cheaper. That’s Also Bad News

Chips Off the Old Block: Computers are Taking Design Cues from Human Brains

And, from The Wall Street Journal during the same period:

S&P Deal Is Latest Push into AI Sector

Dubbed “Hearables,” AI-Enabled Headphones Plot Running Routes, Track Fitness Goals and Coach You Through Workouts

The New Arms Race in AI

AI Helps Identify People at Risk for Suicide

Looking at AI in Terms of Business Capabilities

As AI reaches a tipping point of marketplace acceptance, “It is useful for companies to look at AI through the lens of business capabilities rather than technologies. Broadly speaking, AI can support three important business needs: automating business processes, gaining insight through data analysis, and engaging with customers and employees,” according to a January-February 2018 Harvard Business Review (HBR) article.

AI Task #1: Automating Business Processes

Automation of digital and physical tasks—typically back-office administrative and financial activities—using robotic process automation (RPA) technologies is the most common AI application. HBR states that: “RPA is the least expensive and easiest to implement of the cognitive technologies… and typically brings a quick and high return on investment. It’s also the least ‘smart’ in the sense that these applications aren’t programmed to learn and improve.” Bottom line: If you can outsource a task, you probably can automate it.

AI Task #2: Gaining Insight Through Data Analysis

Using algorithms to detect patterns in volumes of data and then to interpret their meaning) is the second most common type of AI project. “Cognitive insights provided by machine learning differ from those available from traditional analytics in three ways: They are usually much more data-intensive and detailed, the models typically are trained on some part of the data set, and the models get better—that is, their ability to use new data to make predictions or put things into categories improves over time,” reports the HBR article.

“Versions of machine learning (deep learning which attempts to mimic the activity in the human brain to recognize patterns) can perform feats such as recognizing images and speech. Machine learning also can make available new data for better analytics.”

AI Task # 3: Engaging with Customers and Employees

The least common AI projects in the Harvard study use natural language processing chatbots, intelligent agents, and machine learning. Companies tend to use cognitive engagement technologies more to interact with employees than with customers although that may change as firms become more comfortable turning customer interactions over to machines.

In the HBR article, this category includes:

  • Internal sites for answering employee questions on topics including IT, employee benefits, and HR policy;
  • Product and service recommendation systems for retailers that increase personalization, engagement, and sales—typically including rich language or images; and
  • Health treatment recommendation systems that help providers create customized care plans considering individual patients’ health status and previous treatments.

What Are the Business Benefits of AI?

Harvard and Deloitte surveyed 250 executives to learn their goals for AI initiatives. Here is the result:

51% think AI will enhance the features, functions, and performance of their products

36% believe AI will optimize internal business operations

36% say AI will free up workers to be more creative by automating tasks

35% cite AI in helping them make better decisions

32% think AI will help create new products

30% believe AI will optimize external processes like marketing and sales

25% say AI will help them pursue new markets

25% expect to capture and apply scarce knowledge where needed with AI

21% think AI will reduce head count through automation

The Challenges of AI

The same Harvard and Deloitte survey identified several obstacles that can stall AI initiatives, ranging from integration issues to scarcity of talent:

47% think it’s hard to integrate cognitive AI projects with existing processes and systems

40% believe AI technologies and expertise are too expensive

37% say managers don’t understand AI cognitive technologies and how they work

35% think they can’t get enough people with expertise in the AI technology

31% believe AI technologies are immature

18% say AI technologies have been oversold

A Human-Centered Approach to AI

In 2018, the critical ingredients are coming together to propel AI forward well beyond the research labs into the marketplace. Vast volumes of data; powerful, inexpensive computer technologies; and the advanced algorithms needed to analyze and extract insights from those oceans of data—all are combining to create a virtual tsunami of AI applications. The evidence is everywhere—consider the number of companies embracing AI as a key part of their strategies along with the volume of innovative, smart products and services coming to market.

“Despite its name, there is nothing ‘artificial’ about this technology—it is made by humans, intended to behave like humans, and affects humans. So, if we want it to play a positive role in tomorrow’s world, it must be guided by human concerns,” declared The New York Times. We are applying actual intelligence to the creation of AI.