7 Benefits of Artificial Intelligence (AI) for Business

From generative AI-powered chatbots to forecasting tools that use machine learning, artificial intelligence is quickly becoming an integral part of business operations. AI tools can take over time-consuming tasks and automate a whole range of processes. But what are the real benefits of artificial intelligence in business? Is it worth the investment?

Many major enterprises, from Microsoft to Google, certainly think so. In this guide, you’ll discover more about the benefits of artificial intelligence in business and some trends that could shape the next evolution of AI.

Defining Artificial Intelligence (AI)

What is AI? AI technologies aren’t yet true artificial intelligence — they can’t truly replicate human thought processes. What they do is, in many ways, more impressive.

AI is a collection of algorithms that can work through huge swathes of data incredibly fast. AI develops and continuously improves itself using advanced techniques and methods, including machine learning, deep learning, and neural networks. Human intervention is required to ensure AI-based tools have the right training data and that biases aren’t inadvertently introduced to the algorithms.

For businesses, AI represents a fast, reliable way to sift and utilize the ever-increasing volumes of data streaming in from customers and partners.

Examples of AI Today

One of the best ways to understand the benefits of artificial intelligence in business is to see how it’s already being used.

• At least 50% of businesses state that they use AI for at least two business functions.
• Sales and marketing are the most common areas to adopt AI, with product development not far behind.
• McKinsey research shows that all industries are expecting to invest heavily in AI over the next three years.

The same research shows that AI helps businesses cut costs and increase their bottom lines. Businesses can leverage generative AI for automated comments and customer service responses. This frees up personnel for other business-critical tasks. AI tools can also ensure that all leads delivered to human sales reps are qualified. In other words, sales teams won’t waste precious employee hours chasing leads that weren’t ever going to convert.

The most common examples of AI in business are:

• Generative AI tools: These tools use machine learning algorithms like natural language processing/generation (NLP/NLG) to create new content such as text, images, or music based on input from a user. Generative AI is applicable in many industries for content creation, product development and design, and personalized marketing.
• Business intelligence (BI) platforms: BI tools leverage AI to analyze large volumes of data and provide actionable insights. These platforms help businesses make data-informed decisions by identifying trends, forecasting future outcomes, and optimizing operations through advanced data analytics.
• Development tools, such as automatic code generators: These AI-powered tools assist developers by automatically generating code snippets, suggesting optimizations, and even creating entire applications based on predefined parameters. They enhance productivity and reduce development time.
• Analytics platforms: AI-driven analytics platforms process vast amounts of data to uncover patterns and insights that would be impossible to detect manually. They support predictive analytics, customer behavior analysis, and performance tracking.
• Cybersecurity augmentation: AI enhances cybersecurity by identifying potential threats, monitoring network activity, and responding to security breaches in real-time. Machine learning algorithms can detect anomalies or vulnerabilities and predict attacks before they occur.
• Market research and target audience segmentation: AI tools analyze consumer data to provide deep insights into market trends and customer preferences and behaviors. They help businesses segment their target audience more effectively, enabling personalized marketing strategies and improving customer engagement.

As AI advances, it’s likely to be integrated into even more aspects of business operations.

How Can Businesses Use AI?

As you’ve seen, AI systems for businesses range from chatbots to business intelligence tools. Businesses are using these AI technologies in various ways, from enhancing social media management to improving forecasting.

Companies can gain access to these benefits by partnering with or subscribing to services from AI companies like OpenAI or IBM’s watsonx. There are also a number of off-the-shelf AI-powered platforms from providers such as HubSpot, Salesforce, and Tableau, to name just a few.

It’s also possible for firms with in-house development teams to build their own, fully bespoke AI solutions. However, this requires team members with a deep understanding of AI, machine learning, and the impact these technologies have on modern business.

What Are 7 Benefits of Artificial Intelligence in Business?

You’ve learned some of the general uses and benefits of AI in business. Here are seven more specific uses of AI that many businesses are already taking advantage of.

#1 – Improved Decision-Making

AI-enabled decision-making is faster and smarter because it can deliver the data business leaders need in real-time. If a marketer wants to know whether to continue a campaign, for example, AI can quickly show how the campaign has performed so far. However, AI may also indicate current market fluctuations and other factors that could impact campaign success. Marketing leaders can access these insights fast and make snap decisions with confidence — based on accurate data.

#2 – Increased Efficiency

By automating repetitive tasks, AI powers higher efficiency across a range of business processes. Data entry, for example, is time-consuming and not the best use of a skilled professional’s time. When done manually, it’s also prone to human error. AI-powered tools can receive notifications once data changes in one system and automatically update it in related systems.

Some AI-enabled systems can even scan handwritten documents and save the writing as text that can later be edited. This is a feature of some modern electronic health record (EHR) systems for healthcare firms. AI ensures that both digital and handwritten records are combined in one place for the benefit of the patient, healthcare providers, and insurers.

#3 – Enhanced Customer Experience

Customers expect businesses to be available 24/7, regardless of the nature of their queries. However, it’s not always possible to jump on every inquiry instantly. That’s where AI can help. Thanks to natural language processing (NLP) and natural language generation (NLG), chatbots and automated emails can handle many customer queries.

Brands can take customer service to the next level by replying to all social media comments in real time. AI can also promptly answer messages or emails and create a highly personalized experience by leveraging NLG.

#4 – Cost Reduction

One business process that requires high levels of attention is budget management. By speeding up business operations and reducing the need for human intervention, AI can help cut costs significantly. In manufacturing, for example, AI can streamline quality control procedures using pattern recognition among other techniques. A higher quality product with less wastage represents a major saving for many manufacturing facilities.

#5 – Risk Management

AI utilizes historical data to make predictions about the future. Risk management becomes simpler because AI can make recommendations that are only based on data with virtually no bias. AI can also assess much larger volumes of data than a human, ensuring all recommendations utilize information from multiple sources. Insurance is just one industry that benefits from this, with AI making recommendations about costs, claims, and client behaviors.

#6 – Innovation

Generative AI is excellent for brainstorming and creating new ideas that help innovators spark off each other. However, analytical AI can also be a creative force. An understanding of current and future trends that are powered by millions of gigabytes of data helps research and development (R&D) departments. With the right data, they can ensure that they create a perfect product-market fit for a truly competitive advantage.

#7 – Predictive Analytics

Predictive analytics is a branch of advanced analytics that uses historical data, statistical algorithms, and machine learning techniques to identify the likelihood of future outcomes based on historical data. AI enhances predictive analytics by enabling the analysis of large datasets quickly and accurately, identifying complex patterns that human analysts might miss. This allows businesses to forecast trends, anticipate market changes, and make data-driven decisions with greater confidence.

Example: Consider a retail company using predictive analytics to manage inventory. By analyzing historical sales data, customer preferences, and external factors such as seasonal trends, AI can predict which products will be in high demand in the upcoming months. This enables the company to optimize stock levels, reducing both overstock and stockouts. As a result, the company can increase sales, improve customer satisfaction by always having the right products available, and reduce costs associated with excess inventory.

What’s the Future of AI for Businesses?

AI in business is constantly evolving. Scalable solutions will require imagination and innovation, with business leaders looking at how entire workflows can be reformulated using AI. Developers with AI experience will be in demand, especially those who understand the ways AI can drive business success.

Predicted trends for AI in business include:

• Increasingly human-like language generation: AI models will produce text virtually indistinguishable from human-written content, potentially enhancing customer service interactions, content creation, and report generation.
• Enhanced personalization: AI will drive increasingly sophisticated personalization for business marketing, tailoring content and campaigns to individual preferences and behaviors to improve customer experiences and conversion rates.
• Microtargeting via granular audience segmentation: AI-powered tools will empower marketers to create highly specific audience segments, enabling precise microtargeting and maximizing marketing ROI.
• Highly accurate and longer-range predictive analytics: AI will power more accurate predictive analytics, empowering businesses to forecast long-term trends, optimize supply chain logistics, manage inventories better, and improve overall financial planning.
• More roles that require AI-powered tools for increased efficiency: As AI becomes an essential aspect of business, more roles will require proficiency in these technologies, necessitating ongoing training and upskilling for effective utilization.

This latter point is critical. AI isn’t about replacing humans, but about augmenting their skills with the right data and tools to do their jobs better.

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Frequently Asked Questions (FAQs)

How does artificial intelligence benefit businesses?

AI offers numerous benefits for businesses, including task automation, improved efficiency, reduced human error, and enhanced customer satisfaction. By leveraging AI, companies can streamline operations and provide better service.

How does AI help business intelligence?

Business intelligence (BI) involves analyzing and utilizing vast amounts of data from various sources. AI can efficiently sift through this data, identify patterns, and present fully actionable insights, enabling informed decision-making.

What are the advantages and disadvantages of AI in business?

AI in business offers transformative advantages, such as increased efficiency, automation of repetitive tasks, and data-driven decision-making that far outweigh any potential drawbacks. While challenges like initial setup costs and the need for skilled personnel exist, the long-term benefits of AI, including cost savings, improved accuracy, and enhanced customer experiences, make it a worthwhile investment for businesses looking to stay competitive and innovate.