How Artificial Intelligence Is Changing Digital Transformation
Blog: Solutions Review - Business Process Management
As part of Solutions Review’s Contributed Content Series—a collection of articles written by industry thought leaders in maturing software categories—Rajan Nagina, the Head of Newgen Software‘s AI Practice, explores how artificial intelligence (AI) is changing digital transformation.
For the last three decades, organizations have been encouraged to focus on achieving efficiency for their business through digital transformation. While digital transformation has enabled organizations to enhance their efficiency and agility, it is equally important for organizations to maintain focus on how they can generate and capture value through digital technologies, a crucial aspect of the transformation process.
Artificial intelligence (AI) has become a game-changer in deriving value, driving new opportunities, and jumpstarting a company’s digital transformation journey. Embedding AI into the business’s technology landscape brings tremendous results, including data-driven decision-making, personalized services, higher efficiency, and improved customer loyalty. Let’s dive into how (and why) that’s the case.
AI-Led Digital Transformation
An Accenture report states that enterprises that successfully deploy artificial intelligence can increase profitability by nearly 38 percent by 2035. Enterprises today seek to transition from digital transformation to AI-led digital transformation as AI is closely tied to value creation, driving businesses to think bigger and transform at scale.
Unlocking Business Value with AI
AI can impact all aspects of an organization, including automation of back-office services, driving sales and retention, refining personalization from customer and market insights, and analyzing unstructured data to discover new opportunities. While the possibilities are endless, a few areas of impact include:
1) Creating a Meaningful Connection with Hyper-Personalization
A robust market strategy is futile if businesses do not connect with their customers meaningfully. With AI, analytics, data, and automation, companies can go one step further and create highly contextualized communication. Using data gathered on each customer, AI-powered systems can achieve deeper levels of personalization and customer engagement. AI-powered hyper-personalization can allow companies to use unique customer data to share personalized product recommendations and unique discounts and create detailed customer profiles. Machine learning algorithms can quickly identify customers with a higher risk of churn and enable companies to focus their retention efforts on valuable customers, hence saving costs in the making.
2) Bringing Intelligence into Risk Management
A risk management system supported by AI can help organizations lower regulatory and compliance costs while improving decision-making. Machine learning engines can quickly analyze large, complex data sets and generate real-time prediction models to identify, predict, and address risks. AI provides a transparent link between business processes and risks, ensuring corrective actions are taken to mitigate risks. Let’s look at fraud detection; companies that use cognitive technology such as natural language processing systems can unearth new patterns that humans cannot and detect complex fraud.
3) Supporting Strategic Decision-Making with Data
Data has been the backbone of modern businesses, but how it is leveraged makes all the difference. Organizations can enable intelligent decision-making by deploying AI tools to analyze historical and real-time patterns and trends. With predictive analytics, organizations can achieve actionable predictions of market trends, develop new products, manage budgets, optimize operations, and understand customer behavior. Data analysis can help organizations identify bottlenecks and inefficiencies in business processes and potential risks. By understanding these factors, executives can make data-driven decisions to optimize workflows, improve productivity, and seize new opportunities.
4) Achieving Business Process Efficiency
Artificial intelligence tools such as robotic process automation (RPA) and intelligent process automation (IPA) can drastically improve business processes. Per a Deloitte survey, RPA adoption has increased productivity by 90 percent, improved quality and accuracy by 90 percent, and enhanced compliance adherence by 92 percent. Machine learning algorithms continuously learn from the data collected to automate manual processes and improve automation quality. Automated business processes also empower employees to dedicate their time to tasks that generate higher organizational value.
The exponential growth of AI capabilities has allowed businesses to harness the full potential of digital transformation. AI does not only address discrete business challenges. By fully grasping AI techniques and deep learning, it can create and drive business value across various aspects of an organization, including decision-making, productivity, risk management, and customer-centric approaches. In the age of value creation, businesses must embrace AI and strategically harness its power to maintain a competitive edge.
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