How Artificial Intelligence Is Transforming Business Models
- Published: July 17, 2019
- Written by Jayshree Pandya
Businesses across nations are expected to face extraordinary challenges and changes in the coming years. It is believed that automation driven growth will likely be the only constant in those changes. In AI-driven automation, growth means more intelligence from data from connected devices, social media, industry data and more that furthers the potential to revolutionize business models. Over the years, digital data has been growing at a staggering pace across nations. It is essential to understand :(i) how this new data-driven intelligence reality brings each business across countries an entirely new world full of opportunities and risks; and (ii) what the expected consequences for each market (existing and emerging) would be?
Businesses are beginning to understand the implications of the evolving AI-driven automation ecosystem far beyond narrow artificial intelligence applications. While the relationship between data, information and intelligence is complicated, and at times indirect, the force and pace of AI-driven automation changes expected in the coming years will present each business challenges and opportunities for its profitability. It will be fascinating to witness how the AI changes global business power dynamics.
Business Model Transformation
As everything is being connected, businesses now have the chance to collect more data, get the necessary insights, and innovate. As a result, we will probably see a much-needed evolution of the markets: faster marketplaces, leaner operations, vibrant businesses, growing profits, informed consumers and dynamic businesses.
That brings us to a critical point: how are business models being transformed by AI? While businesses across industries and nations are at a different level of AI adoption, it seems that the current approach to AI strategy is overly narrow as businesses mainly focus on using AI for improving customer services, analyze data, predict performance to automate workloads, trading and more. The trend of AI application and adoption still does not respond adequately to rapidly evolving intelligence capabilities. In addition, businesses often may foster an environment of mistrust and animosity towards each other within respective industries and nations. This is perhaps a reason that prevents a common approach to data collection and information access. Moreover, many countries lack the necessary digital data infrastructure. The lack of digital infrastructure, in turn, discourages data opportunities and innovations, making it challenging to address business data and information needs adequately — leaving businesses with outdated data, information and intelligence.
While AI has the potential to transform businesses, business models and commerce across nations, concerns about geopolitics resulting in protectionist data practices and resistance to sharing data and information may thwart its potential. As a result, the possibility of creating and adopting large aggregate data pools and practices at local, national and global levels remain unclear.
AI is not only changing how businesses work; it is also fundamentally transforming the traditional thinking and meaning of collaboration, competition and innovation. While most AI initiatives create competitive advantage by perceiving an entirely new opportunity, enhancing current efforts, supplying a market segment that others have ignored, or creating new markets, connected devices that feed a constant stream of data about functionality, usage, production, needs and more to a central location will create even more fascinating competitive transformations. That brings us to an important point: As the Internet of Thing integration will allow for the development of environments where users and consumers can interact, how will it change business models further, as it will be possible to design experiences over products?
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