Making a Strategic Impact with AI Making a Strategic Impact with AI

Produced by Reuters Plus for

Real Time Business - Khalid Khan

MAKING A

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In their eagerness to adopt AI, many businesses focus on specific use cases. But taking a hurried, piecemeal approach has a downside: It keeps organizations from developing a long-term strategy.

Artificial Intelligence (AI) is transforming business in ways that will allow faster and deeper innovation across functions and entire sectors. Global spending on AI is expected to exceed $301 billion by 2026. Recent EY surveys show that most CEOs expect to use AI in the quest for greater productivity — optimizing operations, automating processes, and developing self-service tools such as chatbots.

I think organizations miss a beat when they think about AI only through the use case lens

“Generative AI, in particular, is a catalyst that can drive transformative growth and innovation — but to harness those capabilities, you have to link use cases to specific line items in the profit and loss (P&L) statement.” To accomplish that, companies need to develop an AI strategy that evaluates investments based on their potential value.

Building an AI strategy

Creating a big-picture strategy starts with identifying business problems that AI could solve. GenAI, with its creative potential and ability to analyze large data sets, is set to make an impact in three core areas:

Products and services

Adopting GenAI can aid in the design and development of new products and services. For example, jewelry manufacturers can develop new ideas and designs when a GenAI model is fed composition and specification detail. In the automotive sector, manufacturers are adopting GenAI tools to innovate and speed up the design of new products. In the travel and leisure industry, as in entertainment, GenAI can analyze customer behavior and other external information to create personalized recommendations.

Customers

GenAI has the power to create a more highly personalized experience for customers with targeted digital content and automation that frees up human sales representatives. For example, automated note-taking tools allow human agents to focus more closely on interactions with customers. GenAI tools can assist customer service representatives by suggesting appropriate wording to respond to questions, while chatbots can be trained to generate targeted responses. Combined, GenAI can underpin a concierge-like experience for customers — on a large scale.

Operations

With the right data and algorithms, companies can use GenAI to help streamline processes, drive down costs, and speed up a product’s route to market. GenAI enables leaders to explore new business models and redesign how products make their way to consumers. Because AI algorithms can quickly analyze tremendous amounts of data, GenAI can assist with complicated tasks such as demand forecasting, inventory optimization, and supply chain management.

Implementing a growth-focused approach

Businesses can begin with small projects that demonstrate value quickly, allowing leaders to set the pace for GenAI adoption. “That's important, especially in this rapidly evolving space,” says Khan. “Starting small allows you to calibrate how quickly you want to move, but also demonstrates real value against P&L.” For example, look at ways to automate simple but time-consuming processes such as data entry, or create a sales predictor to help with forecasting.

Leaders need to have a robust data strategy. “The key place to start is with your own data assets and intellectual property,” says Khan. “That’s what’s going to set you apart from your competitors because everyone has access to the same models, but others don’t have the unique knowledge you bring to the table.”

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Organizations should also test many AI applications and embrace failure, Khan notes. “Do rapid experimentation and make a lot of mistakes. That's where you're going to learn,” he says. “Nobody has figured this out yet. Making mistakes will facilitate learning and help to reveal areas where GenAI can bring the most value to your business.”

To do that, Khan suggests installing AI project champions who ensure that investments are consistent with the company’s vision and goals — and keeping efforts aligned with data privacy regulations and guidelines. “These ... AI champions help you responsibly navigate compliance while maximizing the benefit you can get from this disruptive technology,” says Khan.

They also make sure your investments stay consistent with your vision, credo, and sustainability goals.

Khalid Khan, EY Americas Strategy and Transactions AI Leader

IT infrastructure is an important consideration when businesses launch AI initiatives. Some companies maintain on-premises data centers, while others choose to host data in the cloud because of the added flexibility to scale capacity up and down as needed. Either way, businesses need infrastructure that matches their processing needs.

IT infrastructure

A strong AI strategy empowers companies to build resilience in the face of rapidly changing technology. By applying GenAI to proprietary data assets and intellectual property, organizations can maximize value — and set themselves apart from competitors.

Learn how EY teams can help you develop a GenAI strategy