Artificial intelligence and machine learning have the capacity to reinvent and revitalize industries like never before. It’s no surprise that up-and-coming companies and savvy entrepreneurs are looking to leverage artificial intelligence not just for data analytics but also for higher-level operations, like decision-making.
This article will discuss some of the biggest ways AI will affect business decision-making in the future.
How Will AI Affect Business Decision-Making?
As of 2023, approximately 35% of companies use AI in some capacity. Another 42% of businesses currently explore AI for its implementation in various industries and uses in the future. Most importantly, 91.5% of leading businesses invest in AI regularly.
It’s clear that AI will affect business decision-making and all other aspects of business going forward. But how?
Data Analysis and Augmentation
Many companies already use AI for high-level, comprehensive data analysis and augmentation practices. Most businesses collect a wealth of data on their target customers these days, and for a good reason: the more data those businesses have, the better they can understand their audiences and create targeted marketing campaigns.
But some brands use AI tools to go above and beyond this aspect. They’re allowing AI platforms and algorithms to analyze data and come to conclusions about data sets independently. Those AI tools can then funnel decisions or recommendations of the human supervisors, enabling executives to get high-level, bird’s eye views of data and make rapid, accurate decisions.
This is likely the biggest arena in which AI will affect business decision-making. Even the best data scientists can occasionally analyze data incorrectly, and processing large data sets can be time-consuming and slow.
AI tools don’t have these limitations. They can analyze lots of data much quicker and more accurately than the best human counterparts, then provide decisions or recommendations to top-level executives when needed.
Automated Decisions via Predictive Analytics
As mentioned above, some brands and businesses may use AI to automate certain decisions using predictive analytics software. Predictive analytics is a sub-sector of data analytics that involves predicting consumer behavior, market trends, and other future developments.
AI is inherently very skilled at predictive analytics as it can take large data sets and derive conclusions or patterns from the numbers. Given this fact, businesses are increasingly automating certain decisions by leaving them in the hands of AI custodians or platforms.
For example, larger companies may allow AI tools to make purchasing or supply-related decisions. In this way, they can ensure they never run out of stock of their core products while also ensuring they don’t order too much stock that overflows their warehousing space.
As another example, medical clinics can utilize direct patient communication software that provides actionable data and analytics to help them make the best medical decisions for their patients.
Similarly, AI may affect business decision-making by taking over some rote decisions, such as scheduling, email marketing decisions, and more. Likely, a human will still need to oversee or drive high-level strategies and decisions, but many of the responsibilities in middle management positions could potentially be offloaded to AI tools for productivity in the future.
Higher Understanding of Target Customers
The most successful brands are those that have their target audiences dialed in. AI could affect decision-making in this arena, as well, by providing businesses with a higher, more accurate understanding of their target customers.
For example, an AI tool can look at demographic and customer behavioral data and determine things like:
- What kinds of marketing materials will those customers likely respond to?
- When are customers receptive to new products?
- What do customers think of new products or ideas?
- What will the sales for new products be?
AI tools can safely send this information to marketing teams and department heads, especially if they use secure file transfer services with security features such as AES-256 and TLS 1.2 encryption.
With this information, business owners can make wiser, more strategic decisions that result in greater profits and better customer retention. By directly changing the decisions that companies make concerning their customers, AI will transform business decision-making.
Customer Relationship Management Prioritization
In the long term, AI can even affect decisions related to customer relationship management. By analyzing specific customer profiles and their purchase histories, AI tools may be able to recommend where a brand should focus its CRM efforts.
Say that a business has to choose between dedicating extra time to one set of clients or another set of clients. Once an AI tool examines the available data, it can recommend doubling down on fostering a relationship with one set over another based on things like customer lifetime value/CLV, previous customer behavior, and other factors.
All of this will help businesses make the most of limited time and resources, resulting in better, more profitable decisions and more satisfied customers.
Above All, Support for Human Decisions
More than anything else, though, artificial intelligence’s primary role in business decision-making will be support-oriented rather than executive. Put another way, AI tools will likely be used to supplement human decision-making and business strategies rather than replace them.
Even the most experienced business owners and entrepreneurs can’t make 100% accurate decisions all the time. They are still prone to human error and biases. AI tools can cut through those biases and provide recommendations or analyses of key data sets without the same downsides.
At the same time, executives make the final decisions because they understand the intangible, human-related factors necessary for successful business choices. Don’t be surprised if many executives or managers have AI assistants or algorithms helping them decide what’s best for their companies in the next few years.
Concerns About AI in Business Decision-Making
Even with all these benefits, some entrepreneurs and business leaders are concerned about bringing artificial intelligence into the business decision-making sphere. After all, major decisions have always been the arena of human decision-makers. There’s no guarantee that an AI, even with lots of valuable data, will make the right decision for a company.
Furthermore, relying on AI tools in areas as important as business decision-making will necessitate ethical rules and guidelines. Many organizations may find themselves forced to comply with AI ethics guidelines, such as limits on how the AI can use consumer data, when AI can make decisions, and when machine learning tools can affect consumer tastes or decisions.
If left unchecked, AI decision-making algorithms and platforms have the potential to cause lots of damage or abuse consumer data. Time will tell whether these concerns ever fully actualize or if they remain ethereal “boogeymen” for scaremongers looking to eliminate the possibility of AI affecting business decisions and corporate strategies.
AI is here to stay. The most successful businesses in the future will undoubtedly be those who lean into this development rather than push it away. While there are some concerns and potential pitfalls associated with AI business decision-making, those can likely be avoided with the right planning and technology.