This post originally appeared on Entrepreneur.com - #Growing Your Business
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Previously relegated to Hollywood fantasy, artificial intelligence (AI) is now one of the fastest-growing industrial capabilities. In fact, AI as an industry is projected to surpass $390 billion globally by 2025, up from $24.9 billion in 2018.
At its core, AI seeks to transform information into intelligent, automated action. The consolidation of data structures and the creation of unique algorithms allow systems to automatically learn and recreate patterns that they’ve previously synthesized.
While tech giants like Amazon, Google and Facebook annually invest hundreds of millions of dollars in AI to develop new products, marketing programs and enhance their platforms, small businesses can also leverage machine learning, a field of computational statistics where algorithms automatically learn and improve tasks without explicit programming, and predictive modeling to improve operations and grow at the same time.
AI and related applied sciences are commonly perceived as advancements that take jobs away from the labor force. However, the core purpose of AI is to make jobs and responsibilities more efficient by automating specific tasks and revamping outdated processes, allowing workers to maximize more critical areas of their profession. Simply put, AI either automates the execution of simple tasks or enhances our ability to perform complex tasks.
In fact, 54 percent of executives have said that AI has already increased their business productivity. Charlie Burgoyne, founder and CEO of Valkyrie, an Austin-based AI-consulting firm, believes that the technology is particularly critical for up-and-coming startups to help reduce burdensome operations.
“AI can be extremely beneficial in the automation of operational functions, such as financial management, risk mitigation, accounting and even legal work,” he explains. “In turn, this allows leadership to holistically understand the state of their company while prioritizing the strategic direction of their business as opposed to focusing on the minutia of the mechanics.”
For example, an owner of a startup apparel company collects data related to purchasing trends and customer patterns, but likely doesn’t have the resources to sift through all the information without taking valuable time away from day-to-day operations. By incorporating that data into custom machine-learning models, the business can better examine how to position popular product lines based on seasonal trends and improve cash flow management and future inventory. And because the data is examined in real-time, a process that would normally take weeks or months can be drilled down to just a few days.
Emerging tech and AI expert Valeria Sadovykh, Ph.D. says that, “Small businesses are in a much better position to savor the benefits from AI, and there should be no excuses for not utilizing basic features for enhanced business decision-making and competitive advantage.”
She adds that small businesses usually have their data “easily accessible with lower volumes and smaller data sets. In addition, in the current environment, every bit of digital information that competitors produce is also available for gathering and analyzing for better decision-making.”
Prioritize the Customer
The old adage that the customer is always right still rings true, but it’s now even more critical to find and maintain a relationship with the right customer. A recent MIT Technology Review Insights survey of more than 1,000 business leaders discovered that 87 percent of respondents have begun deploying AI in their business, with most implementing various programs to improve customer service.
Even though a startup yoga studio or ecommerce jewelry store doesn’t have the capital to match the efforts of billion-dollar conglomerates, they possess an asset that can be just as powerful: customer relations. Knowing who your customer is goes a long way, but providing personalized value goes even further towards creating a cherished bond.
Ninety-six percent of marketers agree that efforts to personalize a business transaction or experience will help to advance the customer relationship. Startups can use AI and personalization to their benefit by leveraging existing data to build a more intimate customer relationship. From immediately notifying a customer about a specific product back in stock or providing up-to-the-minute inventory status, automation can help maintain and reinforce strong customer relationships that save time and result in continued satisfaction.
As Dr. Sadovykh comments, “No doubt that AI can be used to streamline business processes, which is beneficial for both parties in terms of efficiency and cost. However, not all consumers are the same, and for some who are looking for support, individualization and like longer human interaction, traditional AI might diminish returns. In this case, businesses should tap into the Industry 5.0 concept, where consumers can directly interfere with AI to add a personal human touch to automation and efficiency. Businesses would need to designate their AI algorithms per classified customer base to provide a high degree of ‘hands-on’ personalization and customization. That is where human intelligence works in harmony with cognitive computing.”
Collect as Much Data as Possible
Small businesses don’t have the luxury of scores of data that major corporations have at their fingertips, but they can still work with what what’s available to them, whether it’s a new business on the rise or a long-time mom-and-pop shop. Using predictive modeling tools to analyze customer relationship management (CRM) data helps businesses of all kinds discover patterns that can go undetected by the untrained eye, providing insights on how to best target future customers or clients and improve current customer retention.
“If your business is like a car, then think of AI and machine learning as the automatic windshield wipers that provide an optimized view of the road in front of you,” adds Burgoyne. “It’s becoming an essential asset that enables businesses and employees to operate at peak capacity.”
While large corporations tend to take up a majority of headlines, small businesses are still the lifeblood of the American economy. According to the Small Business Administration, there are roughly 30.7 million small businesses in the United States, accounting for nearly half (47.3 percent) the U.S. workforce.
As more and more companies begin to adopt AI and machine-learning capabilities within their business strategies, it’s crucial to examine and understand where AI can automate certain processes. When paird with AI, sales — the quintessential driver of growth for any organization — can increase business leads by 50 percent, according to the Harvard Business Review. The future is also bright across most industries, with estimates forecasting that AI has the potential to boost average profitability rates by 38 percent and lead to an economic increase of $14 trillion by 2035.
Small businesses of all kinds can lean on AI to help strengthen various assets of their day-to-day operations — from sales and customer service to product inventory or corporate finances. Small-business owners who can automate time-consuming responsibilities will end up having more room to grow their core organizational components and ultimately compete with bigger players in the arena.