“Disrupt or be disrupted” – A Silicon Valley mantra entrepreneurs swear by.
Businesses are always looking for the secret ingredient to disrupt the industry with innovative new business models. It may not be an entirely new business model. However, it can happen when a new product or service is applied to an existing business model.
Technology is always at the forefront of disruptive innovations and the creation of new business models. At present, Artificial intelligence is spearheading this business disruption revolution. To make a business thrive in this age of constant change, you need radical shifts—something that shakes up the very backbone of industries. The key driver of these shifts? It is the customer, of course!
Disruptive innovation and new business models with AI
If you look at the popular disruptors who have created entirely new business models—something unimaginable a few years back—you will understand my point.
- Uber has changed the scene for traditional taxi services. The highlight is that it placed the customer in the center, making it super easy for them to get a ride and have a pleasant experience. Behind the scenes, Uber uses AI to optimize routes, navigate drivers and partners, predict demand, forecast in real-time, and more.
- Netflix is another new business model and a disruptor that embraced an unconventional approach and placed the customer at the forefront of its bespoke service. It disrupted traditional distribution models, video rental stores, and TV shows and has entirely transformed how audiences engage with and consume media.
Airbnb, Spotify, Canva, Alibaba, Microsoft, and Walmart are all disruptive innovators in their niches. The common factor among them all? Artificial Intelligence is at the forefront of driving this disruptive innovation. It can bestow an SME with capabilities that transcends human limitations and scale up high. With AI, enterprises can focus on customer experience. While AI optimizes operations, manages security, and detects fraud (in the case of BFSI), multifolds the capabilities of employees, predicts outcomes, and personalizes recommendations seamlessly, the enterprise can focus on delighting its customers. Employees can focus on intelligent, higher-value tasks instead of being bogged down by redundancy. The result? Customers keep returning, and business propels ahead.
AI disrupting the scene – an example
Take the example of a traditional bank and a fintech, for example. A bank that has yet to pivot towards digital transformation would deal with critical processes such as KYC (Know Your Customer), loan processing, and credit cards with tremendous manual efforts and documentation. Since each step requires customer identification, verification, risk assessment, and monitoring of the financial activities (which are critical and unavoidable activities), the entire process is slow. Fintech companies, on the other hand, are agile – they accomplish all these activities in minutes. They harness data analytics and Artificial Intelligence to do the heavy lifting and transform operations. All of this is done while ensuring regulatory compliance and keeping customer data safe. Customers are delighted with the speed and efficiency. The story of digital transformation with AI goes for all sectors and industries, not just in the BFSI sector.
The new business models integrate artificial intelligence into the various aspects of the enterprise’s operations. Technologies such as machine learning algorithms, natural language processing, computer vision, predictive analytics, data analytics and generative AI can work to automate tasks, analyze data, find hidden patterns and make data-driven decisions. Let us find out how AI transforms businesses. (Below are a few ways out of many.)
Data Analytics and Insights
One prime way AI impacts business models is through advanced data analytics. AI systems can process massive amounts of data at phenomenal speed. They can uncover hidden patterns and trends from massive datasets that often go beyond human capabilities. This process itself can empower enterprises to make data-driven decisions based on insights, enhancing their strategic acumen.
For instance, retail companies leverage AI to understand customer preferences and buying behaviors. They tailor their products according to customer demands and have focused marketing strategies.
Automation of tasks
Automation of repetitive and tedious tasks brings several benefits for businesses. It saves time and costs, boosts efficiency and productivity, ensures regulatory compliance, reduces errors, and also leads to standardization and cleaner data. The enterprise doesn’t need to stop working, as automation can happen 24/7. With AI and ML-enabled intelligent automation, enterprises can continuously optimize their processes and deliver the best performance.
In manufacturing, for example, an enterprise can automate simple departmental processes, such as flow management in a warehouse, data capturing, predictive maintenance using IoTs and expense approval. Businesses can also automate advanced cross-departmental tasks such as full warehouse automation and support event-driven deliveries.
Tailoring the customer experience
AI plays a pivotal role in customer experience, boosting it and increasing retention rates. AI can offer the benefit of personalization. With AI algorithms, businesses can analyze data, predict customer preferences, and offer tailored recommendations or services. The personalized approach undoubtedly makes it an engaging and satisfying experience for customers.
In the retail sector, for example, Walmart uses AI to provide its customers with a personalized shopping experience. A chatbot that functions as a shopping assistant understands customer intent, context, and preferences to dish out accurate search results. Using NLP and Gen AI, the chatbot assists customers in various tasks, such as planning events and recommending products for an event. It makes the task of shopping online seamless. It also gives concise review summaries and supports customers in prioritizing product features and facilitating decision-making.
Making predictions
AI models can make accurate predictions by analyzing historical data (and real-time data). AI-driven predictive analytics can empower businesses to anticipate the future trends, market shifts and customer behaviors. As a result, enterprises can proactively adapt their strategies and future-proof their businesses.
In the financial sector, organizations leverage AI to detect fraud, assess credit risk, forecast revenue, and predict market trends. Overall, AI can sieve through large volumes of data, identify patterns, mine valuable insights, and make accurate predictions.
Key components of AI for businesses to harness
- Cloud-based infrastructure
Businesses can rely on cloud infrastructure to provide scalable and easily accessible AI resources. Cloud providers such as Microsoft Azure host these AI services, which businesses can harness via the Internet.
- Natural language Processing (NLP)
Businesses can integrate NLP services such as sentiment analysis, language translation, and chatbots. By harnessing these, businesses can enhance their user interactions and provide tailored services.
- Computer Vision
Computer vision capabilities enable image and video analysis. It has a wide range of applications, from facial recognition and object detection to detecting defects in manufacturing units.
- Predictive Analytics
Machine learning models and deep learning can find patterns in an organization’s data repositories and make predictions about future events. This process involves statistical modeling, data mining techniques, and ML combined with historical data.
- Speech recognition
AI-powered speech recognition can convert spoken language into written text. It is helpful in voice assistance and transcription services.
- Data Analytics
Extracting valuable information from large datasets and streamlining data-driven decision-making boosts business growth.
- Generative AI
The latest– generative AI is the most disruptive of all. This AI is capable of creating content based on existing data and is the hot topic for CXOs across sales, customer service, marketing, commerce, app development and more. It can take customer service to new heights, can hyper-personalize according to customers’ preferences, automate repetitive coding and boost developers’ productivity, accelerate research and product design and more. This technology is set to cause a seismic shift and give an enterprise a competitive edge.
To sum up
AI is leading the chain of digital transformation and technological advancements in businesses. It is creating disruptions and new business models that were unimaginable a few years ago. From solving industry-specific needs to coming up with innovative solutions, businesses are pivoting towards AI. As the mantra goes- disrupt or be disrupted- navigating change is the key to unlocking new business opportunities and being ready for the future. If you are looking to leverage AI in your business and require a technology partner, you are at the best place, At Saxon we help businesses in their AI transformation journey.
