“A company’s approach to value creation requires consciously choosing the precise problem it is solving for the customer and its positioning in the marketplace.”― Marco Iansiti
A peep into the annals of history would tell us how the industrial revolution transformed economies that were erstwhile involved in agriculture and handicrafts into large scale manufacturing through mechanisation and factory system. AI factory is now driving yet another industrial transformation by gathering large data, effective decision making and digitising the operations of the 21st century firms.
Artificial Intelligence is set to transform the modus operandi of businesses and the leadership team needs to reinvent themselves to foster a culture of change and innovation for building sustainable business models that deliver long term growth and prosperity. The advent of AI has set the pace for the dynamic change in the digital ecosystem and all organisations are vying with each other to gain a competitive advantage in the future landscape. Let’s look at some of the ways by which business can deliver superior performance by making revolutionary changes to their operations by leveraging on the strengths of AI
The use of AI is spread across different industries like mobile payments, lending, wealth management, health insurance, credit rating services. These businesses are handled by high end algorithms with the help of sophisticated analytics that remediates concentration risks in niche skills and creates a platform for learning and development. Once AI is designed and deployed, there is a huge potential for generating value through digital automation across the run time. The programs built on the digital core helps in identifying tremendous opportunities for growth across different businesses and reduces the need for human intervention.
Traditional organizations are confronted by the far fletched outreach of AI and need to revisit their operations to compete with the digital revolution. Traditional processes involve a people centric approach in operations management. Traditional companies need to revive their constraints in their workflow and look at different ways of adopting AI driven techniques that would help in remediating their bottlenecks. This would help in revamping their operations resulting in better value proposition for their clients through digitisation and enabling customer centric business offerings. Scale, scope and learning are considered as key enablers that help in achieving higher productivity and optimal costs. Traditional firms run the risks of diminishing returns due to archaic operating models which are dependent on human, labor and decision making. Reinventing traditional businesses with the help of analytics and data driven AI algorithms would help them build a competitive edge over others in the emerging digital ecosystem.
The genesis of AI has given rise to a new age digital operating model called AI factory. AI factory follows a scientific approach in decision making by converting internal and external data into valuable insights for forecasting and projections. Businesses start to function differently and can relate to other digitized firms for developing custom models for predicting customer behavior and providing tailor made solutions. AI factory covers key components like data pipeline, development of algorithms, platform of experimentation and adequate software infrastructure. The transition from traditional to AI based organization requires a concerted effort and the leadership team needs to be wary of risks like loss of privacy and threats in cyber security. Unconstrained growth can be dangerous in the long run and could result in social turbulence due to dislocations, inequality and market concentration. The change needs to be well defined and comply with the regulatory standards and guidelines laid down by governing bodies.
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