4 Ways AI is Revolutionising Traditional Business Models

Author

Michael Ridland

Category

AI, Business, Data

Date

07 / 08 / 2024

Artificial intelligence (AI) isn’t just a technological advancement; it’s a development that’s reshaping entire industries. By automating processes, personalising customer experiences, and driving innovation, AI enables businesses to rethink traditional models and adopt new strategies. According to ADAPT’s CIO Edge Survey (February 2024), AI’s top three anticipated implications are efficiency, innovation, and new opportunities. AI is creating new business strategies that were previously impossible, offering value creation, cost efficiency, and increased revenue opportunities. 

1. Automation: Enhancing Efficiency and Reducing Costs

According to the ADAPT CIO Edge Survey, automation and machine learning are top priorities for Australian CIOs, and it’s no surprise. AI business solutions streamline and optimise business processes, increasing productivity and growth potential. Automation has the potential to transform business efficiency and productivity by handling routine tasks across various industries and functions, including:

  • Data Entry and Document Processing – AI can automate repetitive tasks such as data entry and document processing, reducing the time and effort required and minimising human errors.
  • Customer Support with Chatbots and Virtual Assistants – these tools provide instant, personalised responses to customer inquiries, reducing wait times and improving customer satisfaction. AI chatbots can handle a large volume of queries simultaneously, ensuring consistent and efficient customer support.
  • Predictive Maintenance – AI-driven automation can automatically detect and prevent equipment malfunctions, maximising operational efficiency and minimising downtime. By continuously monitoring equipment and predicting potential failures, AI helps reduce maintenance costs and extend the lifespan of assets.
  • Resource Management – automated AI algorithms optimise energy usage, supply chain operations, and workforce management. By analysing patterns and making real-time adjustments, AI minimises waste and leads to significant cost savings through efficient resource allocation.

According to McKinsey and incredible 45% of work activities could be automated using AI. But the idea isn’t to replace human workers but instead to augment their abilities. Enabling workers to focus on more strategic activities, further enhances overall efficiency and reduces operational costs. This shift not only leads to substantial time savings but also reduces the likelihood of human error, providing a more reliable and efficient business operation. 

2. Personalisation: Improving the Customer Experience 

As our lives become increasingly interconnected, delivering personalised customer experiences is becoming critical. Personalisation strengthens the relationship between companies and customers, enhances satisfaction, fosters loyalty, and drives repeat purchases. AI product development is a considerable driver, enabling businesses to analyse vast amounts of customer data—including demographics, browsing behaviour, purchase history, and social media activity to deliver personalised experiences at scale. By leveraging AI algorithms, businesses can generate customised product recommendations, craft targeted marketing campaigns, and tailor offers to individual preferences.

AI-driven personalisation transforms customer experiences by individualising services to cater to unique needs. For example, streaming services like Spotify analyse listening habits, genre preferences, and mood to craft playlists that resonate with each listener’s tastes. In retail, e-commerce platforms use AI to recommend products based on past purchases and browsing history. Similarly, financial institutions can offer personalised financial advice and products based on customers’ credit scores and transaction patterns.

According to ADAPT’s Edge Insights, only 27% of Australian CIOs say they’re effective at capturing customer value. This value is not just about revenue or profits but also about how easy it is for customers to engage with companies and get what they need. AI-driven personalisation could significantly improve this interaction. According to Gartner, by 2026, 30% of new applications will use AI to deliver personalised adaptive user interfaces, up from less than 5% today. This increase will boost sales, enhance customer loyalty, and improve satisfaction, as customers feel understood and valued. By integrating AI business solutions into customer interaction strategies, businesses can create more meaningful and personalised experiences, ultimately driving greater customer engagement and long-term loyalty.

3. Big Data Analytics: Driving Decision-Making

Traditional data analytics methods often struggle to handle large and complex datasets. This is where AI-powered analytics comes into play, revolutionising the way businesses process and analyse data. AI excels at quickly processing massive amounts of structured and unstructured data, uncovering hidden patterns, correlations and trends, and providing insights that were previously unattainable. Not only are these predictions more accurate, but the actionable insights derived from AI analytics also facilitate informed decision-making, enabling businesses to swiftly adapt to changing market dynamics.

AI-powered big data analytics can transform business models across various industries. For example:

  • Retail –  by analysing historical sales data, weather patterns, seasonal trends, and local events, AI algorithms accurately predict customer demand. This optimisation reduces stockouts, minimises excess inventory, and improves product availability, leading to cost savings and enhanced customer satisfaction.
  • Finance – AI algorithms enhance the accuracy of risk models, enabling better decision-making in credit scoring, investment strategies, and fraud prevention.
  • Healthcare – machine learning models can process medical records, genomic data, and clinical trials to identify potential health risks and recommend personalised treatment options, enhancing the overall quality of care.

AI systems continuously learn from data, allowing them to improve their predictions over time. This iterative learning process enables algorithms to adapt and refine, becoming more accurate with each new piece of information. Ultimately, by leveraging AI, companies can make informed decisions, identify growth opportunities, and stay ahead of the competition.

4. Innovation: Creating New Revenue Streams 

AI product development isn’t just enhancing traditional business functions but fundamentally transforming industries and creating new opportunities for value creation and monetisation By unlocking hidden patterns within data, automating complex processes, and personalising customer experiences, AI business solutions are driving innovation at an unprecedented pace. Some examples of innovation across industries include:

  • Autonomous Vehicles – companies like Tesla are leveraging AI to create autonomous driving technologies that promise to transform transportation. This innovation is leading to new business models, such as autonomous ride-sharing services and AI-driven logistics.
  • Energy Management – AI algorithms can analyse data from smart metres to forecast energy demand and supply, enabling better energy management and cost savings. This innovation is giving rise to new business models focused on energy-as-a-service.
  • Healthcare Tools – AI-driven health tech companies are creating subscription-based services for continuous health monitoring and AI-powered diagnostic tools that can be used in telemedicine. 

From developing intelligent products and services to creating entirely new markets, AI is reshaping the competitive landscape. By harnessing the power of AI, businesses can identify new opportunities, tap into previously unexplored markets, meet emerging customer needs, and stay competitive in a rapidly evolving landscape.

The AI Imperative for Business Success

AI’s adaptability and scalability make it a must-have asset for optimising processes, reducing costs, and driving innovation. From machine learning algorithms that predict customer behaviour to natural language processing systems that improve communication, AI business solutions span every industry, reshaping both internal and external processes. Ultimately, the impact of AI is undeniable and cannot be ignored; it’s an indispensable tool for businesses across all sectors and will be fundamental to helping your business thrive.