Why AI is the Technical Keystone Businesses Need to Compete in the 21st Century
Imagine running your business today without electricity. It would be impossible. Just as electric power transformed every industry in the late 19th century, Artificial Intelligence (AI) will have the same impact on every business in the 21st.
According to Forrester, companies with data-driven business capabilities are 2.8x more likely to report double-digit year-over-year growth than firms that are still at the beginner stage. At the heart of these data-driven capabilities is AI ‒ the technology that can unlock actionable insights from data that would be difficult to impossible for a human to uncover themselves. Distributors need AI to get smarter about every aspect of their business, drive increased productivity, stay ahead of change and disruption, and remain competitive.
What distributors need to know about AI
AI is already part of our everyday lives. It is the technology powering everything from Amazon’s “similar products” recommendations, to email spam filters, to GPS navigation and the ads we see on our Facebook feeds. AI technology supports some of the biggest business success stories of our time and is predicted to create $4 trillion in value for sales and marketing by 2030. Still, it has yet to transform distribution.
AI provides businesses with forward-looking capabilities, enabling them to open new opportunities and prepare for potential risks. This ability to “learn from the future” is the first Signal of Change in Accenture’s Business Futures 2021 report, which highlights the changes most important for businesses to understand in order to be successful in the future. AI finds new patterns in real-time data so businesses can take advantage of opportunities that would otherwise be invisible. Armed with AI, companies have enhanced visibility into growth opportunities and can respond effectively to the rapid pace of change in the modern digital-first economy.
What is AI?
The first step in using AI technology to its full advantage is to understand what it actually is. While you may hear the terms AI, machine learning and deep learning often used interchangeably, they aren’t the same.
Artificial intelligence (AI) is the umbrella term to describe technologies that allow machines to process information like the human brain. Put simply, AI is a machine that can do tasks that formerly required human intelligence. AI solves the problems it is programmed to; it can’t ideate.
Machine learning is a subset of AI that enables machines to learn and improve with experience. These algorithms identify patterns in data, and make more accurate predictions the more data they have available to them. This is why AI model predictions, recommendations and insights are more accurate as more data is analyzed over time. The rate in which machine learning models can analyze data and identify patterns far exceeds that of a human, or even a large team of people.
Deep learning is a subset of machine learning that structures algorithms in layers, similar to the way the human brain works. This creates an “artificial neural network” that can make logical decisions and predictions on its own. These models take a significant amount of training in order to get them learning on their own, but once trained are capable of making extremely sophisticated predictions. Deep learning is made possible with the exponential growth of computing power that makes training models faster and cheaper.
The growing impact of AI on distribution and beyond
According to Gartner, the business value of AI will reach $5.1 billion by 2025. AI adoption is increasing in most industries and distribution is no exception. AI propels business success by anticipating customers’ needs and enhancing efficiencies.
AI delivers deep insight to anticipate customers’ needs
Good relationships with customers are a cornerstone of lasting business success, especially for distributors. While technology such as AI might seem like the antithesis of human connection, the right AI platform enables customer service and sales reps to proactively meet customers’ needs (and grow revenue). AI analyzes customer data such as order history and buying behavior, and can then suggest product recommendations specific to each customer. Empowered with these insights, customer service and sales reps suggest relevant products and services at the time a customer historically needs them. Exemplary service elevates customer satisfaction and generates more revenue for sellers, and with AI-powered insights, achieving this is much easier.
Data is the fuel that drives AI. Since the distribution industry has massive amounts of data, it is primed to rollout AI-powered tools and technologies successfully. AI can centralize the data and connect the dots to identify sales and other opportunities for success. Since your team won’t be wasting time managing Excel spreadsheets to identify these insights, they can focus on building relationships.
AI enhances efficiencies to save time and money
By increasing productivity and efficiency with AI, your team is freed to focus on higher-level responsibilities. AI is very effective at completing mundane, repetitive tasks accurately ‒ the kinds of things that can cause humans to lose focus and introduce errors. It can support a distributor’s business operations from supply chain, inventory and delivery management, to helping make accurate financial predictions.
According to McKinsey, 63% of executives report revenue increases and reduced costs where AI is used across business units.
Additionally, the right AI-enabled platform doesn’t require extensive training or radical protocol changes to get immediate results.
Don’t get left in the dark
AI is now accessible to distributors of any size, not just those with deep financial resources. Without AI to mine the data, your company will start to fall behind – the last left in the dark when others are embracing the latest technology to pave their way into the future. The benefits of AI compound: more data, more insights, more improvement. Since AI runs on momentum, the earlier you adopt AI into your operations the more likely you’ll thrive.