The State of AI-Driven Digital Transformation
Over the past decade, digital transformation has been changing and re-inventing the way organisations conduct business. Essentially, it is the process of leveraging digital technology to create new or modify existing customer experiences as well as business culture and processes, to meet changing customer and market needs. Digital transformation is a foundational change in how an organisation delivers value to its customers.
Here’s where artificial intelligence (AI) is poised to become the game changer. As a catalyst in the digital transformation journey of many organisations, AI is often undervalued. However, there’s no denying that this liberating technology can help businesses become more adaptive, creative, flexible and innovative than ever before. It can not only help businesses win new customers and mitigate risks, but also raise their profits.
A 2017 study by Infosys found that 98 percent of respondents who had leveraged AI for their digital transformation reported that it helped generate additional revenue for their organisations. The same study also revealed that machine learning has had the biggest impact in digital transformation by drastically reducing the average time spent on day-to-day activities and improving decision making while minimising room for errors.
Not just that. In another study by Forrester, 71 percent of respondents reported that AI can improve business efficiency while 59 percent said that it can improve scalability. In addition, 55 percent of respondents said AI can help predict customer behaviour, leading to the development of improved products and services.
The big question: How can AI be applied in the digital transformation process?
For a long time, AI was in the discovery stage while scientists made great progress in researching how deep learning can be used to recognise patterns and make predictions. However, we are now in the age of implementation: Entrepreneurs, product managers and engineers need to transform these algorithms into successful businesses. AI expert Kai-Fu Lee says, “Implementation is what makes academic advances meaningful and what will truly end up changing the fabric of our daily lives.”
One of the most popular uses of AI is in the areas of customer service and customer experience. Some 52 percent of consumers and 65 percent of business buyers are likely to switch brands if a vendor doesn’t understand their needs and personalise their communications accordingly. Customers also hate to be kept waiting when they’re looking for support. They detest having to type in a lot of information about their issue and being transferred a number of times before reaching the right support representative.
Porsche has invested heavily into a centralised CRM data centre that documents every interaction throughout the customer lifecycle. This allows it to understand the psyche of its customers and their expectations at every touch point. Using predictive intelligence and real-time segmentation, the automaker is able to drive more effective marketing campaigns. For example, it reaches out to people who are actually interested in buying at that moment, resulting in very high conversion rates.
As discussed in a recent case study co-authored by Joerg, lifestyle conglomerate Majid Al Futtaim (MAF) gained internal buy-in for digital transformation with the help of persuasive use cases centred around customer data and AI. In one case, MAF’s cinema chain used machine learning and association rules to discover new snack combinations for bundling at theatre concession stands.
