Digital innovation spurred by Covid-19 has put AI and analytics at the center of business operations. AI and analytics are boosting productivity, delivering new products and services, accentuating corporate values, addressing supply chain issues, and fueling new startups. In this article, we address lessons learned from the pandemic and how they can be applied to spurring new economic opportunity.
When it comes to digital transformation, the Covid crisis has provided important lessons for business leaders. Among the most compelling lessons is the potential data analytics and artificial intelligence brings to the table.
During the pandemic, for example, Frito-Lay ramped up its digital and data-driven initiatives, compressing five years’ worth of digital plans into six months. “Launching a direct-to-consumer business was always on our roadmap, but we certainly hadn’t planned on launching it in 30 days in the middle of a pandemic,” says Michael Lindsey, chief growth officer at Frito-Lay. “The pandemic inspired our teams to move faster that we would have dreamed possible.”
The crisis accelerated the adoption of analytics and AI, and this momentum will continue into the 2020s, surveys show. Fifty-two percent of companies accelerated their AI adoption plans because of the Covid crisis, a study by PwC finds. Just about all, 86%, say that AI is becoming a “mainstream technology” at their company in 2021. Harris Poll, working with Appen, found that 55% of companies reported they accelerated their AI strategy in 2020 due to Covid, and 67% expect to further accelerate their AI strategy in 2021.
Will companies be able to keep up this heightened pace of digital and data-driven innovation as the world emerges from Covid? In the wake of the crisis, close to three-quarters of business leaders (72%) feel positive about the role that AI will play in the future, a survey by The AI Journal finds. Most executives (74%) not only anticipate AI will deliver more efficient make business processes, but also help to create new business models (55%) and enable the creation of new products and services (54%).
AI and analytics became critical to enterprises as they reacted to the shifts in working arrangements and consumer purchasing brought on by the Covid crisis. And as adoption of these technologies continues apace, enterprises will be drawing on lessons learned over the past year and a half that will guide their efforts well into the decade ahead:
Business leaders understand firsthand the power and potential of analytics and AI on their businesses. “Since Covid hit, CEOs are now leaning in, asking how they can take advantage of data?” says Arnab Chakraborty, global managing director at Accenture. “They want to understand how to get a better sense of their customers. They want to create more agility in their supply chains and distribution networks. They want to start creating new business models powered by data. They know they need to build a data foundation, taking all of the data sets, putting them into an insights engine using all the algorithms, and powering insights solutions that can help them optimize their businesses, create more agility in business processes, know their customers, and activate new revenue channels.”
AI is instrumental in alleviating skills shortages. Industries flattened by the Covid crisis — such as travel, hospitality, and other services — need resources to gear up to meet pent-up demand. Across industries, skills shortages have arisen across many fields, from truck drivers to warehouse workers to restaurant workers. Ironically, there is an increasingly pressing need to develop AI and analytics to compensate for shortages of AI development skills. In Cognizant’s latest quarterly Jobs of the Future Index, there will be a “strong recovery” for the U.S. jobs market this coming year, especially those involving technology. AI, algorithm, and automation jobs saw a 28% gain over the previous quarter.
AI is a critical ingredient to creating solutions to what is likely to be on-going, ever-changing skills needs and training, agrees Rob Jekielek, managing director with Harris Poll. “AI is already beginning to help fill skills shortages of the existing workforce through career transition support tools. AI is also helping employees do their existing and evolving jobs better and faster using digital assistants and in-house AI-driven training programs.”
AI will also help alleviate skills shortages by augmenting support activities. “Given how more and more products are either digital products or other kinds of technology products with user interfaces, there is a growing need for support personnel,” says Dr. Rebecca Parsons, chief technology officer at Thoughtworks. “Many of straightforward questions can be addressed with a suitably trained chatbot, alleviating at least some pressure. Similarly, there are natural language processing systems that can do simple document scanning, often for more canned phrases.”
AI and analytics are boosting productivity. Over the years, any productivity increases associated with technology adoption have been questionable. However, AI and analytics may finally be delivering on this long-sought promise. “Driven by advances in digital technologies, such as artificial intelligence, productivity growth is now headed up,” according to Erik Brynjolfsson and Georgios Petropoulos, writing in MIT Technology Review. “The development of machine learning algorithms combined with large decline in prices for data storage and improvements in computing power has allowed firms to address challenges from vision and speech to prediction and diagnosis. The fast-growing cloud computing market has made these innovations accessible to smaller firms.”
AI and analytics are delivering new products and services. Analytics and AI have helped to step-up the pace of innovation undertaken by companies such as Frito-Lay. For example, during the pandemic, the food producer delivered an e-commerce platform, Snacks.com, “our first foray into the direct-to-consumer business, in just 30 days,” says Lindsey. The company is now employing analytics to leverage its shopper and outlet data “to predict store openings, shifts in demand due to return to work, and changes in tastes that are allowing us to reset the product offerings all the way down to the store level within a particular zip code,” he adds.
AI accentuates corporate values. “The way we develop AI reflects our company culture — we state our approach in two words — ‘responsible growth,’’’ says Sumeet Chabria, global chief operating officer technology and operations at Bank of America. “We are in the trust business. We believe one of the key elements of our growth — the use of technology, data, and artificial intelligence — must be deployed responsibly. As a part of that, our strategy around AI is Responsible AI; that means Being customer led. It starts with what the customer needs and the consequence of your solution to the customer; Being process led. How does AI fit into your business process? Did the process dictate the right solution?”
AI and analytics are addressing supply chain issues. There are lingering effects as the economy kicks back into high gear after the Covid crisis — issues with items from semiconductors to lumber have been in short supply due to disruptions caused by the crisis. Analytics and AI help companies predict, prepare, and see issue that may disrupt their abilities to deliver products and services. These are still the early days for AI-driven supply chains, a survey released by the American Center for Productivity and Quality finds only 13% of executives foresee a major impact from AI or cognitive computing over the coming year. Another 17% predict a moderate impact. Businesses are still relying on manual methods to monitor their supply chains — those that adopt AI in the coming months and years will achieve significant competitive differentiation.
“Supply chain planning addressing disruptions in the supply chain can benefit in two ways,” says Parsons. “The first is for the easy problems to be handled by the AI system. This frees up the human to address the more complex supply chain problems. However, the AI system can also provide support even in the more complex cases by, for example, providing possible solutions to consider or speeding up an analysis of possible solutions by completing a solution from a proposal on a specific part of the problem.”
AI is fueling startups, while helping companies manage disruption. Startups are targeting established industries by employing the latest data-driven technologies to enter new markets with new solutions. AI and analytics presents “a tremendous opportunity for both startups and established companies,” says Chakraborty. “Startups cannot do AI standalone. They can only solve a part of the puzzle. This is where collaboration becomes very important. The bigger organizations have an opportunity to embrace those startups, and make them part of their ecosystem.”
At the same time, AI is helping established companies compete with startups through the ability to test and iterate on potential opportunities far more rapidly and at far broader scale,” says Jekielek. “This enables established companies to both identify high potential opportunity areas more quickly as well as determine if it makes most sense to compete or, especially is figured out early, acquire.”
The coming boom in business growth and innovation will be a data-driven one. As the world eventually emerges from the other side of the Covid crisis, there will be opportunities for entrepreneurs, business leaders and innovators to build value and launch new ventures that can be rapidly re-configured and re-aligned as customer needs change. Next-generation technologies — artificial intelligence and analytics — will play a key role in boosting business innovation and advancement in this environment, as well as spur new business models.