AI Unveiled: What Business Leaders Need To Know

AI is revolutionizing the way businesses operate across countless industries. From transforming financial forecasting to optimizing customer service, its potential to improve efficiency, predict outcomes and automate processes is making it an indispensable tool. But AI isn’t a universal solution. It demands careful implementation and continuous human oversight. If we can achieve this, the next few years promise even more dramatic advancements that will reshape entire business models.

Finance and beyond

AI has already made financial forecasting more sophisticated by letting CFOs integrate multiple data sources, build complex models and better mitigate risks. Unlike traditional methods that depend on historical data, AI's ability to process and learn from real-time information leads to more accurate and timely predictions. As a result, financial institutions can better anticipate market shifts and respond faster to emerging trends.

AI systems can also identify anomalies and deviations in near real time, flagging potentially fraudulent transactions almost instantaneously, compared to older methods where detecting patterns could take months. For example, an AI system can set off an alert if a U.S.-based company’s payroll suddenly includes direct deposits from an unfamiliar foreign source. This makes it possible for companies to protect their assets and customers more effectively.

Retailers are using AI systems to analyze customer buying patterns. They can then implement dynamic pricing and adjust inventory based on things like weather patterns and regional trends. For instance, a grocery chain might use AI models to place cold beverages near the front of the store in anticipation of a heatwave in particular zip codes.

AI systems are revolutionizing quality control in manufacturing by helping ensure products meet tolerance specifications. An AI-linked camera can scan a product on a production line and determine whether it falls within acceptable standards, minimizing the need for manual checks and reducing the risk of human error. In healthcare, AI is being used to improve patient care by streamlining scheduling, offering treatment recommendations based on historical patient recovery results and coordinating communication between patients, health providers and insurance companies.

Process automation and system integration

One of the most transformative aspects of AI is how it can automate processes in ways traditional robotic process automation (RPA) tools can’t. AI models can adapt to changing formats and learn from their mistakes. For example, if a company’s invoice format changes, they can detect the new format and adapt as needed. This frees up employees to focus on more value-added strategic activities. Additionally, when it can not self-correct it will inform you of the issue for manual intervention.

AI is also making system integration faster and more efficient. Pretrained models can automatically translate data formats and provide API code for enhancement, which reduces the burden on IT staff and minimizes the trial-and-error phase in programming. This is especially useful for platforms like Dynamics or SAP, where integration can be complex and time-consuming.

Good data, bad data

Despite their potential, every new technology comes with its own set of challenges. With AI, data governance is essential, and companies using these systems must ensure their processes are clean and consistent to avoid feeding models inaccurate or incomplete data. In some ways AI models are like children; if they learn bad behavior, they’re going to keep engaging in bad behavior.

Employees must understand what AI systems can do, what they can’t do and how to control them. Sensitive information such as financial data or intellectual property needs to be carefully guarded to avoid unauthorized access. Human oversight is crucial across the board, since “hallucinations” can lead to inaccurate or biased results.

A paradigm shift

AI has been around for decades, but recent leaps in processing power and accessibility have made it more practical and affordable for businesses of all sizes. Models that cost millions of dollars to build years ago are now available for $100 a month or less. People will always have to be involved in the decision-making loop, but the frequency and the level of in-depth verification will start to fall as models become more robust and routines are put into place to automatically check outputs.

AI is a game changer for businesses willing to invest strategically and carefully. It won’t replace workers but will instead enhance their existing capabilities. By understanding AI’s abilities and limitations, companies can use it to make better, more informed decisions and improve efficiency across their operations.

Originally published in Forbes.