[ESSEC Knowledge] by Ivana ljubic - Professor at ESSEC Business School, Academic director of the ESSEC & Mannheim EMBA program
Artificial Intelligence (AI) is making a profound impact on various aspects of our lives and work, revolutionizing multiple industries. This transformation is attributed to three major factors: increased processing power, cloud computing, and the availability of real-time data. AI's definition evolves over time as we become accustomed to previous technological advances, and what we consider AI today will become mainstream tomorrow.
The integration of AI and Business Analytics (AI+BA) is playing a pivotal role in improving decision-making across different organizational levels: strategic, tactical, and operational. While Netflix uses AI+BA for operational decisions like content recommendations, it also employs BA for strategic decisions, such as capital budgeting, based on user data predictions. Similarly, UPS utilized AI+BA to automate efficient route planning for drivers, resulting in significant fuel savings.
Organizations like Decision Brain optimize public bike hire systems through AI+BA, using real-time forecasting and optimization algorithms to manage inventory and improve user experience.
However, there are instances where human judgment should not be replaced by algorithms. For complex, long-term, or sensitive decisions, AI+BA can provide valuable analysis and recommendations, but human oversight is crucial to prevent unintended consequences, discrimination, and biases. It is essential for business leaders to understand the challenges, opportunities, and limitations of AI and analytics in today's data-driven world.
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