[ESSEC Knowledge] by Ivana Ljubic - Professor at ESSEC Business School, where she is the academic director of the ESSEC & Mannheim EMBA program.
AI is now revolutionizing various industries, driven by increased processing power, cloud computing, and real-time data availability. AI's power lies in its ability to improve decision-making using data analytics and business analytics (AI+BA).
AI+BA helps organizations at all levels of decision-making, from operational to strategic. Netflix is an example of using AI for operational decisions through recommendation systems, while also employing BA for strategic choices like content production and capital budgeting.
Operational decisions are becoming increasingly automated with AI, as seen with UPS optimizing delivery routes and bike-sharing systems like London Cycle Hire Scheme ensuring bike availability.
However, there are decisions where human judgment must be retained, especially for long-term, complex scenarios and those with ethical implications. AI algorithms, while well-intentioned, can amplify biases and lead to unintended consequences.
It's crucial for business leaders to understand AI's potential and limitations, promote ethical decision-making, and incorporate algorithmic thinking into their management skills.
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