Have you ever listened to a recommended song on a streaming service? Asked a smart speaker about the weather? Fixed typos in a document thanks to autocorrect? If so, you’ve engaged with artificial intelligence (AI).
AI technologies have been proliferating in our daily lives and work for many years. The recent launch of publicly accessible AI tools, like large language model tool ChatGPT, is raising awareness of the technology’s expanding capabilities.
As a small business owner, what do you need to know to create a successful AI strategy? Here’s how to approach and implement artificial intelligence in business.
What is artificial intelligence?
Artificial intelligence (AI) refers to technology that can perform functions associated with human cognition, such as learning, problem-solving, and creativity. There are different forms of AI, but the field can generally be broken into two primary types:
- Machine learning. This refers to AI technology that makes decisions based on the data it is given. A streaming service algorithm is an example of machine learning: The technology collects data on your song preferences based on what you listen to, then analyzes your data to suggest new songs it thinks you might like.
- Deep learning. A subset of machine learning, deep learning layers multiple algorithms to create what’s called an “artificial neural network” modeled after the human brain, allowing it to learn and draw new conclusions beyond the data it’s originally given. Instead of recommending an existing song, for example, deep learning models could create entirely new songs based on your music preferences. Large language models like GPT-3 and GPT-4 are a subtype of deep learning.
How is AI used in business?
Companies can use AI tools to improve business processes, increase productivity, and support employees in their current roles. There are multiple business applications for artificial intelligence; a 2023 poll from Gartner showed that nearly half of executives plan to increase investments in AI for business. That said, AI isn’t a replacement for human jobs—it’s a resource that requires humans to set up and prompt it to do specific tasks. Here are four applications of this emerging business technology.
1. Customer service
By automating replies to many customers’ common administrative or technical queries, AI can help your customer service team improve response times and lower costs. It also frees up customer experience team members to focus on more complex customer questions. A few examples of AI tools for customer service include:
- Chatbots. Chatbots simulate human conversations to answer a customer’s questions quickly. They are one of the most popular AI technologies, with more than 40% of business-to-consumer (B2C) companies and nearly 60% of business-to-business (B2B) companies using chatbots on their websites.
- Self-service resources. AI tools, like ChatGPT or other software that have integrated AI, can help generate content for your website’s help or FAQ pages based on common customer questions you receive, your product features, and existing resources.
- Translation. If your business operates globally or serves a multilingual customer base, AI can support real-time translation on your website and even over the phone.
2. Sales and marketing
Companies can use AI as part of their sales business strategy to grow leads and reduce costs. There are several ways AI can support sales and marketing business functions:
- Product descriptions. Given a few key details, AI can generate product descriptions in just a few seconds. This can be a powerful move to grow revenue, because the way you frame your product plays a huge role in whether a customer decides to make a purchase. AI can also generate many variants of one product description, so you can quickly test messages against each other and determine which is most effective.
- Personalized recommendations. By analyzing customer data such as browsing history and purchase behavior, AI tools can create customized product recommendations for specific individuals. Ecommerce personalization improves people’s experience on your site and may help in driving more sales.
- Predictive analytics. AI can help you forecast customer behavior by analyzing current data to identify trends and patterns. That allows you to optimize your marketing efforts to target the right audience at the right time.
3. Finance and accounting
AI can help you automate financial business processes, which enhances accuracy and increases efficiency. Some common finance and accounting business applications for AI include:
- Fraud detection. AI can help you prevent ecommerce fraud by flagging suspicious transactions in real time. Catching actions like credit card fraud, chargebacks, or full account takeovers early can help build customer trust and ultimately save remediation costs.
- Automated bookkeeping. With AI-powered process automation, you can streamline repetitive bookkeeping tasks like data entry, sorting transactions, and reconciling accounts.
- Financial forecasting. By analyzing historical financial data, market trends, and goals, AI tools can help you make faster and more informed decisions about product pricing and inventory management based on the likelihood of certain product sales.
4. Human resources
In a 2022 survey of human resources leaders, the majority reported already using AI in some form, and nearly all said they plan on increasing their use of AI in at least one business context. AI tools can support your business processes related to hiring, training, and performance evaluation via:
- Résumé screening. AI technologies can pre-screen résumés to find the most qualified talent for an open role. By relying on data science instead of individual opinion, teams can not only save time but also reduce bias in the recruiting process.
- Employee training. Based on employee performance and training data (such as training completion and information retention) and job descriptions, AI can help human resources teams develop customized training programs to address specific employee skills gaps. Personalized training can improve the effectiveness of training programs, in addition to helping HR accurately measure training engagement and completion rates.
- Performance evaluation. AI tools can look at metrics like customer satisfaction, sales, or hours spent to identify high performers within a company—as well as individuals who may have room for improvement.
Benefits of implementing AI for business
A successful AI strategy offers your business multiple benefits, including:
Increased efficiency
AI offers multiple opportunities for process automation. Streamlining tedious tasks, like sorting through résumés or writing product descriptions, allows employees and business owners to spend their time in more strategic areas. By saving time and reallocating employee resources, AI inherently lowers business costs.
Providing information based on data
AI and data science can harness the power of your company data by synthesizing information better and faster than the human brain and outputting comprehensive analyses.
Easier personalization
AI tools can offer valuable insights into customer behavior, which empowers your business to personalize product offerings, such as recommended products.
Strategic planning
With predictive analytics, AI can help your team identify market trends in regards to competitors, customers, talent, and more—giving your business strategy a competitive edge.
Challenges of implementing AI for business
As an emerging business technology, AI also presents some challenges to businesses, such as:
Poor insights due to poor training
If you don’t provide AI technologies with high-quality data, you will not receive high-quality insights. For example, AI tools, such as résumé screening platforms, have rejected qualified women candidates because the algorithms were trained using men’s résumés.
Employee resistance
Your employees may be concerned that AI tools will replace or diminish human jobs. Be transparent and offer your employees opportunities to learn about working with AI and educate them about how the tools can enhance their day-to-day work. You can offer access to online programs so they can learn how AI can fit into various business functions.
Ethical concerns
AI algorithms present privacy and bias concerns. For example, bugs in AI tools have accidentally revealed private consumer data, such as when ChatGPT revealed users’ chat histories.
Quick-changing rules and regulations
Leaders who study artificial intelligence are increasingly calling for AI regulation. The latest laws around data protection, consumer rights, and anti-discrimination are changing quickly, and you must stay on top of the changes in order to protect your business from legal problems.
AI for business FAQ
Will artificial intelligence eventually replace human jobs?
While AI will shift the need for certain human jobs, tasks, and responsibilities, it will also create new career opportunities. In its current form, AI is a complement for human workers, not a replacement.
How can artificial intelligence improve customer service?
With AI tools like chatbots and writing and translation assistants, technology can help customer service teams improve response times, provide personalized recommendations, and answer customers’ simple queries effectively.
Can artificial intelligence help me make better marketing decisions?
Yes, AI’s data science capabilities, which include analyzing vast amounts of data about customer behavior, can help you make more informed marketing decisions. In addition, AI tools can help generate marketing content such as product descriptions, website copy, and social media posts.
Do I need specialized expertise to implement artificial intelligence?
Some AI tools, like ChatGPT or Shopify Magic, are user-friendly options and can be utilized without special training. To learn more about complex topics like machine learning or deep learning, you can also take premium online short courses.
