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article imageOp-Ed: AI vs business models — Guess who’s winning

By Paul Wallis     Jan 26, 2018 in Business
Sydney - The typical perceptions of AI, like any new tech, are now biting, hard, at business models. Also typical is the fact that this demonized new tech isn’t behaving as the negatives suggest, nor exactly as the evangelists describe.
AI, in fact, is a work in progress, and these are only early days. What’s happening isn’t a meltdown so much as a reshaping of business models in to what will, eventually, be more efficient forms. That’s been coming for years, and the holdouts in Old Biz are now looking at the Godzilla of tech, despite two decades of retro modelling everything to fit the Flintstones version of doing business.
Even the expression Artificial Intelligence is almost misleading from the start. AI is a VERY broad brush. It’s not some C3PO or an incomprehensible R2D2. It’s not just a new gizmo. It is software, it is “intelligent” in a functional sense. It learns, it evolves, and it creates new paradigms.
Amazon Go is the most frequently cited version of AI in the commercial space. No checkouts, no staff, just pick up your stuff in the store and wave a phone in the general direction of a receiver.
This is also the total revision of a business model which has existed since people first started using money. That’s how far AI can already go in basic business. Many business leaders at C level are reporting significant “disruptions” (a truly hideous, and literally useless, buzzword) on multiple levels, meaning changing methods, changing objectives, and rethinking business in new ways.
Before anyone breaks down in tears at the terrible insecurity of C level business people:
• AI works with people. It’s not independent. Decision making does include AI inputs, but the human factor kicks in when it comes to making the business moves. C level aren’t much at risk, but they’ll be playing musical chairs as AI takes over the nuts and bolts management stuff.
• The old biz models are extinct, anyway. They’re totally inefficient, way too expensive, and arguably the main reason for the bizarre, counterproductive, price-bending, museum-assets-fondling, culture of Big Corporates around the world.
• IT is in the furnace with AI. Machine learning, cognitive computing, call it what you will, IT will never be the same again. AI can write its own languages, rewrite software, and do a lot of the traditional IT jobs itself. The demand on IT will be for brilliance, and probably the help desk roles will evolve in to other areas, too.
Business models come and go. In this case, they’ll go a lot faster and further. Old media is a case in point. What if AI was running Netflix or News Corp? Cheap, efficient, and if not exactly showering people that warm fuzzy glow of human contact, at least AI builds in some pretty good basic working principles. You could pay less for AI media, and get more value, without much impact on the bottom line profits.
The other theory, that AI creates jobs, has yet to be proven very well. There’s no doubt at all that AI-literate jobs will be the next wave. Whether that translates in to a proven net increase in jobs is a long way off.
If AI works in marketing, it’s game over for Old Biz.
One area where AI may mesh well, or not, with business models is marketing. AI tends to base itself on information efficiency, like marketing, but that doesn’t mean AI reads the same tea leaves as marketers.
Modern marketing, using Big Data and its ever-evolving quite complex analytical methods, is a tougher nut for AI to crack than a retail operation. Some marketers, in fact, use their own version of AI, their brains, to manage big cumbersome data. It may be that AI is a major positive asset to the Big Data handling, particularly if it can be customized to go looking for market info data.
Some marketers, in fact, would welcome some added analytical grunt to assist in the often laborious process of sifting through the mountains of dubious data, particularly the highly spun variety. The likely result is better marketing, better profits, and (surprise, surprise), instant vindication of AI at this very demanding level.
If that works, say goodbye to the old biz models ASAP. You won’t be able to compete, particularly on the global scale, if you don’t.
Can’t resist a dig at my own area – Advertising and content. AI can deliver real numbers for advertising, and evaluate content in practical forms such as SEO/clickthroughs/conversions which will make current methods look like astrology.
Expect Google to jump like a pole vaulter when they get a grip on managing their products, too. The solution to lacklustre online ads, and their imbecile overkill sales methods, should be very interesting indeed.
The New Economy now has its AI messiahs. Read ye good and learn well from the Book of AI as it’s written, and avoid ideological commitments.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
More about Artificial intelligence, AI and business models, Amazon Go, old biz vs new biz, market analytics
 
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