Guest post by Matt Buskell of Rainbird
Do you remember 1996? DVDs were launched in Japan, Travelocity became the first online booking agent, eBay and Ask Jeeves opened their online doors, and the Spice Girls had their first UK number one. It was an inflection point in technology.
I spent a lot of time back then trying to convince executives that the internet was going to change the world and they needed to innovate. Not all of them got it. One large UK retailer said this about their internet strategy: “We’ve got it covered. We’ve hired a company to build us a website and they are going to make our product catalogue into a PDF that can be downloaded”. That retailer no longer exists.
Twenty years later we are at another inflection point – this time thanks to artificial intelligence (AI). In my opinion, AI has the potential to be even more impactful than the internet. Organisations need to take it very seriously. Those which don’t are likely to go the same way as that retailer from 1996.
Organisations need to understand AI, embrace it, and focus on it. For most organisations it is new, so they will need to acquire new skills and carve out new budgets. I think this means they will need a Chief AI Officer, or CAIO.
Some will argue that the CIO should lead the organisation’s forays into AI. But most CIOs today are busy reducing IT costs and delivering services in an increasingly complex technical landscape. In short, they are too busy keeping the lights on. Strategy directors and finance directors are unlikely to have the requisite expertise. The impact of AI on organisations will be so profound that it deserves its own department, reporting direct to the CEO.
In the short term, what would this CAIO be doing? The first task in many organisations will be to collate all the data the organisation has, and understand its potential value in helping to raise revenue or reduce costs. This will involve a detailed assessment of what would be required to get it “clean” enough for use by AI algorithms.
Many organisations could then significantly improve customer engagement – externally and internally – by the use of AI bots. Bots using advanced natural language processing technologies will need extensive training on the terminology used within the industry and the specific company.
Perhaps the biggest impact the CAIO and her colleagues will have in many organisations is the development of new business models. In most cases, any new ideas will have to be quickly prototyped, and comprehensive business cases will have to be produced before they are rolled out. For example an accounting firm could put revenue recognition rules and guidelines into an expert system and publish it to their customers. This service could be sold per click, per positive outcome, or per user, all of which are very different to the traditional model of billing per hour. The CAIO would need to model different business scenarios based on the new pricing or billing options, and show that adopting the new model would create incremental revenue and not just cannibalise existing revenue streams. He might of course also point out that if the organisation does not adopt the new model, existing competitors or startups might do so instead.
The CAIO’s team will need to include a range of different skill sets, and will probably involve an eclectic mix of personalities. Revenue-focused commercial people will have to work closely with more academic AI experts and pragmatic process improvement experts. The office party should be interesting – perhaps they will play the Spice Girls.
Rainbird is an award winning cognitive reasoning platform. It enables businesses to rapidly automate decision-making tasks and build tools that augment human workers in more complex operations.