Using AI to extract Business Value and how Accountants can help?
Learn how AI will impact your business and what are the possible ways in which your accountants can help you prepare for these changes
The term Artificial intelligence makes one immediately think about science fiction and dystopian regimes. AI has embedded itself in our everyday lives with an astounding pace, the world is gradually embracing AI and the notion that too much technological advancement is disastrous for humanity is slowly fading away.
Turning Artificial intelligence into a technological reality has taken decades of painstaking efforts and consistent sacrifice of time and resources on research and development, but has the progress and technological advancement brought any value to the world?
Let’s take businesses, for instance, AI offers innovation and a multitude of use cases in the business world. Many people believe that we have a long way to go before we can see any visible value added by AI, however, this might not be the case. We interact with AI on a daily basis without even knowing it, in one form or another.
What do you need to know about AI?
Before stating how AI is impacting the business world, it is imperative to understand more about what AI actually is? Any computer software that has the capability to engage in and perform human-like activities, can be referred to as Artificial intelligence. Human-like activities include planning, learning, and problem-solving capabilities. AI works on three basic principles, detect, interpret and implement.
AI technologies have the capability to detect or sense physical objects using things like facial recognition technology, which can be used to track movement on borders by recognizing facial features or characteristics, this used with other technologies such as multispectral image analysis or matching algorithms, and the possibilities are endless, for things like automated security or major safety threat predictions.
AI also has the ability to fathom or comprehend other technologies such as natural language processing and expert systems. Such technologies have a vast scope of usage across a number of industries, for instance, medical diagnostic systems that assist doctors in identifying diseases and recommend suitable treatments accordingly.
AI takes action within a process through different technologies and acts independently. It also has the capability to direct action in a physical process, for instance, driverless technology in cars, AI senses the environment, understands the actions it can take and finally steers the car without taking any human suggestion or direction into consideration.
What are the four types of AI?
AI refers to a very broad and general term, and many complications may arise whilst classifying different kinds of AI algorithms. However, this article intends to discuss 4 main types of Artificial Intelligence.
1. Reactive machines:
Reactive machines are very simple to understand, as the name suggests, they simply perceive the surroundings and react accordingly, without considering any prior experience before reacting, as they do not store any memory.
For instance, Deep Blue of IBM successfully defeated a chess maestro after observing pawns placed on the chessboard and making moves accordingly.
2. Limited memory:
These are machines that can retain memory for a limited (short) period of time but are unable to record such experiences down their memory library for a longer period.
For instance, driverless cars make use of such machines by storing data such as the distance of nearby cars, their speed, the speed limit and other variables that may help them successfully navigate and avoid any collision, but only for a short period.
3. Theory of mind:
Theory of mind is still under research, computers use a mind like models, but do not actually have a mind. The researchers of this theory want to build a system of computers that imitates our brain function and can take decisions in exactly the same manner based on certain psychological factors such as emotions and memories.
The end goal of AI researchers is to develop machines that are capable of operating as normal humans do.
For instance, developing machines that are capable of recognizing their needs and demands, preserving itself, fulfilling social responsibilities, etc. To sum it up, making machines become conscious or self-aware.
Whether humans will be able to achieve this to get to levels of intelligence that surpasses that of an average human being, is still under debate.
How is AI transforming the face of the business world?
Artificial intelligence has rapidly made a difference in the business and technology world. Business owners have countless opportunities available to them from the use of the AI developments happening right now. AI has the capacity to transform the face of the business world by providing assistance in almost every aspect of business that includes mobility, customer services, logistics, marketing, product development, and research. This article tends to discuss 4 ways AI is making its impact on the business world
1. Improved Recruitment and Employee Management:
AI has now made the tedious task of recruitment far simpler, it can easily sift through thousands of resumes, automatically reject unsuitable candidates based on the job criteria and book meetings with acceptable candidates by utilising the managers’ calendar. It doesn’t stop there, AI is also able to analyse the attendance of employees analyse their absence pattern and predict the dependability of good and bad employees, which can be used for their performance reviews.
2. Lower costs, optimal results:
AI has been successful in increasing the efficiency, precision, and rate at which tasks are performed. AI’s primary role is to increase the amount of automation within a business, in the past decades, employees were hired to do simple data entry tasks, AI has the capability to generate, record and electronically enter data for either the receiving side of the business or the sending side of the business. In addition, AI does not require food, water or simple coffee breaks to resume its task, it will automatically collect data, retrieve information, analyze it, even when you are not around.
3. Advance customer service and support:
AI has already transformed the way businesses communicate with customers. By utilising all previous communications with various customers, AI is able to handle a vast majority of communication with customers through automated measures using various channels such as chat, text, emails, social media, etc. This has decreased the need for employees to spend time on answering queries which have been answered before, the automated AI responses are also far quicker, more efficient and accurate compared to a human customer service representative.
4. Increased Cybersecurity:
Innovations and advancements in technology have created an increased risk of vulnerability to virus threats, but thanks to AI, global cybersecurity has advanced to the next level.
Businesses are also increasing the security of their company’s data and information by combining AI with cloud technology. The leaking of private and sensitive data can cost companies and their customers millions, as a result, businesses are now taking drastic protection measures by utilizing AI to spot any loopholes in their security and to learn from previous errors or mistakes.
Is AI affecting the ways companies typically organize themselves?
Rapid advancement in technology has forced a number of business leaders around the world to reconsider their company’s core structures. These considerations involve the restructuring of entire organizational structures, the introduction of new training models and developing new HR practices and policies.
The notion that AI will replace human jobs at a certain point in time, is also fading away. What AI does is to eliminate different tasks of non-value adding jobs, and has the capability of creating new jobs which require human input, as some tasks will always demand human intelligence, unless AI surpasses human intelligence completely.
How businesses can extract value by using AI?
Businesses around the world should be looking to introduce and embed smart technologies (such as machine learning, natural language) into their processes and workflows.
If a business is able to successfully deploy the right AI technology in their business operations and processes, then it
- Has the potential to increase business productivity
- Has the potential to increase operational efficiencies
- Will be able to save a considerable amount of time and money by automation of recurring and routine tasks
- Can indulge in quick and effective decision making. Decision making that stems from insights provided by smart technologies
- Will decrease the number of errors
- Can successfully increase profits by utilizing and maximizing sales opportunities
- Can broaden customer base help track quality leads by generating and analyzing tons of data in a matter of seconds
- Can provide a perfect customer experience, which also means, everything fits according to the customers’ choices and preferences
- Can offer analytical and intelligent advisory services, and hence increase expertise and business knowledge
How can Accountants prepare you and your business for the digital revolution?
As the AI age approaches, businesses can speak to accountants to identify processes that are cost-intensive or require operational efficiency for which AI technologies can be identified, in return increasing profits. An accountant can prepare you and your business for the digital revolution in multiple ways:
1. Assess Cost vs Benefit
Your accountant can help you identify the benefits in using AI to replace process which cost more if done manually, then if they were to be automated, or if the cost of using the AI tool is less than the benefit it will add to the business. Speak to your Business Accountant in detail to see if they understand your business model before asking them to perform a cost vs benefit analysis.
2. Benchmarks and data comparisons to competing with competitors
AI can be used to analyse large amounts of data to extract value, perform comparisons and to provide the results in an understandable bite-sized format. If your accounting firm or online accountants are also your business advisers, ask them to help you compare and visualise data and use it to get ahead of your competitors.
3. Help Budget and Plan
Ask your Chartered Accountants to help you plan and budget for major technological changes and AI implementation. An effective budget and constant monitoring is a good start.
4. High-Level Tax Planning
With high-level data storage and smart AI-based accounting software available, your tax accountants should be helping you plan effectively for reducing tax and increasing cash flow. Speak to your personal tax accountants to see if they are adding tax efficiencies to your business.
Clear House Accountants are specialist Accountants in London, we specialise in working with technology businesses helping them add value in ways and means which requires us to understand and adopt the technology. Speak to us to learn how we can add value.
Thao is a Senior Accounting Manager at Clear House Accountants. Her experience in the industry has led her to her current position in which she is responsible for a team of accountants, tax planners and bookkeepers.
Thao works with her team to help clients from a variety of industries, grow, save money and plan for the future. Thao holds a Bachelor and Masters degree in Accounting and Finance and is currently working towards her ACCA, she is also a Xero and Quickbooks Certified Advisor.
Thao’s expertise lies in high-level tax planning, management accounting and strategic business planning based on financial performance and business analytics. Her experience, expertise and knowledge make her an exceptional contributor at Clear House.