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Is artificial intelligence the engine of digital transformation?

It may sound funny at first, but artificial intelligence is the serving girl of digital transformation. The analogy is apt because AI solutions are very often referred to by female names. For example, Stratis has its in-house developed artificial intelligence solution, called A.N.I.T.A., which can process various text documents much faster than human capabilities. But in fact what role can A.N.I.T.A. and similar AIs play in digital transformation and why is their application inevitable for companies? In this article, we discuss the subject and take a detailed look at it from several angles.

A mesterséges intelligencia a digitális transzformáció motorja?

Adapting to change

Today, no large company can afford to ignore or carelessly dismiss digital transformation, as changes have occurred in recent years that are impossible to respond to without appropriate technological innovation.

It is not only rising energy prices that have made companies increasingly concentrate on where they can cut costs and increase efficiency. Digital transformation emerged early as a driver for large companies that maintain an extensive network of stores and customer service offices at very high operating costs. Examples include banks, insurance companies, and telecom firms.

However, customer needs are also changing. Customers no longer want to walk into shops, visit branch offices, or call customer services to arrange things. They want instant answers, mobile-enabled solutions, personalised offers, and a better customer experience instead.

The market is also constantly changing, and more and more competitors are coming up with innovative digital solutions. So to remain competitive, large companies need to transform their earlier business models, products, services, and the underlying technology. To tread the path of digital transformation is therefore inevitable if they are to adapt flexibly to the ever-changing market environment and needs.

The relationship between digital transformation and AI

Digital transformation refers to the use of IT systems where the data collected drives the various corporate business processes. This large amount of often unstructured, i.e., visual or textual data can be processed using artificial intelligence. However, data must be collected in a targeted way and processed in a manner that enables communication not only between IT systems but also between systems and people. By doing so, AI can provide feedback and development recommendations in a form that people can readily understand, thereby supporting business decision-making. All this communication is overall driven by data and the information derived from it.

What sets AI apart from automation?

It is worth distinguishing between AI solutions and automation. While both involve collecting data, automation entails formulating rules. We have to consider every eventuality and write a program for it. In contrast, AI is much more efficient when brought to bear. It boasts of a much better generalisation ability, it can recognise patterns, draw conclusions from large amounts of data and make recommendations. Bottom line: It is much faster, more accurate and scalable, we can smarten it further with training data alone.

Areas of digital transformation within a large company

One particular area that most companies emphasise is customer service. Providing customers with the right quality of service is an expensive process; just think of running a customer service desk in person or by phone. Besides, customer demand is also shifting towards simpler, faster, and preferably online services. By applying artificial intelligence through online customer service channels, many administrative cases can be handled more efficiently, or even automated, without compromising customer experience. For example, A.N.I.T.A. can recognise customer intent and then route the request to the appropriate resolution team.

Beyond customer service, sales and marketing are obvious key areas for digital transformation. This is no mere coincidence, as we now tend to be reluctant to visit physical stores and prefer to shop online via webshops. It is also much more convenient to subscribe to or cancel a service on a mobile phone. This is why companies need to create digital platforms that allow them to deliver services to their customers. The perfect tool to appropriately implement such a platform is AI, which can identify customer needs, habits and spheres of interest to then offer them personalised proposals and discounts.

How can the success of digital transformation be measured?

Each area or project requires a different specific metric. For example, in the case of product development, the revenue from the product is our objective, but, after the launch, it is reasonably more important to look at usage numbers and habits. For a customer service department, for example, the shift of queries from face-to-face encounters to online channels could be a key metric.

What is the correct approach to a digital transformation project?

You cannot make big leaps in digital transformation. First, identify the areas you want to transform, and then take small steps!

Since we are ultimately talking about IT projects, system development will be necessary, but it is also important to transform the organisation and internal operating processes.

Just to mention one example, there will surely be a need for new PM methodologies like agile project management, or the monitoring and teaching of AI-based processes. A comprehensive transformation will make it much easier to navigate through the uncertainty caused by changing customer needs, the market environment and technological diversity. 

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