Innolytics AG

AI and KI-R-A will change the economy and the world

Artificial intelligence will be the strongest driver of change in our society in the future. Digitalization and innovation expert and author of the book “Die KI-Roadmap: Künstliche Intelligenz im Unternehmen erfolgreich einsetzen” (“The AI roadmap: using artificial intelligence successfully in the company”) Dr. Jens-Uwe Meyer is convinced of this. Many small and medium-sized enterprises (SMEs) have not yet recognized this.

Mr. Meyer, is the topic of AI a fad triggered by ChatGPT or is there a change process behind it that companies cannot ignore?

ChatGPT showed many people and organizations in a very striking way what is already technologically possible in the field of AI today. Making the chatbot generally accessible gave them a “wow effect” in terms of artificial intelligence. However, this does not mean that they already understood all the implications of the topic.

 

“ChatGPT was just the “can opener”. What do you mean by that?

Let me compare it to the smartphone. When it came onto the market in 2006, many people also thought “Wow, what a smart tool”. But back then, no user had any idea how much the omnipresence of this tool would change the way we live, communicate with each other and stay informed.

 

Also because this portable, pocket-sized computer was what made the triumph of social media possible in the first place?

Yes. The situation is similar with artificial intelligence. Most people and organizations - including the active ChatGPT & Co users - still have no idea of the transformative power of artificial intelligence. In my view, it will be the biggest driver of change in our economy and society in the coming decades.

 

Alongside climate change?

You can have different opinions about that. Perhaps the two issues are fueling each other. But in any case, many companies that miss out on the AI megatrend will see the light go out in the future.

 

Which sectors will be most affected by this?

The question is rather: Which industry will not be affected by AI applications in the medium and long term? I can‘t think of any. In the short term, the pressure for change is particularly great in service companies such as management consultancies, law and tax firms and planning offices, as well as banks and insurance companies; and in all areas of the company where a large amount of data needs to be collected, evaluated and used effectively, such as marketing and controlling. But AI systems are also increasingly taking over previously human activities in production because they are simply more effective. For example, in quality control. But this is just the beginning.

 

“KI-R-A will be a very strong driver of change.” Why is that?

Because the combination of artificial intelligence with robotics and automation, or KI-R-A for short, will open up completely new opportunities for companies. Up to now, digitalization and automation have primarily been about making individual activ-ities and sub-processes more effective; with KI-R-A, however, entire business processes can be redesigned and in some cases even completely new business models can be developed.

 

Can you explain this in more detail?

Even today, digital technology and AI are already being used in many manufacturing companies to optimize existing automation and robotics solutions. It is therefore no longer utopian that in the near future, AI solutions in companies will not only develop their new products, but also control their production and manage delivery to customers, as well as monitor and effectively implement these solutions for customers.

 

So controlling and maintaining the machines and devices online, for example?

Yes. Thanks to KI-R-A, this is already a partial reality today. And this automation process will continue at an ever faster pace thanks to self-learning AI systems.

 

With what consequences?

Among other things, a radical increase in efficiency. Tasks that used to take weeks or months or were not even carried out for reasons of efficiency will be completed within minutes with the help of AI solutions - and without human assistance. This scares many people, because they are afraid: Then my job will be eliminated. This will be the case in some cases. However, automation is simply necessary, not only from a business perspective, but also from a social perspective.

 

Why is that?

Due to demographic change and a shortage of skilled workers, many tasks simply have to be automated so that they can still be performed to a high standard.

 

And remain affordable?

That too.

 

“Fast disruption” instead of change and transformation

Why do you use the term “fast disruption“ in your book in connection with AI or KI-R-A instead of change and transformation?

Because of the speed and radical nature of the changes often brought about by AI solutions. Take ChatGPT, for example. This chatbot is the fastest-spreading digital product of all time. Today, barely a year after the program was released, hundreds of millions of people around the world are already working with this type of generative artificial intelligence. They are developing websites, writing texts and analyzing and improving computer codes and are generally not only delighted with how quickly the chatbot solves these tasks, but also how easy it is to use. This simplicity ensures rapid dissemination.

 

Are company managers already aware of the profound changes their companies are facing as a result of the increased use of AI or KI-R-A?

I estimate that around 10% of them are, and they also see the urgent need for action. However, most of them have not yet recognized the extent of the change. And more than half of them still believe that the topic of artificial intelligence is not relevant for us.

 

Expanding expertise in the field of AI

And what about the competence to initiate, plan and manage the necessary transformation processes in your organization?

The 10% I just mentioned know that the transition to an AI-dominated economy is inevitable and that this will require new skills in some cases. So they are also investing time and money in further training and the development of AI strategies. However, there are serious deficits in companies that tend to take a wait-and-see approach to AI, which is often the case with SMEs in particular. They run the risk of being left behind.

 

What should decision-makers in SMEs in particular do to get themselves ready for the change?

If they haven‘t already done so, they should simply try out programs like ChatGPT or Google Bard and conduct experiments with them. My recommendation is: “Let them write a work instruction for you, for example, or create a strategy or business plan based on uploaded data.” When decision-makers do this, they are usually positively surprised by the results. This often causes a rethink and they start to think about the extent to which the use of AI could make work in certain areas of our company more effective or even revolutionize it.

 

Develop an AI vision and roadmap

What should decision-makers do to initiate the necessary transformation processes in their organization?

It is important to develop an AI roadmap. The first step is to identify the potential for automation with the help of AI. My company has developed an analysis tool for this purpose, of which there is also a free trial version. The next step is then to develop the potential into specific use cases, define goals and set up teams. A structured, goal-oriented approach is particularly important for SMEs because their resources are usually much more limited than those of large corporations.

 

How important is it to have a vision of where the company wants to develop and what goals it wants to achieve?

Extremely important; also to waste as little time as possible. Because while some companies are still considering whether they should even bother with AI, others are already using it to automate their processes.

 

How can this vision be developed?

First of all, the topic of AI should not be stylized as “rocket science”. Instead, it should be approached with a similarly sober view as investing in machines. It always starts with a business case, i.e. considering what benefits our company could derive from the use of AI: Where will processes become more efficient? Where will quality improve? Where can we build strategic competitive advantages? The answers to such questions form the basis for developing a vision. In consultations, I often advise entrepreneurs and managers: “Imagine that your company or business unit were fully automated. What would have to happen, what decisions would have to be made so that everything from A to Z - for example, from incoming orders to delivery - would be fully automated?” The result of this thought experiment is usually unrealistic, because so much automation is currently neither technologically possible nor would it be employee or customer-friendly. However, it does give an idea of the direction in which the company will develop. Based on this vision, smaller projects and development goals can then be defined.

 

Start with pilot projects and evaluate them

What are the biggest stumbling blocks in realizing the version and achieving the associated goals?

The biggest stumbling block is the corporate culture. For medium-sized companies in particular, becoming active or embarking on the journey does not usually mean initially hiring a few AI experts or even setting up an AI department. Sometimes, one or two training courses and a few process/structural changes are enough and the first AI applications can be used in day-to-day operations. The first pilots can also be launched to build up expertise. However, this also needs to be planned and evaluated before the next steps can be taken.

 

Will there also be losers in the transformation process triggered by AI or KI-R-A?

Of course, just as was the case with previous digitalization and automation. The difference, how-ever, is that the winners and losers will become visible more quickly and the consequences of failures will be more lasting than before.

 

Why is that?

In the past, companies that were not among the “early birds” in the field of digitization, i.e. were rather latecomers, were usually still able to compensate for their shortcomings. That has changed. Just look at how much has already changed in the use of AI since the first press releases about ChatGPT appeared in December 2022. That shows: The pace of change and transformation has increased rapidly. It will therefore also become clear more quickly which companies will be among the winners and losers of the increased use of AI in business and society.

www.innolytics.de

Dr Jens-Uwe Meyer is CEO of Innolytics AG, Leipzig, which develops idea, knowledge and quality management software (https://www.innolytics.de). In addition to his doctoral thesis, the digitalization and innovation expert and speaker (https://jens-uwe-meyer.de ) has written 13 books on the topic of innovation in companies. His latest book, “Die KI-Roadmap: Künstliche Intelligenz im Unternehmen erfolgreich einsetzen”, was published in October 2023.
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