When I met A : Successful business leaders leverage RI (Real Intelligence) till they get AI (Artificial Intelligence) framework right
One of the themes that every leader is using these days is AI. With businesses getting transformed as technology helps create new business models, it is only obvious that the latest technologies are trending. However, any technology needs to pass the test of success measure metrics like ROTI (Return on Time Invested). ROTI can be simple Revenue per employee before and after use of technology. Interestingly it seems for AI this metric may be not be in green zone.
But why so? To understand this one needs to understand the typical technology adoption stages. There are four stages to technology adoption and I call it IPLM technology maturity stages. I stand for Idea & Experimentation stage where the new technology breeds and has high costs associated with it due to high investments. As they start getting eyeballs, the technologies start getting piloted and experimented on possible use cases and this what is P stage implying Preliminary Tests. As pilots and preliminary tests results become positive and successful, one sees the Large-Scale Applications (L) taking prominence and finally the Maturity stage (M) kicks in where this technology becomes a bedrock for further new applications or technologies.
What is important here is to understand that as technologies go through these changes some of these things happen:
- Some technologies fail to make to the next stage
- Technology cost drops as technology graduates to next stage
- In L&M stages eco-system builds faster gaining from network effect
- Innovation using technology multi folds in L&M stages
All these have implications for the business leaders as the technology needs to support the business P&L , and if it cannot then it may not be a sustainable proposition.
Take an example of Financial Services business and more particularly a lending business. There could be multiple use cases of AI covering aspects like Marketing, Sales, Operations, Customer Service and host of other functions. However, the question to be asked is what is the amount of investment the business can do on AI and what is a ROTI. If the ROTI is not material enough then AI may not be a sustainable and make the P&L bleed.
One may argue this is an investment for future but then any investment for future should give an idea about its possible ROTI. Always remember Financial Services firm into lending, is going to build business of lending which could be enhanced through technology or create a new business model that leverages technology by addressing a potential opportunity in the market. In either case technology alone is not the driver but an enabler.
For a non-technology organization to invest in technologies which are in I or P Stages is not possible. It’s a bet which if goes wrong makes businesses over cautious with risks of technology. They become once bitten twice shy kinds as they carry scars for them which are difficult to get rid of, leading to every subsequent technology investment even in L or M stage technologies which have least chances of failure getting treated like a I or P stage technology.
This is where RI or Real Intelligence needs to precede AI. There is a thin line between path breaking and P&L breaking investments. AI can be path breaking but if not right timed can play havoc with P&L. Hence, businesses need to ensure RI is leveraged first and they start using AI once the framework in place for AI. The framework here means the data, the models, the people and the mitigation of the risks associated with AI like error rates, data privacy and security, equity, fairness, compliance, and copyright protections etc.
