There is a lot of excitement and discussion surrounding artificial intelligence these days … and for good reason. Business leaders and innovators are working to capture the promise of AI to deliver a competitive advantage as well as cost and time savings. The technology is altering industries from finance to manufacturing with new products, processes and capabilities. And while Hollywood often portrays AI in a future world with smart robots with superhuman characteristics, the truth is that these technologies are already at work fueling important changes in the way business is conducted every day.
Artificial intelligence provides the potential to re-engineer and improve core business processes that drive the success of any enterprise organization. In many cases, those improved processes will operate in a completely different way; fully automated and autonomous, freeing up time previously taken by humans to perform redundant and repetitive activities.
The future, today
The implications of AI are already being experienced across all industry segments. To begin with, AI is being used to drive productivity and efficiency across universal back-office operations that all organizations must manage. Common activities like order processing, invoicing and shipping are all prime targets for process improvement using AI. Leading companies in manufacturing, utilities, insurance, and more, are all upping investments in AI with the aim of creating an intelligent enterprise that is more agile and innovative, and receptive to process improvements that translate directly to the bottom line.
AI-enhanced tools provide the solutions and capabilities that organizations need today. According to research from AIIM International, two-thirds of organizations say that their core back-end processes are less than 50% automated. And organizations that perform below average report that their back-end processes are at least 75% manual – a deep challenge as digital disruption accelerates. The improvement opportunities lie in the growing disconnect in organizations between their desire for process automation and the information that is needed to drive those processes. As a result, companies are actively searching for new approaches using AI that make a real difference to organizational performance and profitability.
The bottom line on bots
Applying AI in the real world requires a number of important tools, foremost being automated software known as “bots.” Bots are bits of automated software that run without the need for a human. Typically, bots perform tasks that are both simple and structurally repetitive at a much faster rate than would be possible for a human alone. Bots present a huge step forward in an organization’s ability to digitally transform and fundamentally influence organizational performance with higher levels of process efficiency, agility and service.
For most enterprise organizations, a combination of attended and unattended bots provides for the most optimal approach to intelligent automation using AI.
What kind of “bot” do you need?
Attended bots work alongside humans and are useful when the entire end-to-end process can’t be automated. Triggered by a human user as needed, this bot/human approach works to optimize tasks by offloading portions for automation at the time of need, helping work get done faster. This is especially useful for front-office activities such as marketing, sales, service and support. A call center agent can get help from an attended bot in real time during a live customer call, for example.
Unattended bots execute tasks and interact with applications independent of human involvement. They can be triggered by events or perform autonomously according to a predetermined schedule. Back-office activities such as inventory management, supply-chain or logistics benefit most from unattended bots which typically perform batch operations that do not require user intervention.
Using AI in the real world
The key to gaining advantage from AI is turning innovation into real-world process improvement. It’s not about the technology, it is about boosting the performance of the organization. How are organizations putting that desire into practice? Here are three examples of how AI is applied to processes that nearly all organizations must manage.
Accounts payable is a fundamental activity. Pick any enterprise and you can bet there is an AP function at the heart of financial operations. But for most, invoice processing is a people-intensive process requiring multiple steps and multiple staff members to administer the process. The result is an often costly and time-consuming activity that leaves companies victim to the inherent inefficiencies.
Artificial intelligence is applied to automate and streamline invoice processing, thereby relieving humans of having to perform the repetitive, mundane and manual tasks that plague the process. A research study from Medius found that organizations that adopt AI in AP automation save an average of one hour per day in invoice processing.
Every commercial enterprise needs to land customers and process orders. But the more successful a company gets, the more difficult it can be to manage the process efficiently. Order processing involves multiple stakeholders and departments, such as customer service, sales, manufacturing, logistics, accounts receivable, and finance. A number of applications can also be involved, including enterprise resource planning and customer relationship management platforms, not to mention accounting software and business process management solutions. And do not forget approvals, along with exceptions for workflow. This all adds up to tremendous opportunity for process improvement.
Artificial intelligence works to eliminate the mundane, manual, and repetitive tasks that increase operations costs and slow the pace of business. It meets many of the objectives for organizations looking to use automation for process improvement. Smart systems are used to monitor a customer portal or corporate email inbox for new sales orders, automatically process the orders, and extract and validate the information in accordance with predefined business rules … all without human intervention.
Shipping is another key activity where AI can be applied for process improvement. The shipping and handling activities in many organizations continue to suffer from paper-based and manual workflow. Vendors prepare shipments with a bill of lading document, the carrier accepts the shipment and provides a freight bill, the vendor validates the bill and initiates a purchase order, the carrier delivers the shipment to the customer with a delivery receipt, and the customer validates the delivery receipt against the purchase order. All of this is highly manual and fraught with the potential for human error.
AI-enabled software works to streamline the process, eliminate error and speed the pace of business. Intelligent task bots automate the effort required to validate shipping and sales information, calculate shipping charges and import data into ERP systems. And unlike workers on break or vacation, processing is continuous and automatic. According to a study conducted by McKinsey, 44% of executives say that AI has reduced costs with this “digital workforce” approach.
What steps should you take to make the most of your efforts to use AI to improve process performance? Consider these five best practices.
Define a real-world process improvement opportunity where AI can help. The concept of artificial intelligence can seem futuristic, but the advantages are available today. Work to clearly identify which processes are good candidates for automation and why. Detail the gaps in performance that will be improved, and set forth recommendations for solutions and technologies that address the specific points of process improvement opportunity.
Work to automate gaps where automation has not been applied. Many organizations have adopted discrete pockets of process automation, but many key business activities continue to require manual intervention and data entry. This is typically because the right tools have not yet been applied. Start with these and then expand to cover larger, enterprise-wide projects.
Calculate a return on investment based upon gaps in process performance. By defining realistic opportunities for process improvement you make the task of calculating a return on investment in AI much easier. Work to establish a clear linkage between the technology, the process, and the advantages that your improvement efforts will bring about. With a grounding in core processes that drive the organization you will more likely enlist the C-suite support and funding you need.
Demonstrate the competitive edge. All the technology and systems in the world are for naught if they don’t improve the performance of the organization. It is important to understand and demonstrate how the effort to adopt AI gives the company an edge on the competition. According to the Medius study, more than 80% of executives today feel that AI can lead to a competitive advantage, so show them. Demonstrate, for example, how faster, more accurate AP operations improves vendor relations and ensures timely production. Show how improvements to order processing will increase cash flow and ultimately land more customers. Reveal how streamlining and automating shipping administration saves money, increases customer satisfaction, and sets the company apart from the competition.
Leverage the right technologies and best practices. Companies that are successful with artificial intelligence are the ones who are successful at taking the robot out of the human being. Best practices all center on liberating employees from mundane, repetitive tasks, allowing them more time to use their expertise, intellect and creativity to solve higher order business challenges. By automating core activities that make sense, and then reapplying their human capital in areas that provide greater value to the organization, companies leverage AI for process and organizational improvements that make a real difference in organizational performance.
Adopting AI for process improvement is not a one-and-done process. It is a constant and evolving approach to boost organizational performance. Solutions and techniques that leverage developments in artificial intelligence make that happen. You will be most successful starting with discrete applications that streamline and automate core activities, and then expanding on those capabilities.
Follow these best practices to maximize the value of your technology investments and bridge the gap between automation and innovation. Look for providers and resources with the right mix of expertise, perspective and capabilities that will help you make the most of using artificial intelligence for process improvement.