Introduction
Artificial intelligence is a group of technologies that enable computers to perform advanced tasks such as machine learning, data analytics, and natural language processing, allowing these systems to mimic human intelligence.
In Business, AI provides organizations with advanced analytical capabilities allowing them to extract valuable insights from vast amounts of data. It can also perform extra duties such as forecasting and trend analysis while saving a lot of time, money and effort. Businesses have already begun to use AI to streamline operations, accelerate turnaround times and boost productivity.
Currently, technology is evolving at an unprecedented rate, and in the near future AI will be the standard and businesses who have already implemented AI softwares will gain a competitive advantage when this breakthrough occurs. However as businesses continue to integrate AI into their decision making processes it is crucial to address certain challenges.
Data Privacy and Security concerns arise due to the reliance on large amounts of sensitive information. Apart from this, Ethical considerations such as the responsible and transparent use of AI must be carefully managed as well in order to ensure that the decisions taken align with societal values.
Additionally, the effect on the labor force must also be taken into account, since AI systems automate some jobs, which may require reskilling or upskilling programmes and maybe change the current employment roles.
Abstract
Artificial Intelligence has emerged as a fast-growing force, having made a great impact on the working of many industries, an instance being business. Even today, it is being adopted by many industries as a means of increasing efficiency, improving customer experience, and also a means of gaining a competitive advantage over other competitors.This paper will address the advantages of using AI, such as the analysis of vast amounts of data in order to take better decisions and will also look at some of the disadvantages of its implementation including ethical concerns that my arise. Furthermore it will also look at its use in the future that could have an impact on a business.
Literature Review
For research purposes, this white paper is presenting numerous literatures that covers a variety of information on how AI has or has not helped facilitate better decision making.
Studies have shown that Artificial Intelligence (AI) is a valuable tool for organizations, helping in streamlining operations and increasing the productivity of their main operations and has also greatly improved e-commerce and information analysis processes, among other elements of corporate operations.It is also a helpful tool for risk assessment and for identifying fraud processes in financial operations.
Researchers have also highlighted how AI technologies, like machine learning and natural language processing, help organizations automate repetitive tasks and streamline decision-making. By leveraging AI algorithms, businesses can quickly process large amounts of data, reducing analysis time and enabling real-time decision-making. This enables organizations to discover new ideas, locate untapped business opportunities and create innovative strategies.
A few examples of real word firms that utilize AI are:
Amazon: They use it for inventory management and recommendation systems, which help businesses avoid overstocking or understocking, optimise warehouse space, and cut expenses. For recommendation systems, the algorithm analyzes the customer's browsing and purchasing history, allowing it to generate personalised product recommendations. Other then that, AI analyzes numerous elements such as prior sales or seasonal trends to forecast which products will be in demand and when. However data privacy and security are critical concerns as the use of AI involves the processing of sensitive information, as well as ethical considerations that arise, such as transparency and accountability.
Samsung’s Galaxy S24 Ultra: The phone that was launched on 17th January, 2024 comes with AI built in, in the form of a transcript assistant with a “circle to search” feature and real-time translation capabilities.
Other than this, recently a study was conducted by the International Monetary Fund and found that almost 40% of global employment is exposed to AI, including high-skilled jobs. The study states that 60% of jobs in advanced economies may be impacted by AI, with half of those benefiting from increased productivity and half being affected in a way that could lower labor demand, leading to lower wages, reduced hiring, and in extreme cases, job disappearances. In contrast, expected AI exposure was lower in emerging markets (40%) and low-income countries (26%), suggesting fewer immediate workforce disruptions but worsening inequality over time as the technology is adopted more widely.
Role of Artificial Intelligence in Business
The role of AI in our lives is always growing and it is steadily changing industries one by one. It can be used for a variety of purposes ranging from the identification of data trends to reduce market risks to improving customer service via AI assistants.
It is also incredibly beneficial in a variety of departments in a business, including finance, human resource management and marketing. Aside from this, AI's consistent and rule-based programming can also help businesses in minimizing errors which allows a businesses to expand its future prospects.
In managing a business, decision making is a crucial aspect of it. Under some circumstances, business decisions can only be made after a thorough review of relevant facts or existing trends (for example, financial decisions). However in case of a AI automated decision, it allows companies to make faster, more accurate and consistent judgements for a business. Thus, it can be said that humans and AI are very close to each other. One makes decisions using historical facts whereas the other uses experiences. In case of AI, data is a value because without it, AI will not be able to take decisions.
It allows for more focused decision-making while also saving time and money and can also conduct data collection, forecasting and trend analysis as well.
Methodology
With more data as input, AI gets better. Every day, businesses generate more data so they can utilise it to gather insights, learn from it and adjust as needed to achieve their goals. It may also benefit significantly from AI data collecting which uses past data to predict future outcomes. In the commercial sector (Eg: Banks, Real Estate) AI and decision-making are becoming increasingly more important as the solutions generated by AI may potentially give companies a competitive edge over others. However a business can only profit from integrating AI technology if they have a clear Electronic Internet Business plan that includes all their goals, efficiency and legal framework.
Results
Artificial intelligence has fundamentally transformed the present business paradigm. While AI can help businesses increase their efficiency and efficacy, it comes at a high expense in terms of the infrastructure required to run such a system smoothly. Besides this, each organization must undergo digital transformation that affects how some organizational departments work in order to use AI (Eg: Retail Companies, Human Resource Management, etc.)
(AI Use in 2018 and 2019)
AI Usage | Percentage |
Doesn’t use AI but is currently looking into it | 7% |
Have tested few concepts but with limited success. | 14% |
Have promising proof for concepts and are looking to scale | 21% |
Have processes that are fully enabled by AI | 25% |
Have started implementing with limited AI use | 33% |
(AI Use in 2024)
Impact of AI on Business
The following chart demonstrates how and to what extent AI may assist or enhance decision making, when formulating a business plan. It also emphasizes the potential for effective collaboration between management and machines which can take a business to a heightened level.
Currently, Customer Relations are one of the most important capabilities that an AI model can have. It can be used in sales and marketing to collect data about customers and subsequently improve the products and services offered by the company. It can also help in improving customer satisfaction.
If implemented successfully, AI has the potential to revolutionize how an organization operates and strategises.
Laws that can be passed by The Government of India on the usage of AI in Business Decisions
As of now there are no laws passed by the Indian Government on the usage or regulation of AI. Some of the things that could be undertaken by the Government are:
AI Ethics Code for Businesses: Creating a code of ethics that should be mandatory for all businesses to follow and must also guarantee that the systems created and used in a manner that is fair and non-discriminatory.
Impact Assessment of AI: Require businesses to do regular assessments of their AI systems in order to determine ethical implications or possible risks.
Data Privacy Regulations: A pre-existing law in India related to this is the India Digital Personal Data Protection Act, 2023 (DPDPA). The Act aims to protect personal data and is also applied to data that was not processed in India, however belongs to an Indian Citizen. Currently there are 33 sections in this act. 2 new sections should be added that would cover the regulations that govern how businesses collect, store and use personal data in AI applications and the other section could cover the mandate appointment of Data Protection Officers in a business to oversee compliance with data privacy laws.
Disclosure Requirements: Require businesses to clearly disclose when AI is being used in decision-making processes, especially in customer-facing services.
Set Safety Standards: Establish industry-specific safety standards for AI applications in order to ensure that they do not pose undue risks to users or the public (emphasis on Healthcare and Finance).
Liability Laws: Clarify liability issues surrounding AI decisions and acts, ensuring that corporations are held liable for the results of their AI systems.
Beyond this, from an economical standpoint view, this is a highly effective way of generating employment and stimulating the economy.
Conclusion
Artificial Intelligence is a transformative force in a businesses decision making processes and is without a doubt the future. By efficiently utilizing AI systems a business can make better decisions by using the systems ability to analyze vast amounts of data and generate predictions and suggestions based on it. Businesses have already started using Artificial Intelligence as a way of improving their policies and decisions taken. However, in order for it to be truly successful, a country must adapt to it and make regulations on the use of AI in order to safeguard the public.
Bibliography
378920444_INFLUENCE_OF_ARTIFICIAL_INTELLIGENCE_ON_BUSINESS_DECISION-MAKING
The-evolution-of-ai-its-growing-influence-in-business-operations.php
Paper_103-Role_of_Artificial_Intelligence_and_Business_Decision_Making.pdf
https://indatalabs.com/blog/artificial-intelligence-decision-making#:~:text=AI%20automated%20decision%20making%20allows,work%20relevant%20to%20their%20field.
India-digital-personal-data-protection-act-2023-guide-protected-data