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An AI Audit and Why your Business Needs One Image

An AI Audit and Why Your Business Needs One

Next month will be exactly a year since Chat GPT, Open AI’s Large Language Model was introduced. Now the consensus may vary, experts who have been around in the space may agree that while significant it may not be as groundbreaking as Google’s AlphaGo which was introduced a few years ago. Nonetheless, this new technology has transformed our personal lives immensely. How? Well at the current stage, the Large Language Models that have been introduced have transformed information processing, essentially supercharging the way we enter and process everything. This means the way we have been working before has changed and will continue to change as this technology continues to unlock bigger and more complex solutions. What’s more fascinating is how quickly this technology is evolving.

A few years ago, Moore’s Law observed that the number of transistors on a chip would double every two years, and it remained accurate for a pretty long time by the evidence of new mobile phones, computers, and other devices every 18 to 24 months. Now according to some computer scientists, Generative AI systems have achieved more than 100% annual improvement in operations per second. It doesn’t sound like a lot but I asked GPT- 4 for some help to do the math. This means that these systems are increasing their performance by about 3% every month, 0.7% every week, 0.10% every day, and 0.0042% every hour. Compared to Moore’s law which estimates that systems are increasing their performance by about 5% every month, 1% every week, 0.16% every day, and 0.0066% every hour. That’s faster than the human mind can even comprehend!

So what does this all mean? AI is poised to revolutionize pretty much everything and everyone, including industries and small and medium-sized businesses both of which are not immune to its disruption. Just as each of us challenges ourselves to find a place in this new technological cycle, businesses need a plan of action to assess its viability and identify opportunities for AI integration. That’s where an AI audit comes in. Today we will explore what an AI audit entails, why small businesses need one, the benefits of AI automation, how to conduct an AI audit, and how to easily gain buy-in for AI automation.

We’ve Done This Before but Differently

Throughout history, humanity has always sought to enhance productivity, finding the 20% of effort that provides 80% of results. The horse-driven cart, the steam engine, the light bulb, the motorcar, the computer, and an endless list of innovations were all born from some sort of human ingenuity. Many capable minds looked at what we were doing, found some sort of gap, and realized opportunities that emerging technology would unlock if combined with current processes. In Artificial Intelligence, we could call that an AI audit, a comprehensive assessment of AI systems to identify what impact it might have. At the current stage of things, the biggest impact is around automation. It involves identifying tasks and processes within a business that are often manual, time-consuming, and repetitive, conceptualizing how the automation of these processes would be conducted, testing an automation workflow with AI, and then finally integrating that process internally in the company.

A Necessity for Growth

Just as the Internet became more accessible, affordable, and applicable for various domains and functions so will AI, but at a much faster rate as highlighted above. Because small businesses are typically known to contribute a significant portion of Global GDP, technological adoption will unlock significant economic and social benefits. McKinsey’s recent report showed that AI could potentially increase global GDP by 1.2% annually until 2030, with the largest gains coming from productivity improvements, and as global economic pressures linger on the horizon, the urgency to adopt it is high. Another survey by Forbes Advisor showed that 40% of business owners are concerned about the costs of implementation, while 36% are concerned about the lack of technical expertise. If done correctly, the function of an AI Audit is to help small businesses:

Source: Forbes Advisor

  • Identify and supercharge related tasks specific to their operations.
  • Ensure that the technology aligns with their business goals and values.
  • Improve and possibly expand the performance and reliability of existing business functions.
  • Enhance contextualization by building greater trust with customers and stakeholders through responsible AI use.

A Value Enabler for Small Businesses

Any business that has a product–market fit will face the continuous challenge of remaining competitive, increasing margins and customer loyalty, and most importantly, cutting down costs since technological adoption has historically been the answer to these challenges  AI automation can bring numerous benefits to small businesses. Let’s highlight each benefit with some practical examples:

  1. Increased efficiency and productivity: AI can automate routine tasks, freeing up employees to focus on more critical value-added activities. A small bakery can use this by automating its inventory management and ordering system, which tracks the demand and supply of various ingredients and products, automatically placing orders with suppliers when needed allowing the bakery owner and the staff to focus on improving the quality and variety of their products, and serving their customers better.
  2. Improved decision-making: AI can analyze vast amounts of data and provide valuable insights, enabling better-informed decisions. A small consulting firm may automate its data analysis and presentation process by collecting and processing data from various sources such as the web, social media, surveys, and reports. Using Natural Language Processing, The firm’s system can now create visualizations and reports based on the data allowing consultants to focus on providing solutions to their clients and communicating their findings effectively.
  3. Enhanced customer service: AI-powered chatbots and virtual assistants can provide personalized and quick customer support around the clock, which is critical for improving customer satisfaction. A travel agency may use AI automation to handle customer service and marketing processes. Through a chatbot or virtual assistant trained to respond like an actual staff member, the system can answer queries, provide suggestions, and book trips. Additionally, it could analyze customer data and feedback, and personalize the offers and promotions based on their preferences and behavior.
  4. New product and service development opportunities: AI can help businesses identify emerging trends, create innovative offerings, and stay ahead of the competition. A fashion house could benefit from this by automating its design and development process. The AI system can generate new designs based on current trends, customer feedback, or user inputs, going a step further as to test and validate the designs using computer vision and deep learning, ensuring quality and appeal. This allows the fashion designer to focus on expressing his/her creativity to their clients and communicating their findings effectively.

Getting Started

Small businesses have several options for conducting an AI audit. Beginning with a self-assessment checklist or seeking the expertise of external consultants or auditors. Here’s a general overview of the AI audit process:

  1. Map out and outline how your business serves customers, and narrow down any bottlenecks in the process.
  2. Evaluate these processes to see if they would benefit from automation. You want to look for specific areas where repetitive tasks are prevalent and can be streamlined.
  3. Identify AI Systems that could provide a solution to the task at hand. Based on the task at hand will they be resource heavy? and need a development team to develop or a simple solution that takes a smaller team and several days of effort?
  4. Assess the risks associated with the adoption of each AI system, considering potential impacts on the business, customers, and stakeholders.
  5. Develop and implement mitigation strategies, which may involve adjusting AI system usage, implementing additional controls, or discontinuing certain AI systems if there is no value being created.

Getting the Buy-In and Consideration

The role of a management team cannot be overlooked and the ability to gain buy-in for AI automation from stakeholders is crucial. If you work for or manage your own business finding the right language and terminology to solicit buy-in is difficult because of the complexity behind the technology, even the most seasoned of Data Scientists. So communicating that will be an ongoing challenge. We suggest you begin by addressing the need. Where are we as a business and what challenge is limiting us from capturing more growth and what would be the solution? Let’s Illustrate with a simple conversation; “Hey I noticed that a lot of our customer inquiries are going unanswered. The two of us are capable but at times, it gets overwhelming while still juggling product and order fulfillment., I think there is a way we can fix that and even possibly deal with converting those inquiries into actual closers.”

If you start small, you gain the knowledge and uncover more avenues for value creation. Click To Tweet

Emphasizing the benefit of the new technology communicates the value far better and eliminates the confusion behind how it works. Leave that to the technology experts and educational resources should you choose to work with a service provider or learn about it on your own. The main highlight should be the improvement of efficiency, productivity, customer service, cost reduction, and innovation. This way you are simplifying the ask, reassuring stakeholders that you have a plan, and opening the door for exploration to better inform your leadership on this technological benefit. By automating a few key tasks initially, businesses can gain valuable experience and confidence to drive broader automation initiatives across the broader spectrum paving the way for a more efficient, innovative, and successful future.

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