Over the past year I’ve spoken formally and informally with hundreds of companies about their AI initiatives. The biggest AH-HA moment comes when these companies realize the difference between implementing traditional technology and applying analytics with adopting AI. AI is a change from within.

New rules for AI are emerging that seem counter intuitive to those who are deeply rooted in today’s analytics and rule based decisioning. AI learns by observing and understanding patterns, and optimizes based on continuous input and training. Instruction is not a set of rules, formulas and code. Thus, it causes organizations to look more deeply at how they operate, what they want to achieve, and the resources available (in the form of information) to achieve their business objectives.

Know the new rules:

  • AI technology goes beyond digital, data, and analytics
  • AI affects your operating model
  • A different mix of market forces nurtures AI development

Most importantly, AI is not for the faint at heart. AI, even in packaged commercial offerings today, is time consuming and costly. The opportunity cost is high. Thus, applying AI for incremental efficiency and effectiveness is not a good use of investment and really a race to the bottom.

These typical technology ROI/TCO initiatives can be done today with traditional predictive and prescriptive analytics. Instead, consider where your business and industry is being disrupted, where there is potential to disrupt the industry, how your operations can be transformed, and what your company can do to diversify and extend the business to new opportunities and markets.

It is through business reinvention and imagination that AI will prove its worth. Anything less is status quo and disruptable.

Read up on the new rules: AI Ushers In the Age of Business Reinvention

(This post originally appeared on the Forrester Research blog, which can be viewed here).

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