How CIOs are using AI solutions to improve customer experience

Enterprises are using Data & Analytics solutions to improve customer experience, and revenue predictions to improve their revenue and profitability.
AI ready employeesData & Analytics is all about leveraging data to enhance decision-making processes and drive innovation. Most of the data-driven innovation contributes to creating new products, services and enhanced business models for improved efficiency, sustainable growth, and better operational outcomes, Ramke Ramakrishnan, VP Analyst, Gartner, said in an interview.

Leading enterprises such as Netflix, McDonalds, Amazon, Starbucks, among others, use their customer profiles, viewing and shopping habits to identify trends to improve their customer experience, and revenue predictions to improve their overall revenue and profitability.

Starbucks, for instance, is making investment in Deep Brew AI and machine learning. Starbucks is generating 22 percent of global sales through digital channels. Starbucks said in its website that it has connected more than 38,000 locations thanks to digital transformation.

McDonald’s is investing in AI for the purpose of advancing its restaurant technology platform.

Netflix has developed Metaflow, an open source machine learning infrastructure framework, to empower data scientists and machine learning practitioners to build and manage a variety of ML systems.

“Connecting our restaurants worldwide to millions of datapoints across our digital ecosystem means tools get sharper, models get smarter, restaurants become easier to operate, and most importantly, the overall experience for our customers and crew gets even better,” Brian Rice, McDonald’s Chief Information Officer (CIO) said recently.

From a GenAI perspective, companies like Morgan Stanley and Bloomberg have developed their own AI assistant using GPT-4 or other LLMs to provide real-time financial analysis and enhanced research report accessibility to their customers.

Gartner says AI software spending will grow to $297.9 billion by 2027. Over the next five years, growth in AI software will accelerate from 17.8 percent to 20.4 percent in 2027, with a 19.1 percent CAGR. Government has the largest spend of over $70 million by 2027, but oil and gas is growing fastest with a 25.2 percent CAGR.

Tips for CIOs

There are several factors that go into the selection including the overall scope, evaluation criteria, cultural alignment, time to value, flexibility, cost, risk factor and so on. In general, CIOs need a consistent, structured, and repeatable methodology that focuses on success while actively managing risk and Gartner can help CIOs in those areas, Ramke Ramakrishnan said.

For Data and Analytics specifically, Gartner offers a multiple tool kit for their customers to assist with the vendor, service providers and technology partner selection.

Here are some details on spending trends in AI business.

By the end of the forecast period in 2027, the spending split between applications and platforms for AI software will be 40 percent-60 percent.

Generative AI software spending will reach 35 percent of AI software spending by the end of the forecast period in 2027.

How can CIOs ensure their people are AI-ready?

With Generative AI transforming the way how business is run today, CIOs need to ensure that they take a very measured approach to help prepare their organization and people to get them AI-ready. Some of the actions that they can consider taking in the next 6-12 months include:

Establishing lighthouse principles to guide their organization’s use of AI.

Ensure the organization’s data is AI-ready, meaning it is ethically governed, secure, free of bias, enriched and accurate.

Implement AI-ready security, including the creation of an acceptable use policy for public generative AI solutions.

How can CIOs convince the board to invest in AI?

CIOs need to have a clear vision of how to define the organization’s AI ambition and the role it can play, including how integral it is as part of their business strategy. CIOs should also be prepared to convince others of the level of risks associated and have a clear plan on how those risks can be mitigated.

How can CIOs ensure user empowerment at enterprises?

User empowerment can be accomplished by investing in developing AI literacy programs, deploying adaptive governance practices for effective governance, and implementing a trust-based approach to managing information assets, helping individuals understand the provenance of information used by them.

How AI-driven IT investment can bolster digital transformation?

AI can bolster digital transformation through augmentation and automation of tasks driving efficiencies and faster deployment cycles. The rise of Generative AI can greatly benefit areas such as chatbots, virtual assistants and content generation and summarization with enhanced search capabilities on large digital data sets.

As AI continues to revolutionize industries on a strategic level, organizations must demonstrate a bet-the-business skill set on AI and earn trust to lead the AI strategy within the enterprise.

Organizations need to embrace complexity by using AI-enabled tools to automate and improve productivity by investing in augmented data management, decision automation, and analytics capabilities like natural language processing (NLP).

Baburajan Kizhakedath

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