what artificial intelligence means for the c-suite.

In a very short space of time, AI (artificial intelligence) has become a familiar feature of office life. Microsoft’s Copilot helps with daily tasks, LinkedIn’s AI can create status updates, and Google will soon respond to search queries with an AI-generated summary.

AI is one of the fastest-moving waves of digital transformation we’ve ever seen. Leaders now face some crucial decisions. Which AI tools should you invest in? How will AI affect your hiring plans? What are the biggest risks of adopting AI?

The most important question of all is: how can your business benefit from artificial intelligence? To answer that, let’s look at what other companies are doing.

how are companies using AI right now?

Artificial Intelligence is still an early-stages technology, so there’s little data regarding long-term benefits.

However, we’re hearing stories of some companies using AI in innovative ways. Here are a few examples.

better deal sourcing for PE firms

Looking for investment deals can be an arduous process. Private equity firms spend an enormous amount of time examining documents and gathering public information while searching for their next opportunity.

Some companies have started using AI to speed up this process. British investment firm BC Partners has begun using ChatGPT to rapidly analyze data and create summarized reports. Already, this approach has helped it identify add-on opportunities that maximize deal values.

improved risk and compliance processes

Artificial intelligence excels at pattern recognition, which makes it an ideal tool for risk and compliance tasks. One major global accounting firm has recently piloted a scheme that uses AI in its auditing process. The company’s first experiment identified two irregularities, which human investigators later discovered to be fraudulent.

Internal controls still require human oversight, but AI makes the process faster and more reliable. Automation also reduces workloads for junior compliance analysts, allowing them to focus on more high-level work.

faster R&D cycles

R&D (research and development) is one of the most promising areas for AI technology. For example, drug manufacturers currently face an average R&D cost of $2.2 billion per discovery with an average cycle time of seven years. AI can help reduce these costs and get life-saving drugs on the market faster than ever.

A new breed of AI-driven startups are trying to drive this change. Notable companies include Atomwise, which aims to improve the drug discovery process; Cradle, which designs improved proteins for bio-based products; and Insilco Medicine, which uses AI to improve drug testing processes.

what are the main opportunities for AI adoption?

Here at Tatum, we’re beginning to see AI make a difference to our clients, as well as to our own internal processes. Some of the biggest opportunities created by AI include:

efficiency

AI can reduce workloads, especially with repetitive tasks such as writing emails or analyzing documents. As stated in our previous blog on finance strategy: “We’ve found the most successful solution is embracing automation tools. CFOs are increasingly leveraging cloud-based software and directly engaging with teams that impact data analysis.”

innovation

By automating repetitive tasks, you’ll give your team more time to focus on strategic work and innovation. This impacts every department, from product development to human resources. AI can also drive innovation by performing complex analytics, as well as offering powerful brainstorming tools for your team.

customer experience

AI powers a new generation of customer-facing tools, such as chatbots that provide scalable, always-on customer service. Customers can use these tools to get answers, obtain quotes and manage their accounts. A great AI-powered experience will lead to improved customer sentiment and higher lifetime values.

decision-making

Artificial intelligence has an important role in the C-Suite, too. AI will move data-driven decision-making to the next level, allowing CEOs and CFOs to request detailed analysis, game out various scenarios and prepare planning documents. This will enable faster, sharper business decisions.

co-piloting

Will AI replace human employees entirely? It’s unlikely. Instead, we expect to see AI in a “co-pilot” role, allowing people to work faster and smarter. AI tools could potentially act as tutors and mentors to junior employees, allowing them to upskill faster than ever. More experienced staff can use AI tools to automate tasks, manage workflows and improve their productivity.

what are the risks of implementing AI?

AI is an evolving technology, offering risks as well as benefits. We advise our team and our clients to be aware of the following pitfalls:

results aren’t always reliable

Generative AI systems are prone to “hallucinations,” which cause the system to present false or inaccurate information as fact. One study found that 3 percent of ChatGPT’s output contains hallucinations, while other sources claim it’s as high as 20 percent.

bias can creep in

An AI system will contain any biases found in its training data. Perhaps the best-known example of this is Amazon’s AI-powered hiring system, which rejected all-female candidates for engineering roles. The system had been trained on data from previous applicants, the majority of whom were men, and the algorithm inherited this bias.

privacy and compliance rules are changing

Legislative frameworks are emerging around the world, such as the European Union’s AI Act and the USA’s proposed AI Bill of Rights. These changing rules may create compliance issues that affect the way you use AI, especially when processing personal data.

human oversight is always needed

AI tools can’t handle 100 percent automation on most tasks. Human oversight is still required to avoid errors, identify hallucinations and audit outputs. On top of that, it’s also important to remember the value of the human touch, both in customer interactions and within teams.

lack of AI skills

The AI skills gap is becoming a serious issue. Around 75 percent of leaders say they’re struggling to find AI talent, while an estimated 40 percent of the workforce may need to retrain to adapt to a post-AI world. For leaders, there are crucial decisions to be made about investment, recruitment and upskilling.