Artificial Intelligence

Shifting into high gear with intelligent automation

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Author: Data & Artificial Intelligence Leader, IBM Global Markets

Isuru W. FernandoOrganisations in retail and consumer products are entering a new phase of technological innovation with the help of automation. From automatically rerouting shipments, to bypassing bad weather, to personalising in-store services based on analysis of a customer’s facial expressions, AI-powered intelligent automation is rapidly transforming both industries in unexpected ways.

The IBM Institute for Business Value (IBV) surveyed 1,900 consumer products and retail executives for a new study to understand how brands and retailers are using intelligent automation today –  and what can be expected from it in the future The latest research shows that two in five retailers and brands are already using intelligent automation and that the number is on track to double within the next three years. Companies that aren’t experimenting with this capability risk falling behind and need to move quickly if they hope to remain competitive.

More than 70 percent of retail and consumer products executives expect their companies to be engaging in intelligent automation across the value chain by 2021

The surge in adoption

Over the next three years, it is anticipated that the adoption of intelligent automation will surge.

While supply chain planning is currently the main focus for consumer products executives, it’s projected this will shift to manufacturing, and product design and development; it’s in these areas intelligent automation can be transformational.  For instance,  AI-driven predictive maintenance will help identify potential machine malfunctions and automatically schedule the specific services needed to mitigate costly downtime.

For retail executives, the focus is on exploring ways to apply intelligent automation to cross-functional collaboration and interactions with customers, with the projected growth of adoption in supply chain planning (from 36% to 49%) and in-store experience (from 29% to 41%).

Figure 2 The expected areas of highest growth in intelligent automation adoption over the next three years differ by industry

Expectations vs Reality – the unexpected impacts of intelligent automation

Intelligent automation and AI is offering unexpected benefits to brands and retailers. Executives in the planning stages of implementation expect intelligent automation to incrementally enhance their current operations – improving operational efficiency, extending capabilities, and reducing costs. But the benefit of intelligent automation is certainly more far-reaching.

Executives who are already using intelligent automation are experiencing impacts that enable them to fundamentally change the ways they do business – increasing operational agility, improving the quality and speed of decision making, and enhancing the customer experience. The focus is less on lowering costs and more on increasing competitiveness and sustaining long-term growth.

Executives implementing intelligent automation are seeing more transformational impacts

Early Adopters in sales, marketing and customer-focused functions indicate improved customer experience as the top impact of intelligent automation, enabling retailers to unleash entirely new approaches to customer engagement and interaction.

Whereas in the supply chain, operations and logistics, the highest levels of impact are attributed to inventory productivity and operational agility. Harnessing AI and machine learning to automate processes is a game changer in better equipping companies to meet customer demand, maintain service levels and handle unexpected events with agility.

Figure 4 Early Adopters are experiencing a wide array of benefits from intelligent automation

Plotting the path to the future

By enhancing the customer experience, retailers can unleash entirely new approaches to customer engagement and interaction. With intelligent automation, they can identify customers’ anticipated needs at precise times and capture the right moment with the right offer in the pursuit of competitive advantage.

However, while intelligent automation offers retailers and brands tremendous potential for transformational growth, there are a number of critical factors to realising its benefits, including obtaining the right skills and culture, as well as challenges with the new risks tied to machine responsibility.

To explore the success factors, challenges, and recommendations to approaching intelligent automation in your organisation, you can read the full IBV report here.

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