Every day we face the challenge of making decisions. No matter what you do or what your occupation is, you at least make thousands of minor decisions in a day. Most of the decisions are relatively unimportant ones such as choosing your breakfast and coffee. But other decisions are much complex than this. It might be about accepting a new job, relocating to a new city, or buying a house. Business leaders face a little more complicated decisions to take. Decision making is still one of the ultimate challenges for leadership in new entrepreneurs. Thanks to AI technology, as it is quite making it easier for decision-makers as there will be a lot of judgment in the machine predictions.
Here are a few pointers where AI is set to affect business decision making:
Faster Decision-Making
In this digital era, businesses have clearly accelerated shift in our society that shows no signs of slowing down. As a result, the ability to expedite the process of decision making is essential. For instance, with the help of AI-powered pricing, oil companies can dynamically alter the prices of gas according to the demand. Data show that this increases their profit margins by 5%. In a similar way, other services such as retailers, travel sites and other services use dynamic pricing regularly to optimize their margins.
Handling Multiple Inputs
Machines are proven to be far better than humans when it comes to handling many different factors at once and taking input from across multiple sources. They can also process a lot of information at once and use the probability to provide or suggest the best possible decision for a complex problem.
Less Decision Fatigue
Several psychology studies have proven that when individuals are obliged to make a lot of decisions within a short period of time, the quality declines as we gradually exhaust or mental energy over time. A case of application of this is in supermarkets where candy and snacks are placed at cash registers. Marketers are aware of the fact that shoppers get exhausted by making all the decisions made throughout the shopping tour and shoppers find it much harder to resist the sugar rush at the cash counter. But unlike humans, machines can resist the sugar rush. Algorithms are not prone to decision fatigue. They can make endless decisions throughout the day. By using AI, the executive can avoid making bad decisions due to exhaustion.
Multi-Tasking
Sometimes, executives need to look at a different set of factors while making complex decisions. The decision-maker may get overwhelmed when there’s too much data to be considered which may eventually lead to terrible decisions. On the other hand, machines can handle inputs easily without exhausting or confusing themselves. A set of instructions and programs is all that’s needed to guide the machine to use probability and suggest the most logical decision.
Improvised Human Judgement
Humans will be the ones to make the judgment calls in a decision until emotional intelligence is instilled in AI. The two factors that form the basis of judgment in business is Emotional Intelligence and Experience. Of course, a machine is allowed to make decisions on simpler tasks that don’t involve these two factors. But for more crucial issues where the probability of a mistake is high and risky, a human is needed to take that call. Even though AI can’t make all the critical decisions all by itself, it should still be a part of the judgment making and play its role by providing humans with all the facts and figures including the possible outcomes and predictions.
AI is becoming a vital ingredient for the success of businesses in this era. It is an ever-growing technology that helps businesses to develop new ideas, gain better insights and improve business decision making. To anticipate the risks and consequences of critical business choices, it is not enough to just have common sense and experience. AI can help businesses with their varied application in making effective decisions that positively impact businesses.