The Risk and Reward of AI in Business Transformation

It’s clear that there are benefits to be had from implementing AI in today’s organizations, both in terms of internal optimization and customer value. However, Hollywood’s perception of AI has instilled a fear across generations of what could happen when the technology becomes a part of our daily lives. While it’s unlikely that robots will be taking over the world any time soon, the dystopian representation isn’t totally unfounded, and it’s important that we are all aware of the risks, as well as the rewards, in our digital transformation strategies. 

The risks of AI  

Gartner® outlines some of the risks of using AI in its Board Brief on Generative AI: 

• Security and privacy: Enterprises must prepare for malicious actors’ use of Gen AI systems for cyberattacks and fraud.  
• Intellectual property (IP) and copyright: Enterprises should put controls in place to avoid inadvertently exposing enterprise IP or choose to invest in cloud-based approaches where the data is not retained and can be encrypted and remain under enterprise control. 
• Accuracy: Gen AI systems consistently produce inaccurate and fabricated answers. Outputs generated should be assessed for accuracy and appropriateness before being accepted. 
• Bias: Enterprises must have policies or controls in place to detect biased outputs and deal with them in a manner consistent with company policy and any relevant legal requirements.
• Compliance: Gen AI models are unpredictable and not explainable. For boards whose auditors and regulators require attestations regarding the data used by the enterprise, this will limit enterprise use or create risks.   
• Sustainability: Gen AI uses significant amounts of electricity. Enterprises that invest in it should choose vendors that reduce power consumption and leverage high-quality renewable energy to mitigate the impact on sustainability goals. 

The risks of ignoring AI  

This may seem like a lot of risks, but as mentioned above, there are ways to combat these and ensure the safe and ethical use of AI. On top of this, overlooking the integration of AI can have significant repercussions for any organization, potentially placing a business at a considerable disadvantage: 

• Competitive setback: By not leveraging AI, companies risk falling behind competitors that do.  
• Persistent inefficiencies: Without the analytical capabilities of AI, hidden inefficiencies and costs often remain undiscovered and unaddressed, leading to operational drag.
• Unchecked systemic bias: Failing to use AI in understanding and mitigating systemic biases can result in perpetuating existing prejudices within organizational processes.
• Talent acquisition and retention: An AI-averse stance might deter top talent, as professionals seek dynamic workplaces that embrace technological advancements.
• Incomplete digital transformation: AI is a cornerstone of digital transformation. Without it, organizations might not fully realize the potential of their digital strategies.