Essay on the Importance of Innovation in Business

Innovation usually refers to changing processes or creating more effective processes, products, and ideas. Innovation can act as a catalyst for growth and development which can help one secure success in the marketplace. The importance of innovation in creating competitive advantage and improving organizational growth cannot be understated. Technological innovation is often misunderstood as people believe it’s solely related to computers or electronic products such as cellular telephones or international networks. Technological innovation also doesn’t only occur in complex products, processes, or systems. Technological innovation does not have to be complex, but it has to be new and aim to implement the technology it embodies in the marketplace. In short, technological innovations comprise new products and processes, as well as technological changes in products and processes. Even as new technologies are developed, innovation around the application of existing technology is rapidly changing how organizations operate and how we interact with the world. Some of the technological innovations can be listed as artificial intelligence, Blockchain, and automation. Some of the emerging technological trends are citizen development, self-powered data centers, drones, and done ops centers. Artificial intelligence is about machines with human attributes. Using algorithms that adapt to various factors like location, speech, and user-history machines can perform tasks that are tedious, more accurate and much faster than humans without exerting much of an effort. Within a few years, analysts predict that all software will use AI at some level, according to US research and advisory firm Gartner. The field of AI research was first founded at a workshop held on the campus of Dartmouth College in 1956. Investment and interest in AI rocketed in the late 1900s, more precisely in the first decades of the 21st century when machine learning was successfully applied to many problems in academia and industry.

The beginning of the field of AI was founded in 1956, at a conference at Dartmouth College, in Hanover, where the green ‘artificial intelligence’ we first coined. MIT cognitive scientist Marvin Minsky and others who attended the conference were extremely optimistic about AI’s future. After several reports criticizing progress in AI, government funding and interest in the field dropped off from the period of 1974-1980’s that became known as the ‘AI winter’. It was later revived in the 1980s when the British government started funding it again in order to compete with the Japanese one. Research began its pace after 1993, and in 1997, IBM’s Deep Blue became the first computer to beat a chess champion when it defeated Russian grandmaster Gary Kasparov. And in 011, the computer giant’s question-answering system Watson won the quiz show ‘Jeopardy’, beating reigning champions Brad Rutter and Ken Jennings (Lewis, 2014).

The goal of AI in the early days was to recreate the working of the human mind in a machine (and hence the oxymoronic term): this goal has evolved over the years into a more attainable one, namely, that of making computer systems easier to use by humans whatever their training and understanding. The current goal of the AI community is to merge AI smoothly into existing software and systems, making them easier to use. Thus, expert systems, the most prodigious product of AI research, are mated with existing systems, like automatic teller machines, to make the latter more expert in allowing a withdrawal or an advance without the intervention of a human banker. Through the use of algorithms, AI can provide the necessary security and help to create a layered security system that enables a high-security layer within the systems. Through the use of advanced algorithms, AI helps identify potential threats and data breaches, while also providing the necessary provisions and solutions to avoid such loopholes. Often, the hosting server is bombarded with millions of requests on a day-to-day basis. The server, in turn, is required to open web pages that are being requested by the users. Due to the continuous inflow of requests, servers can often become unresponsive and end up slowing down in the long run. AI, as a service, can help optimize the host server to improve customer service whilst enhancing operations. As IT needs progress, artificial intelligence will be increasingly used to integrate IT staffing demands and provide seamless integration of the current business functions with technological functions.

From natural language generation and voice or image recognition to predictive analytics, machine learning, and driverless cars, AI systems have applications in many areas. These technologies are crucial to bring about innovation, while also providing new business opportunities and reshaping the way companies operate. Many modern AI applications are enabled through a sub-field of AI known as 'machine learning', which works without being explicitly programmed. ML uses algorithms and statistical models to perform a specific task without using explicit instructions, instead relying on patterns and inference, basically, it retains the ability to automatically learn and improve from sheer experience. For example, ML can read a text and decide if the author is making a complaint or an order. It can also translate large volumes of text in real-time. With time, AI research has enabled many technological advances like virtual agents and chatbots, suggestive web searches, targeted advertising, pattern recognition, predictive analytics, autonomous driving, automatic scheduling, and so on. Many businesses take up artificial intelligence (AI) technology to try to increase efficiency and improve customer experience. AI helps to improve customer services, automate workloads, optimize logistics, increase manufacturing output and efficiency, manage and analysis of data, and more. By deploying and implementing the right AI technology, a business can save time and money by optimizing routine processes, making faster decisions based on outputs from cognitive technologies, avoiding mistakes and human error, increase revenue by identifying and maximizing sales opportunities. AI is always around us. One might not notice it, but AI has a massive effect on our daily life. Many organizations use AI for business management, e-commerce, and marketing. It is effective in spam filters, smart email categorization, voice-to-text features, security surveillance, fraud detection, dynamic price optimization, smart searches and relevance features, content curation, customer segmentation, social semantics, and so on. Rather than serving as a replacement for human intelligence and ingenuity, artificial intelligence is generally seen as a supporting tool. Although artificial intelligence currently has a difficult time completing commonsense tasks in the real world, it is adept at processing and analyzing troves of data far more quickly than a human brain could. Artificial intelligence software can then return with synthesized courses of action and present them to the human user. In this way, humans can use artificial intelligence to help game out possible consequences of each action and streamline the decision-making process.

“Artificial intelligence is kind of the second coming of software. It's a form of software that makes decisions on its own, that's able to act even in situations not foreseen by the programmers. Artificial intelligence has a wider latitude of decision-making ability as opposed to traditional software”, – the CEO of machine learning company SparkCognition, Amir Husain.

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Artificial intelligence is also progressively changing customer relationship management (CRM) systems. Software like Salesforce or Zoho requires heavy human intervention to remain up-to-date and accurate. But when you apply artificial intelligence to these platforms, a normal CRM system transforms into a self-updating, auto-correcting system that stays on top of your relationship management (Uzialko, 2019).

Results of a recent survey indicate that artificial intelligence can assist businesses in areas ranging from customer support to personalization.

As shown above, AI not only solves the workload problem but also contributes to revenues, investments, customer service, productivity, and efficiency. From better chatbots for customer service to data analytics to making predictive recommendations, deep learning and artificial intelligence in their many forms are seen by business leaders as an essential tool (Dern, 2019). In the present context, organizations are already using artificial intelligence to make practical decisions. For example, Coca-Cola released Cherry Sprite, which was derived from its AI product analysis. Furthermore, the soft drink company is planning to create its own virtual assistant to incorporate into its vending machines (Matskevich, 2019).

Innovations in information and technology are driving both globalization and the change of value creation toward services. They are most importantly challenging companies to adapt to their business model, organization, and corporate culture continuously and simultaneously to stay competitive and innovative. An analysis of IBM’s transformation reveals the opportunities and risks associated with innovations, and it also describes that mastering professional change management will become a core issue for many organizations and companies as they will not be accustomed to sudden changes. Disruptive technological innovations regularly force entire industries to adapt their business to new ways and processes which usually go against their established technology (Christensen, 1997, pp.125–131; Picot et al., 2008, p.7). Technological change can bring about advantages and opportunities for businesses as everything has its own set of pros and cons. Obviously, new technology can create new products and services, thereby creating entirely new markets and opening new aspects for a business. Moreover, improvements in technological products and processes can increase productivity and reduce costs, which can be considered as the main goal of any company. A disruptive technology is something that significantly alters the way businesses or entire industries used to operate and leads them in a risky yet promising direction. This is the reason why often companies fear changing the way they approach their business for fear of losing market share or becoming irrelevant. Recent examples of disruptive technologies include e-commerce, the Internet of Things, and ride-sharing to mention a lot. Artificial Intelligence itself can be considered as a disruptive technology as it forces significant changes in the ways and processes of an organization. A disruptive technology may take a longer duration of time to get developed compared to the existing technology and it also involves more risk than the existing technology, but it can achieve a faster penetration and replaces the established technology with prominent results so significant that it leaves a huge impact. Every company must carefully consider which disruptive innovations might influence their value chain and plan to respond to them or figure out whether they should use them in their business and if they can produce significant results with the new adaptation. They should understand their capability and limits to meet the outside dangers and opportunities of digitization. The invention of the Spinning Jenny 250 years ago, expanded the speed with which cotton could be transformed into yarn, impacting the textile business, which resulted in the era of the Industrial Revolution. The revelation of penicillin in the mid-1900s permitted already fatal contaminations to be dealt with, opening the door to modern surgical methods. In the mid-twentieth century, the creation of the transistor started a revolution that is still driving economic and social development (Agrawal, 2016).

A recent article by the online technology site Good Audience states that organizational leaders should disrupt themselves before technology disrupts their business, meaning that it is very crucial for a company to first realize the advantages as well as risks of innovation. Understanding the power of innovations such as information technology or artificial intelligence can increase business opportunities and growth, but can also lead to major losses if not utilized properly. Intuit’s Alex Chris states that disruptive technology can automate back-office tasks, make smarter business decisions, deliver highly personalized customer experiences, gain customer insights for product development, and employ a virtual assistant, be it a small company or a flourishing organization. Thus, no matter the size of the organization, technology always has both tangible and intangible benefits that will help a company progress actively and produce the results that customers demand. Although innovation can have some undesirable consequences, change is inevitable, and, in most cases, innovation creates positive change. Generally speaking, the main purpose of innovation is to improve people’s lives. When it comes to managing a business, innovation is the key to making any kind of progress.

References

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