Technology is transforming many fields of study by introducing new tools and possibilities for people to communicate, collect data, and use it to test hypotheses. Business administration is not an exception, with more non-technology oriented companies adopting artificial intelligence (AI). This paper will examine how artificial AI is transforming business administration, the cause and effect of this change, and the impact it will have on employees.
AI has the potential to improve different aspects of business administration. AI is a type of technology that uses an algorithm to analyze information and make predictions or suggestions based on this data (Davenport & Ronanki, 2018 ). This technology has a wide scope and application, which makes AI even more useful for business administration professionals. Davenport and Ronanki (2018) state that it can be used for automation, information analysis, and engagement with different stakeholders. For example, AI can transfer customer information from call-center records to customer files, predict the demand for a product, or communicate with customers or employees to answer their questions. These are only a few options that managers can use to enhance processes, meaning that AI can become an integral part of business administration.
The current state of AI technology does not allow launching ambitious projects that will completely change the way businesses operate. According to Davenport and Ronaki (2018), executives from 250 companies “believe that AI will substantially transform their companies within three years” (para. 2). However, the majority of business projects that use AI are very ambitious and have a low chance of succeeding until the technology is further developed. Therefore, despite artificial intelligence being an advanced technology with a broad scope of capabilities, it is more probable that its adoption will impact standard day-to-day processes and not change the way business administration is viewed.
The reason why these changes occur is the rapid development of technology and the adoption of software that helps enhance people’s productivity. Many businesses already use different types of technology – cameras, sensors, data collection software, and others (“Ways technology has changed business administration,” n.d.). Hence, they already have the infrastructure that allows them to add AI and adjust the existing processes, and there is no need to make significant investments to purchase hardware and software.
Another reason why more companies that are not technology-oriented adopt AI is the cots of implementing and using AI in comparison to the benefits it provides. For example, with automation, businesses can reduce the number of injuries because they no longer have to expose their employees to dangerous work conditions (Harvard Professional Development, n.d.). Many companies are starting to adopt AI in their supply chain management to improve efficiency. Due to the fact that AI as technology has been present since 1943, the advancements of it and the increasing use of computers for collecting different types of information allowed to make AI applications affordable for businesses (Harvard Professional Development, n.d.). Therefore, it is probable that the role of AI in business administration will continue to increase, with more and more departments relying on it in their work.
Although AI is mostly associated with technology-oriented companies, many businesses in non-IT fields are adopting it as well. For example, American Express uses it to forecast customer loyalty based on the archived data (“Ways technology has changed business administration,” n.d.). Another example is a fast-food company that integrated AI into their digital menu system for drive-through restaurants and used AI to analyze information about the line length. If the line was long, the AI updated the menu to show options that can be prepared faster, contributing to a decrease in waiting time and increasing customer satisfaction (“Ways technology has changed business administration,” n.d.). These examples suggest that future business administration professionals will have to be trained to understand how AI works and how to use it to make data-driven decisions for their businesses and how to integrate AI for automation of some processes.
The effect that this will have on the future employees working in business administration is varied because, for some individuals, the work will become more effective while others may lose their jobs. Some positions may be eliminated because AI automation will replace them, benefiting the company by reducing costs (Harvard Professional Development, 2019). This change will mainly affect managerial positions and not top executives. However, Uzialko (2019) states that there is uncertainty in expert’s opinions, with some saying that millions of jobs will be replaced with AI, while others believe that the impact will be less significant. In either case, AI will change the way business administration professionals operate, their skillsets, and their approach to work.
Overall, this paper examined the adoption of AI and how this change affects business administration. The cause of this transformation is the availability of reasonably priced AI solutions and the infrastructure for its adoption, which most businesses already possess. There is uncertainty in determining the impact that AI will have, since it will probably replace a large number of positions that currently exist, leaving millions of people without a job.
References
Davenport, T. H. & Ronanki, R. (2018). Artificial intelligence for the real world.
Harvard Professional Development. (2019). Business applications for artificial intelligence: An update for 2020. Web.
Uzialko, A. C. (2019). How artificial intelligence will transform business. Business News Daily.
Ways technology has changed business administration. (n.d.). Web.