Table of Contents
Innovative technologies have a great impact on the world, and yet still some people misunderstand their conception. It seems to many entrepreneurs that the implementation of an AI will solve their problems at once, automate their processes, work with their clients, and do everything on its own without human intervention.
No matter how hard we’d like to believe in it, the real world is much different from these things. It would be nice to live in a perfect world but in ours, every technology has its risks. Fortunately, these risks can be mitigated.
The Understanding of Artificial Intelligence You Need to Have to Mitigate the Risks
Artificial intelligence is a self-educating technology that can analyze data, make conclusions based on this analysis, and this way learn by itself. To understand better how this all works, let’s take a simple example. We’ll look at it through an app you can download from PlayMarket or AppStore; the app that is still discussed on Reddit threads even though it was released in 2017.
The app is called Replica AI. Replica is a chat-bot that is really convincing and can make you think about its cognitive abilities and self-awareness.
The bot was created for personal user experience; so this is not a business application by all means. Its creators say you can use the app like an “AI friend” in your pocket you can talk to at any time.
With time, Replica learns how to behave and chat with the user, becoming their “replica”, memorizing their interests, hobbies, and even the usual style of texting.
The algorithm of its work is something like this: the technology gets the data from chatting with the user, analyzes it, and by this changes its own knowledge and behavior. With time, the logic of AI is formed, and this is the end product of its work.
But the understanding of AI is not only about its technical aspects; what business gets from this technology is also important to know what you’re dealing with.
So, AI is able to automate and optimize mass emailing, customer relations, create chat-bots for virtual support service, automate the supply chain, visualize the products in customer's interiors, and others.
According to the McKinsey Global Institute research, artificial intelligence could add $13 trillion to the global market annually by 2030, and about 70% of companies will have implemented the technology into their workflows by then.
However, innovative technology implementation is not the easiest thing and there is no common way of how to mitigate risks for everyone.
The video you see below is about the main AI implementation challenges. Maybe this will be useful to you once you’ll need to mitigate risks.
Risks of AI Implementation and How to Mitigate Them
First thing first, AI, as any innovative technology, is an investment. And every investment is a risk.
This is the risk that many could take since the profits will be much higher. But that doesn’t mean that you should not mitigate it!
So, what are the main risks of AI implementation? The question that can be answered by your boring friends with quotes from their master paper. T
his technology has a lot of aspects that are unique to every business.
However, we can roughly divide the risks into internal and external.
Internal risks are those that exist in the AI itself. And these need to be mitigated by both the technical implementer’s and investor’s sides.
So, these risks are:
- data: to implement AI, you need to train it only on verified data which you will have to collect and verify beforehand. If you ignore this part of the implementation, the AI may produce flawed results or conclusions;
- security: securing the AI and the data it uses can be difficult if you don't have servers with the proper level of safety. Fortunately, a trusted technical partner can help you secure and select or build a server, and mitigate this risk;
- weird behavior of an AI: the evolution of artificial intelligence needs to be controlled. If not, AI can turn into something that offends and discriminates against your customers, sabotages your work processes, and becomes a disadvantage rather than an advantage. To prevent this, ensure that you have control over the evolution, learning, and training of artificial intelligence, and this will help you mitigate the risk.
In the image above you can see all the risks associated with artificial intelligence. We have already mentioned the internal risks associated with the technology itself. Now it is time for the external risks, which can lead to the failure in the implementation of artificial intelligence tools.
.1 Strategy risk mitigation
This risk is related to the AI implementation strategy and represents the worst that can happen if you don't pay enough attention to the strategy.
One mistake, in the beginning, can detonate a time bomb that will sabotage your workflow for the entire existence of the AI software. Uncoordinated work of your employees, unrealistic expectations, a wrong understanding of AI capabilities; all these can give not just a worse result expected, but the exact opposite from what you wanted.
The difficulties you may encounter if you build an implementation strategy incorrectly:
- The wrong project: you haven't correctly assessed your needs at the beginning and selected the wrong tool for integration. A technical partner can help you overcome this challenge by assessing your business needs and selecting the right AI tool to improve your workflow;
- Lack of technical expertise and executive support: Some business owners adopt the technology into the project by themselves with the help of third-party freelance experts. This decision can cost you the productivity and quality of the implemented tool if you don't have enough technical background. In addition, a trusted technical partner is also the executive support for your project and so they can help you mitigate the risk;
- Lack of coordination among project stakeholders: the AI implementation strategy and its execution depend on the coordinated work of different departments and top management. Without this, the whole implementation process will move slowly and you will have to go back through the process to correct mistakes made on the way.
The risk mitigation: create a strategy for artificial intelligence implementation. To do this, define exactly what are the goals of AI implementation in your company and what you would like to achieve with the integration of this technology. To assess artificial intelligence effectiveness, create milestones, and determine the desired results. As time passes, you will be able to compare expected and actual results and evaluate the effectiveness of the technology, mitigating the risk.
An assessment of resources is also a necessary step in an implementation strategy creation. Evaluate your company's capabilities and make sure there are no gaps in your resources. You can mitigate the risk if you have enough capabilities to handle the entire implementation process, with all the complexities and possible difficulties.
.2 Finance risk mitigation
The complications with resources apply to any innovative technology. There is always the risk that you cannot afford yourself to implement AI. If you haven't budgeted correctly, or if you haven't considered other possible spendings (staff training, infrastructure upgrades, debugging workflows), the result will not be the best. You may encounter a slowdown of your work processes, a longer return of investments (ROI) process. All this can lead to lower business efficiency, a loss in profitability, and we know exactly that you would like to avoid such an outcome. To mitigate this risk.
If we're talking about custom software development without AI implementation, the resource issues feel different. You still have financial risk and you might suddenly run out of resources, but at least you can pause the development after a minimal viable product is created at the first stages of working with the code. It will be able to bring your profits before the final product is created.
When it comes to artificial intelligence, a minimum viable product won't help you; it isn't possible to implement the technology half-way. Yes, the implementation of AI is not the development of full-fledged software and it takes less time, but it will also be impossible to pause in the process.
According to the infographic you see above, 40% of companies think that the high costs of AI solutions are a challenge. This is evidence that most companies around the world see AI as an expensive solution and are not willing to deal with the risks that go along with implementation. But if you're able to mitigate the risk, the table turns.
The risk mitigation: assess your chances. The best way to mitigate financial risk is to calculate it as accurately and correctly as possible. Create a financial plan for the implementation of artificial intelligence. For this, take into account all the little things related to the implementation.
Your plan must include:
- an estimation of the instrument's that you want to implement costs;
- the costs of work for implementation;
- spendings on staff training;
- emergency costs: the possibility of processes slow down, possible delays in return on investment, etc.
Consider what kind of technical contractor you're working with. If it's a development company that has additional services included, you'll be able to save money on finding third-party experts. If it's a freelance team, include a tester, a consultant, a business analyst, and other experts who may be useful to you.
.3 People and processes
Be prepared to meet resistance from your employees. Not all people are enthusiastic about innovative technology. The idea that AI will take their jobs away and replace them where they are considered professionals may still live in the minds of your colleagues.
Referring to the statistics above, 37% of companies pointed to a separate challenge: the fact that their process managers do not understand how such technologies work. Another 35% said that there is a lack of specialists in the field of innovative technologies. So, the problem of people's attitude towards artificial intelligence affects not only the people themselves and their perspective but also your business. The higher the resistance to integrating technology, the lower its effectiveness in your work processes will be. The one more risk you will have to mitigate.
Work processes always start in people's minds. Therefore, their resistance to the introduction of innovative technologies not only inhibits the work of the technologies themselves but ruins the implementation as a whole. So, without mitigating this risk you won't go far.
The risk mitigation: build on your strategy when working with people. Create a presentation and documents for the employees to monitor their work and explain what place AI has in their new work processes. It's also important to show your staff what is the goal of the implementation and give them the opportunity to evaluate their performance with the technology. Take their opinions into account when evaluating the effectiveness of the AI, tell them about risks you're mitigating.
It will also be helpful to assign a supervisor over human employees to pre-assess expected and actual results by a third-party expert.
In addition, it's also important to give clear instructions to your employees in order to unlock the implemented technology’s full potential. Train your people (or, if necessary, hire new staff) to make sure that not only the technology works well, but also the people do their best. This is the best way possible to mitigate this risk.
.4 Technology
Some believe that innovative technologies are still unstable. So, according to the study above, 31% of companies agreed with this statement. Another 18% said that innovative technology is already overflowing the market.
Fortunately, we can't agree with that. The stability of artificial intelligence is shown by the large number of companies that use it and continue to bathe in the rays of fame. You've probably heard about Shopify, IBM, Amazon, and eventually Google, and their amazing success in conquering artificial intelligence and mitigating the risks.
According to Wired, about 25% of companies with more than 250 employees are using or thinking about using artificial intelligence.
Nevertheless, the risk that you may not get a team that is reliable enough when implementing artificial intelligence remains present.
Even though we are talking about the implementation of an off-the-shelf tool that has been tested by millions of other users, there is still the possibility of poorly done work. It is important to mention that it can result not only in the poor performance of an AI tool but can also lead to bugs in your software. This may happen because of alterations the technical team made to the code of the software solution.
In this case, it can be the fault of both the developer and the tool which can conflict with the software or API you have at this stage. So think about this risk mitigation before it killed all the hard work you’ve done.
The risk mitigation: Choose exactly what's right for your company. Find a tool that fits your unique needs, or talk to a technology expert who can help you decide on the best solution for your business. Also, pay attention to your customer feedback.
It is also important to pay attention to the technical partner. Read reviews of those who you want to trust with the implementation of innovative technologies, make sure they can do the task, and that they are really experts in this field.
Post-release maintenance will also be a great addition and can influence your choice of a technical partner. With it, you'll be able to make adjustments to the AI if necessary after getting the first feedback from your customers.
Artificial intelligence is an amazing technology that changes industries, boosts businesses, and makes millions of dollars every day. So instead of being afraid of the risk, we need to find ways to mitigate it.
Yes, it's going to take a lot of work to control the AI training process and processes within the company. And you can quite rightly say that the risks should mitigate themselves because we all dream of AI that will do everything for us.
However, for now, the one who can take care of all the technical difficulties is a reliable technical partner. They will carry on all the worries regarding the software and the whole technical part of your company.
The rest is still on your shoulders. Reputation as an innovator is not an easy task, but the benefits outweighted the cost.
