Will AI become the Future of Decision Making?
Good decisions, taken at the right time is essentially what grows the company. Managers are required to have good decision-making skills in order to increase profits, motivate and manage employees effectively, and work with the support of shareholders.
However, as globalisation increases across all countries, uncertainty fogs the decision-making processes. Uncertainty comes from a lack of information about the alternatives and the possible consequences from them. For example, will there be a shortage of human resources, new disruptive technology will emerge causing us to change and adapt or a worldwide pandemic leading to new government policies and if you’re a restaurant, your literal worst nightmare – no customers allowed outside to eat.
In decision-making processes, leaders often talk of a gut-instinct. Their innate pointer in the right direction. And in a world which is incredibly messy and complicated and sometimes gut instincts are vital. This human instinct, leveraging years of experience and personal judgment, as well as subconscious personality traits, can be difficult to explain to a machine. Therefore, in these scenarios, AI is less likely to mimic human problem solving and humans tend to keep their comparative advantage in situations that require holistic and visionary thinking.
So how can AI help managers in their decision-making processes?
AI can help reduce the complexity of a problem by identifying causal relationships and asserting the appropriate cause of action among many possibilities through causal loops
Predictive analytics can generate fresh ideas through probability and data-driven statistical inference approaches as well as identifying relationships among many factors. This removes some uncertainty- which as we mentioned above, is caused by a lack of complete information – so predictive analytics enables human decision-makers to more effectively collect and act upon new sets of information.
Prowler.io, an upcoming decision-making company has used such predictive AI technology to help their client, a pooling company shipping more than 30million pallets a year, accurately predict the number of pallets required and consequently engage in effective corporate decision-making practices in deciding how aggressive or conservative their strategies should be towards each of their suppliers.
Additionally, consulting firms such as Deloitte and McKinsey have already developed intelligent tools that offer monitoring and sensing of an organization’s external environment, aiding in their strategic planning. AI systems can help managers detect anomalies by providing real-time insight about early warning signs of bigger issues that allows for the possibility of timely corrective actions.
Overall, it is clear that Artificial intelligence is going to play a very useful role in decision making however it is important to remember that it will be a more meaningful tool for augmentation (extending human capabilities) rather than automation (replacing humans).