A recent article in Harvard Business Review (HBR) asks if AI is a system or is it a solution like so many organizations think?

An interesting question, but one that I would rephrase: Is AI a solution, is it technology that supports the solution, or is it part of a larger system? I have always thought of AI as supporting the digital transformation, which includes all the organizational changes that are needed to make use of digital technologies. So I have always thought of AI more broadly than either a solution or technology. The HBR article points out that 1) 80% of organizations surveyed are developing some sort of AI applications and that 2) companies that think of AI as a system rather than a solution will see their revenues grow by as much as a third over the next 5 years.

To understand why this might be the case, let’s consider a few possibilities:

Solution

If we think of AI as a solution, we need to be pretty clear about what problem it solves, or what business need it addresses. For example, let’s say we need to be able to predict which customers will buy our new product. Sure, this sounds like a business need, but it really is a solution. Ah, you might be thinking, predict customer patterns = predictive analysis, so the solution I need is predictive analysis. No, predictive analysis is a way we can predict who will buy our product. It supports the solution. But what is the business problem? It might have to do with loss of market share, decreased revenues, or a number of other real problems.

So instead of:

  • Problem: We need AI to remain competitive
  • Solution: AI

We can think of it as:

  • Problem: Market share has decreased by x% since this time last year with resulting revenues down by $x.
  • Solution: Ability to predict which customers will buy our new products to increase our customer base and to increase revenues.
  • Technology needed to support the solution: Software to analyze the data for customer buying patterns and predict customers who will buy our product