AI Can Tell You a Lot About Your Business, but Only If You Give It the Right Information
There has been no shortage of news about artificial intelligence, from how it will transform business to whether it will eventually change the world as we know it.
I’ll leave that debate to the talking heads.
My question is much simpler:
How can AI help your business right now?
AI can help business owners make better-informed decisions. But it cannot replace the business owner’s judgment.
AI Is Only as Useful as the Information You Give It
AI becomes much more useful when it works within a structured business process and receives specific, relevant information about the business.
Consider the questions a business owner might ask:
- How can I increase sales?
- Why am I losing customers?
- How can I improve my business?
AI can certainly provide answers.
But if all AI knows is the question, its answers will likely be general suggestions, the kinds of answers that could apply to thousands of businesses.
To provide more useful analysis, AI needs relevant information about your business.
That might include your industry, company size, years in business, employees, market, customers, and competitors.
It could also include information about your financial performance, sales, operations, management, personnel, customer experience, technology, risks, and business goals.
But it isn’t simply a matter of giving AI more information. The information needs to be organized in a way that allows relationships and patterns to be examined.
Looking Across the Business
This is where AI can become particularly useful.
A business problem in one area may be connected to something happening in another area.
This is sometimes referred to as cross-functional analysis: looking at information from different parts of a business together rather than examining each area separately.
For example, suppose a business owner asks:
“How can I increase sales?”
A generic AI response might give the owner 12 ideas for increasing sales.
But suppose AI also knows that:
- Customer acquisition costs have increased.
- Repeat business has declined.
- A major competitor has entered the market.
Now the question has context.
AI can examine those pieces of information together rather than treating each one as an isolated fact.
Perhaps the issue isn’t simply that the business needs more sales.
Perhaps customer retention is becoming a problem. Perhaps the cost of acquiring customers has changed the economics of the business. Perhaps the new competitor is affecting both customer acquisition and repeat business.
Those relationships are much more useful to the business owner than another generic list of sales ideas.
What Should AI Help a Business Owner Understand?
Business owners don’t necessarily need another 20-page AI-generated report filled with generic recommendations.
They need useful information that helps them understand their business.
One of the most valuable applications of AI may be taking a large amount of organized business information and helping the owner answer questions such as:
- What appears to be working?
- What isn’t working?
- What may be contributing to the problems?
- What deserves attention first?
- What should I consider doing next?
Those answers can help the business owner develop a practical action plan, whether that means focusing on the next 90 days, the next six months, or longer-term goals.
The important point is that the business owner remains the decision-maker.
AI helps organize and analyze the information. The owner decides what to do with it.
AI Is Not an Oracle
AI is not an oracle, and business owners shouldn’t treat it like one.
It cannot replace the business owner’s judgment. It also cannot replace an accountant, bookkeeper, attorney, consultant, or other professional adviser when that expertise is needed.
It can, however, help organize information, identify patterns, raise questions, and bring issues to the owner’s attention that might otherwise be overlooked.
That distinction is important.
AI should not be viewed as something that makes every business decision for you. It should be viewed as a tool that can help you understand the information you already have and ask better questions about your business.
As with any online business tool, owners should understand how their information is handled and avoid entering highly sensitive personal, banking, or account-access information unless the service is specifically designed to protect it.
The Challenge Is Not Simply Having Access to AI
Most business owners can access AI today. That isn’t the difficult part.
The challenge is providing enough meaningful, well-organized information about the business to produce useful analysis.
If you ask AI a general question, you will generally receive a general answer.
If you give it a structured picture of your business, including its financial performance, customers, sales, operations, people, management, risks, opportunities, and goals, you give it much more to work with.
That can lead to a more meaningful examination of the business.
Where Business Assessment Is Going
I believe the next generation of business assessment tools will combine structured business evaluation with AI-assisted analysis.
This is also the direction we are taking at Business Growth & Project Funding Tools: combining structured business evaluation with AI-assisted analysis to help owners better understand what may be behind their results.
The goal shouldn’t be to give a business owner another simple score.
The goal should be to help the owner understand:
- What is behind the score
- Why certain areas may need attention
- How different parts of the business may be connected
- Which issues may deserve priority
- What questions the owner should investigate
- What actions may be worth considering
Ultimately, the goal is not simply more information.
It is better understanding.
Better understanding can help a business owner make better decisions about where to focus time, money, and resources.
AI doesn’t replace the business owner.
Used properly, it can help the owner see the business more clearly.