AI and Automation for Strategic Decision Making
Artificial Intelligence (AI) and automation have become crucial tools for strategic decision-making in the corporate world. Initially seen as a novelty, these technologies have evolved to become vital components of many organizations' strategic planning processes. They provide critical insights into vast data sets, help eliminate biases, and expedite decision-making processes 1. However, despite their increasing prevalence in areas like marketing, supply chain, and service operations, their use in strategy and financial planning remains surprisingly low at around 7% 1.
The Influence of AI and Automation in Strategic Decision Making
AI is often conceived as a "suitcase word," encompassing everything from analytics and automation to data analysis 1. While the complete automation of strategy development remains beyond current capabilities, AI tools already bring substantial value to strategic planning by augmenting human thinking and analysis.
The application of AI in strategic decision-making can be considered in six developmental stages: descriptive intelligence, diagnostic intelligence, predictive intelligence, action advising, decision delegation, and, ultimately, full autonomy 1.
Currently, many companies have successfully adopted AI in the descriptive and diagnostic stages, using it to analyze performance data and understand the root causes of various business outcomes. In the next stage, predictive intelligence offers a more advanced application, allowing companies to anticipate future scenarios based on past trends and current market signals. However, companies must use AI transparently at this stage, understanding why it makes specific predictions and assessing the trustworthiness of these predictions.
The influence of AI and automation in strategic decision-making is more significant in businesses with a rich data set, less volatility, and higher decision-making velocity 1. For instance, a mobility service provider uses AI to adjust its financial planning based on observed market pricing patterns, enabling it to maintain a balance between supply and demand 1. Similarly, a leading investment firm utilizes AI to identify investment opportunities by scanning for consumer mobile usage patterns 1.
Future Implications and Trends
As AI and automation evolve, we can expect to see them play an even more significant role in strategic decision-making. The following stages of development—advising action, delegating decision authority, and achieving full autonomy—may still be some way off, but there are already early examples of AI advising executives on potential value-creating actions 1.
However, AI tools are not meant to replace human decision-makers but to augment their capabilities and make decision-making more efficient and less biased 1. As we move towards a future where AI has a more significant role in strategic decision-making, the focus should be on using these tools to complement human expertise, not replace it.
Conclusion
The advent of AI and automation in strategic decision-making presents a new frontier for businesses. By embracing these tools, businesses can make more informed decisions, identify strategic opportunities faster, and ultimately gain a competitive advantage. However, the key to success lies in adopting these technologies and understanding how to use them effectively with human expertise.
