Is AI here to stay? An analysis of the challenges of its implementation
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SUMMARY
Artificial Intelligence (AI) has been the subject of attention in the business world. This is because it has helped in the development of several projects and in the daily life of companies in different sectors, demonstrating the importance and benefit of this tool, especially in the context of business. There is a race by the so-called big techs for the improvement and use of AI, with emphasis on generative AI, as it enables the highest degree of automation among AI's and consequently is the most used to perform tasks instead of humans. This case study seeks to analyze - from the point of view of Pedro, a business manager - the strengths, weaknesses, threats and opportunities of the use and implementation of AI to assist the Customer Relationship Management of Eleva, a consulting company in Administration. Focusing on the areas of culture, processes, strategies, and databases, the case addresses the harms and benefits of implementing AI and generates a debate about its possible consequences and possibilities for Eleva.
Artificial intelligence as a digital solution?
Pedro is the manager of Eleva, a company specialized in Administration consulting, and responsible for the customer sector. The company emerged in the early 2000s, with the development of the internet and the so-called 3rd Industrial Revolution. Some characteristics of this period are the implementation of technology, process automation, use of computers, electronic systems and software in industries and companies as a whole.
However, even having the basics in terms of technology, Eleva has had a little difficulty throughout its history to follow the trends of modernity in the market. Its founders were more conservative, believed more in direct contact with customers and saw this as something fundamental in the consulting business. Technical visits, interviews, meetings and presentations were always done in person and the knowledge of employees was extremely important for a successful consultancy.
With the COVID-19 pandemic, the company was forced to adapt, opening spaces for change. But, even today, being in the second generation of directors and consolidated in the market with a large customer base, some of the most conservative practices still exist, due to the company's organizational culture.
Currently, the customer portfolio is vast and diversified, composed of large companies that seek solutions in various segments: finance, process analysis, marketing, people management, among others. By providing its services to several companies, Eleva began to have difficulties in maintaining a close relationship with its current customers and prospecting new ones. Therefore, he asked Pedro to think of something to help them.
With a degree in business administration and known for his technical skills, strategic and innovative vision, Pedro always seeks the best results in terms of processes, efficiency and profits. As an AI enthusiast and taking advantage of its current popularization, he sees the perfect opportunity to implement it in the company where he works. Its intention is to leverage its sector, taking advantage of the various benefits that AI can bring. In addition, Pedro also aims to evolve in his career, with the expectation of obtaining some promotion or raise, if the implementation of the new system is successful. It is important to emphasize that research shows that the advanced collection, processing, and learning capacity of AI facilitates the decision-making of companies (Jabbar et al, 2020), previously based on human capacity, susceptible to limitations.
However, Pedro knows that this is not an easy task, as he needs to convince Eleva's board of directors that this is positive for the company as a whole. After all, your reputation cannot be tarnished with mistakes and that is why you need to be assertive in what you do, since the use of AI represents a great leap in innovation in your sector.
Studying more about the subject, he realized that several aspects need to be taken into account for his idea to work and bear good fruit. Thus, he decided to base himself on a Microsoft document, which defines the main focuses for implementing AI in organizations. They are: culture, strategy, processes and databases. In addition, Pedro decided to use the SWOT analysis tool (Humphrey, 1960), to list the strengths and weaknesses, threats and opportunities, if the implementation of AI occurs. The following month, he will present his proposals to the company's board of directors.
Microsoft's document, named MAIVA (Microsoft AI Value Accelerator Manual, in Portuguese), serves as a guide to help structured AI development by enterprise IT departments. It was developed considering the speed and results of the use of AI and systematically seeks to help companies scale AI initiatives.
Okay, but what is it and when did artificial intelligence appear?
The undated question of whether it would be possible for a machine to think like a human led Alan Turing to develop the primordial concept of Artificial Intelligence in 1950. For this reason, Turing – a mathematician, computer scientist and famous British cryptographer with an important participation in the Second World War – is considered by many to be the pioneer in this area. The Turing test is still used today as a reference to evaluate AI's (Haenlein & Kaplan, 2019).
The term AI, formally introduced by John McCarthy, emerged in 1955, during a conference at Dartmouth College, in the USA and was defined by: "The science and engineering of creating intelligent machines" (Manning, 2020, 1) and by intelligent we mean capable of adapting, learning, solving problems and achieving specific results.
Nowadays, it can be said that modern artificial intelligence, which originated from Turing, simulates human intelligence according to the database used. Through repetition actions, it is able to perform various tasks, such as recognizing sounds, objects, solving mathematical and logical problems, and understanding languages (Large Language Models - LLM's). This concept has been adapted to innovations in the area and today has complementary concepts (but which are still subfields of AI) such as machine learning (ML), deep learning (DL) and generative AI (generative AI).
AI uses complex algorithms and databases to condition models to perform simple or complex tasks autonomously, modernizing and optimizing processes. Of all its functions, Generative AI stands out for use in the business context, derives from ML and DL and are all subfields of Artificial Intelligence.
In short, ML represents "algorithms that learn automatically from a set of data" (Lopes, 2024, 35.). A subset of the first, DL is "machine learning using neural networks to automatically learn from large data sets" (Lopes, 2024, 35). And lastly, generative AI (which in turn is a subset of DL) is defined by "neural networks trained on large amounts of data and capable of generating high-quality results, including text and digital images" (Lopes, 2024, 35).
And what is so fascinating about artificial intelligence?
Pedro continued to research and reflect on the various possibilities, especially considering the robust database that Eleva already had of its customers.
Generative AI represents a breakthrough in the use of artificial intelligence in business and has attracted the attention of managers around the world. The Big Book Of Generative AI (Databricks, 2024) highlights some of the main uses of generative AI in companies: employees can create specialized prompts and workflows to optimize their tasks, managers can make better decisions, profits tend to increase, and many activities can be carried out faster and more efficiently.
A clear example is Amazon, an online retail giant that sells millions of products daily. Because of the large number of product reviews they receive and the size of the team, the time it would take to analyze all of the company's data would be enormous. With AI, this task can be performed in seconds, obtaining information such as: the main reasons for complaints, the characteristics of the products praised by consumers, the level of satisfaction with the price and the product itself, and other secondary information provided by the reviews.
This simple example shows that AI can assist in Eleva's Customer Relationship Management (CRM). CRM is comprised of the organizational strategies, processes, and information technology (IT) that enable the organization to increase revenue and meet customer needs (Khan et al, 2022). Everyone knows about the importance of CRM and offering different services to the right customers at the right time.
In the case of Eleva, AI can revolutionize the way the company formulates personalized strategies for its customers. Imagine, for example, the use of chatbots (automatic messages) to track deadlines and collect feedback in real time, ensuring a more agile and effective service. In addition, artificial intelligence can accurately map processes, identify failures before they become problems, and even suggest personalized recommendations for products and services. These are just a few of the practical applications of AI in customer relationship management (CRM), creating a more efficient and satisfying experience for everyone involved.
The meeting
After studying and reflecting on the use of AI and the concepts presented above, Pedro built a SWOT matrix in order to obtain a clear vision of where the company is and where it wants to go with this innovation, identifying the internal and external levers that can drive or hinder this journey.
The SWOT matrix (Figure 1) is a strategic planning tool and presents a diagnosis of the positive (strengths and opportunities) and negative (weaknesses and threats) factors in the internal and external environment of a company.
Figure 1: SWOT Matrix
After the presentation of the analysis carried out, Magno, director of the company and Pedro's boss, questions the role of Eleva executives in the implementation of AI. That is, how he and the other directors need to act in relation to AI. He also shows concern for the company's reputation, since they have always served customers in a close and personalized way, considering the high level of knowledge of the employees and this is a strong point of Eleva. Would the implementation of AI be something that could take away this differential?
As for the role of executives, Pedro explains that it is the reflection of this leadership that allows there to be room for Artificial Intelligence, as the company's culture needs to be aligned with AI. This would be the main challenge faced in relation to Eleva's culture. It is easy to understand that it is indeed necessary to have an environment of innovation, creativity, learning, and focus on agility in processes so that there is space to implement it.
The role of top management should be to create this favorable environment; and equally important, maintain the commitment of the entire company, without hesitation or ambivalence, to prevent the organizational climate from changing. On the other hand, if this change is not natural, orderly, and controlled, it can also become a threat. The adaptation cannot be so profound as to alter and mischaracterize the company's culture, since it is responsible for the company getting where it is in the market and establishing itself as a specialist in the consulting area.
Considering Magno's concern about Eleva's reputation, the next question raised at the meeting arises from the company's strategic board and is related to the quality of the work done by AI. The council also expressed concerns about the large amount of financial resources needed to implement the new system. Promptly, Pedro points out that strategy and AI are related in a complementary way. In other words, in the same way that AI can help the company's strategy and even be part of it, strategy is required to apply it.
Implementing something like AI in a company requires investments such as the purchase of paid AI software or in the training of employees to enable them to use the tool. Thus, the best strategy is to prioritize investments in areas with the highest possibility of return. It is also useful to make a new strategic plan considering the use of AI, with new goals and expected results.
Additionally, Pedro says that AI is a tool for the company's use, but that it does not replace the ethics of human analysis and should not be used in excess so as not to reduce the quality of the work done. The lack of originality and the lack of authorship of employees when using AI's to perform their tasks could indeed be bad for the company's image, especially considering the skills and knowledge of Eleva's employees.
Next, the operations manager asks how this implementation would affect Eleva's processes at all levels, so that she could know how to act. Because it is the operational that actually makes it possible to implement anything in a company, processes are one of the most important parts of implementing AI at Eleva. Pedro clarifies that the implementation should not be done all at once. The main point is to have good communication between the areas involved in any company process. Regardless of AI, this is already important; However, as it is an innovation, it is necessary that each party knows its role and includes people, technologies and results in each process to be carried out.
In order to avoid failures in the processes, the implementation must be done gradually, starting with tests and gradually inserting the technology into the company's routine. Eleva's vast customer base provides an excellent opportunity for this type of controlled experiment. In addition, it is very important to have constant monitoring, with performance data and feedback, both from employees and stakeholders, to improve operations with more agility, reliability, and accuracy. This gradual process also allows customers to adapt to change while minimizing the impact of interactions with AI.
Finally, the IT manager raises another important point: Due to the size of the company, how to make sure that all data is correctly integrated to feed AI's? As a technology enthusiast, Pedro knows that the question is relevant, considering a computing premise: garbage in, garbage Portuguese out, or GIGO. In other words, if databases are fed with low-quality, incomplete, disconnected, and unimportant information, the result generated by AI will be equally unsatisfactory. One of the main problems at this point is to create databases that are biased and consequently biased to some type of information or idea. In a practical way, this could provide inaccurate, undesirable and harmful results for Eleva.
To complicate matters further, each sector of the company uses different sources and models of data storage. The various platforms, sources and applications of each sector, which grow and change over time in an increasingly complex way, demonstrate the importance of grouping information in the right place, always updated and organized efficiently. The correct integration of this information into a platform that serves AI is a prerequisite for successful implementation. Finally, as this technology is still under development, without clear regulation, its use must be cautious, always observing strict security parameters in relation to the data collected and its use.
The moment of truth has come
Based on the SWOT analysis developed, Pedro's explanations about the company's characteristics and the objectives set, Magno and Eleva's board of directors need to make a crucial decision: whether or not to implement AI in the company's systems to improve Customer Relationship Management (CRM).
Questions
- In addition to the aspects raised in the SWOT Analysis, what others would be relevant? Explain.
- Considering the type of company (consultancy) analyzed, would the implementation of AI really be useful? Explain.
- If you were Magno, knowing Eleva's need to improve the relationship with current customers and prospect new ones for the company's growth, what would you do about Pedro's idea? Explain.
Gallery
MAIVA - Microsoft. Demonstrative table of focus areas for the implementation of Artificial Intelligence in companies.
References
Jabbar, A., Akhtar, P., & Dani, S. (2020). Real-time big data processing for instantaneous marketing decisions: A problematization approach. Industrial Marketing Management, 90 , 558–569.
Khan, R.U., Salamzadeh, Y., Iqbal, Q., & Yang, S. (2022). The impact of customer relationship management and company reputation on customer loyalty: The mediating role of customer satisfaction. Journal of Relationship Marketing, 21 (1),1–26.
Industry Portal. (n.d). Artificial Intelligence - AI: What is artificial intelligence? https://www.portaldaindustria.com.br/industria-de-a-z/inteligencia-artificial/
Christopher, Manning (c.a 2020-2020). Artificial Intelligence definitions. Stanford University, Stanford {California}, United States of America.
National Geographic Brazil. (n.d.). Who invented Artificial Intelligence? See how one of the sensations of science was born. https://www.nationalgeographicbrasil.com/ciencia/2023/03/quem-inventou-a-inteligencia-artificial-veja-como-nasceu-uma-das-sensacoes-da-ciencia
About The Authors
Danilo Rocha de Souza is a student at the Department of Administration (ADM/FACE) at the University of Brasília (UnB). He is a scholarship holder of the UnB Extension Program (PIBEX). E-mail: danilors1999@gmail.com
Victor Rafael Rezende Celestino is a Professor at the Department of Administration and the Graduate Program in Administration (PPGA) at the University of Brasília (UnB). Degree in Aeronautical Engineering at the Technological Institute of Aeronautics (ITA), Master in Quantitative Methods (ITA), PhD in Psychology at the Catholic University of Brasília (UCB). Teaching of Operations Research and Quantitative Methods and Models for Decision Making, with application of Machine Learning, Data Science, Parallel Computing, Multivariate Statistics, Artificial Intelligence and Multidisciplinary Optimization. E-mail: vrcelestino@unb.br
Eluiza Alberto de Morais Watanabe is a Professor at the Department of Administration and the Graduate Program in Administration (PPGA) at the University of Brasília (UnB). He holds a doctorate (UnB) and a master's degree (UFMS) in Administration. Experiences in studies related to marketing and consumer behavior. Leader of the research group Conscient- Studies in Sustainable Consumption. He is a member of SCORAI Brazil - Sustainable Consumption Research, Action and Initiative in Brazil (http://scorai.org/brazil). Interest in topics related to sustainable consumption, sustainable marketing strategies and experimental designs. E-mail: eluizawatanabe@unb.br
This case was written from secondary information and based on other references cited. It is not the authors' intention to evaluate or judge the company in question. This text is intended exclusively for academic study and discussion, and its use or reproduction in any other form is prohibited. Copyright infringement will subject the offender to the penalties of Law No. 9,610/1998.