Commoditization has been a major factor in the information technology field for many years. It doesn't really matter which computer or smartphone you use. If you want to step up to in-house use, you can easily swap databases and cloud systems based on pricing and support services. Has artificial intelligence reached that point? Opinions vary.
Commoditization occurs when a product or technology becomes widely available and interchangeable. This continues with the democratization of offerings. It also means that products and technologies no longer allow companies to ride out market battles in the same way that a properly wired electrical system would. But the company. You cannot thrive without it.
AI tools and platforms, especially generative AI, may fall under such a definition because they are now widely available and available to everyone for free or at low cost. And since everyone uses it to some degree now, it may not give you a huge competitive advantage. So, in the same way that PCs and internet access are goods that don't necessarily provide a competitive advantage, does that mean AI is on the same path? We all need it, though. , everyone has it.
Nicholas Carr, author and former editor of Harvard Business Review, identified this phenomenon 20 years ago in his seminal book “Does IT Matter?” Essentially, IT had become a “utility” that anyone could easily use. Be expected To have. With technology now affordable and available to everyone, the playing field is leveled and therefore no one gains a competitive advantage. No company gains market share as a result of having a very well wired electrical system.
“When online shopping was new to all of us, 'e-commerce' was seen as a huge differentiator for businesses,” said Brian Fitzgerald, chief revenue officer at Augury. “Today, e-commerce is the status quo and we call it shopping. I think AI will follow in a similar way. People no longer care about AI as a buzzword or a novel extension. Rather, AI-driven processes and business outcomes will become the norm.”
Scott Cook, Andrei Hagiu, and Julian Wright write in a recent Harvard Business Review article that some companies “use publicly available generative AI tools to do better or faster than their competitors. By taking advantage of it, you can gain an advantage.” “However, the benefits will only be temporary, and the use of the tool will soon become a gamble. That means you need to find it.
Counter-arguments will likely focus on the success of tech-savvy organizations like Amazon and Uber, which have used cutting-edge technologies, including AI, to upend their markets. AI and Generative There is no denying that the potential for AI to advance the business landscape is exciting. “Generative AI has the potential to disrupt or even commoditize many businesses by making it much easier and cheaper to improve and create products and services that previously required significant effort and creativity.” ” says the HBR author.
But now the whole world has access to that technology. A company's advantage comes from an innovative culture and forward thinking. It's not just that they have the technology, it's what they do with it. Anyone with a high-end smartphone can now make a movie, but not everyone has the vision or skills to become the next Steven Spielberg or Spike Lee.
AI “will deliver results when treated as a tool to improve a company's bottom line, but it will be less profitable when viewed as a stand-alone, shiny new product,” Fitzgerald said. “For example, when analyzing the ROI of AI, you don't just look at AI, you need to work backwards to understand what business functions AI is contributing to and analyze the impact from there. there is.”
For now, “current generative AI efforts remain focused on efficiency, productivity, and cost reduction rather than innovation and growth,” a recent report from Deloitte suggests. The majority of organizations surveyed are currently targeting tactical benefits such as increased efficiency and productivity (56%) and cost reductions (35%). Additionally, 91% said they expect generative AI to improve productivity in their organizations. Fewer organizations (29%) report targeting strategic benefits such as innovation and growth
This will have implications as AI begins to be taken for granted. “People aren't looking at the internet or looking at their smartphones and marveling, but these technologies are completely changing our productivity,” says Cohere co-founder Nick Frosst.
“AI will increasingly transform business without us even realizing it,” Frost continues. AI “will more easily find critical information from vast databases, identify trends that might otherwise be missed, quickly complete mundane tasks and free up employees to specialize in other areas.” We need to help them deploy knowledge better.'' It won't make us super artificial intelligence, but it will change everything. Most people will stop thinking about AI because it will fundamentally change the way business is done. ”
Cliff Jurkiewicz, vice president of strategy at Phenom, says that AI is “already invisible in many ways today. AI is like oxygen. Content is all around us. Deliver value in ways we take for granted every day, such as suggesting streaming services, updating package delivery status, and offering alternative routes based on traffic and other road hazards. It is also used in the medical field to effectively diagnose cancer.
Not everyone agrees that AI will soon disappear from view or become commoditized. “The initial hype created by the release of ChatGPT will definitely start to die down,” said Robin Moore, his principal product manager for AI and machine learning at Mimecast. More will become clear. ”
If anything, just talk about implementing AI by providing a competitive advantage, at least initially. “Many companies will be in a hurry to highlight how they are leveraging AI for several reasons. , to show that you're on the cutting edge of providing better services and products,” says Moore. We are communicating to our boards and shareholders that we are using AI to significantly improve the productivity of our business. ”