Using AI to reduce costs

Talk of artificial intelligence is everywhere. Companies are adopting AI at breakneck speeds for its many advantages, but one of the biggest benefits comes from AI’s power to reduce costs.

No matter the type or size of your business, AI can boost your income, trim expenses, and deliver a strong ROI. According toChet Kapoor, CEO of DataStax, those savings are a great opportunity for leaders. “You will have a lot more room to either give back money to shareholders, which I think is a phenomenal idea or continue to innovate so that you can actually continue to serve your customers, the people who use your product and people who buy your product.”

Here are five areas where AI can reduce costs:

1. Supply Chain Management

A recent survey fromMcKinsey found that 41% of companies that implemented supply chain-focused AI solutions saw a cost reduction of 10–19%. Pandemic-era supply chain challenges showed the impact logistics have on the bottom line. When companies can't get the materials they need on time, they lose sales and have to potentially spend more on backup products. AI can quickly calculate the most efficient route to gather supplies and send shipments, taking the guesswork out of logistics. AI can also help companies find strong supply chain partners and identify areas for improvement. That allows companies to gather supplies more quickly and expand their sales potential without wasting money on inefficient partnerships or routes.

2. Sales and Marketing

Generative AI can analyze customer data to find trends and similarities and divide customers into different personas. Companies can then use that information to create targeted marketing campaigns that are more personalized and effective than a general, mass-market effort. AI can also boost video, image, and written marketing copy to create cohesive branding. On the sales side, AI provides customer insights to help sales reps build connections with leads. AI can also distill product information so sales teams can easily answer customers’ questions — helping earn more sales.

3. Research and Development

Research and development is crucial to keeping companies relevant, but it can be a costly and time-consuming process. Instead of testing new products and ideas by hand, AI allows teams to run simulations virtually and experiment with a product's design and function before creating it physically. These improvements allow companies to detect potential errors before going into production and create higher-quality products faster and at a lower cost.

4. Manufacturing

Automation and robotics transform manufacturing so companies can create products more quickly. Compared to humans, robots can deliver faster, more accurate work at a fraction of the cost. AI can discover the most efficient ways to manufacture products and get the most use from materials, reducing the cost of waste. That improvement frees the human employees to work on more creative tasks to grow the company in other ways.

5. Human Resources

AI can streamline people-related processes and take over repetitive tasks like data entry. AI can also sort through huge amounts of employee data to highlight patterns and provide insights about everything from employee engagement to how long people stay at the company and when they come to work. Those insights can help the company create a more engaging culture to retain employees and provide benefits that connect with people. AI can also sort through job applications and identify candidates to interview who are likely to do well in the role.