How AI can help companies in times of crisis
We selected four ways in which Artificial Intelligence can help reduce profit loss, and help your business exit the crisis even stronger than before
COVID-19 has opened a new page for many business leaders. The amplitude of this event has forced many companies to act quickly, and sometimes drastically. We all know it by now: this crisis, even in another form, may be here to stay. Hence now comes the time to go beyond the short term response, and reflect on how technology can be used to support businesses throughout these troubled times.
We selected four ways in which Artificial Intelligence can help reduce profit loss, and help your business exit the crisis even stronger than before.
AI and process automation
Currently, companies have consequent pressure to reduce operating costs. Automating paper-based processes with Artificial Intelligence is one way to reduce costs.
How does it work: AI is making it possible to automate several business operations that require extracting and encoding loads of paper documents.
Such AI-based solutions remove the cost of manual data extraction and allow employees to focus on higher-value work. As an example, our solution Fyn.ai removes the burden of invoice encoding. A machine learning document parsing software that you can scale.
Could I increase my profitability by raising the prices? Can I do so by lowering the prices? How should my pricing be updated as demand changes? As materials prices increase? Those are all questions that your company may have.
How does it work: An AI-based price optimization model helps determine the initial pricing, promotional pricing, and or discount pricing. A 1% decrease in fixed costs can produce only 2% improvement to the bottom line, and a 1% decrease in variable costs can produce a 5-8% improvement to the bottom line, compared to 8-11% improvement achieved with pricing optimization. This is so mainly because of the nature of AI price optimization models that calculate how the demand varies at different price levels, then combine the data with information on costs, and inventory levels to recommend prices that will improve profits. Discover more about price optimization with AI in our use cases.
Supply chain optimization
Even sales are not increasing, your business can still increase by reducing supply chain costs. This can include the cost of supplies themselves, the cost of shipping, storing, and retrieving them. Artificial intelligence can help in optimizing and managing every phase of the supply chain process, and consequently, reduce the costs in your company's supply chain.
How does it work: AI-based supply chain optimization can utilize a variety of factors including historical data, environmental data, and recent trends to predict optimal resource needs at each stage of production. Ultimately, Artificial Intelligence can be used to update resource plans, reroute inventory where it is needed, and streamline resource requirements to reduce downtime, reduce costs, increase production speed and increase profits from manufacturing operations.
Prevent customer churn
In times of crisis, when your marketing budget is under constraint, you want to ensure that your budget is well spent. Customer churn can become extremely expensive as the cost of acquiring a new customer can range between 5 to 25 times more than retaining an existing customer.
How does it work: Reducing customer churn can be efficiently addressed using AI. Besides predicting the likelihood of a customer churning, AI can also provide insights into the reasons why a customer is likely to churn. With such information at hand, your company will be able to improve customer experience, lower customer churn rate, optimize costs, and increase revenue.
It is unclear how long the ongoing situation will last, and what exact actions the governments will take as a response to the crisis. One thing is certain - while the wheels of the industry are slowing down, now is not the moment for the business leaders to stay unresponsive.
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