A PERSPECTIVE ON THE CONTRIBUTION OF ARTIFICIAL INTELLIGENCE IN SUPPORTING STRATEGY DEVELOPMENT

1       Purpose of the Research This paper addresses how organisations can and need to consider the potential role of Artificial Intelligence (AI) in supporting strategy development going forward if they are to survive... [ view full abstract ]

1       Purpose of the Research

This paper addresses how organisations can and need to consider the potential role of Artificial Intelligence (AI) in supporting strategy development going forward if they are to survive and prosper in the exciting and unpredictable ‘Information Age’. The underlying aim is centred on understanding how state-of-the-art technologies (i.e. artificial intelligence) can be used to transform businesses into data-driven organisations and thus allowing them to avail of the benefits associated with advanced analytical capabilities.

1.1      Research Question

What is the potential role of Artificial Intelligence in supporting strategy development?

1.2      Research Objectives

Objective 1: To understand the AI capabilities that exist within a Global Technology Company and to investigate if/where these capabilities are being used.

Objective 2: To examine the potential role and suitability of AI as a support mechanism for strategy development

Objective 3: To determine the potential benefits and challenges associated with incorporating AI into the strategy development function within organisations.

Objective 4: To examine the role of Strategists today and how their roles may need evolve in an AI informed world.

2       Research Methodology

The methodology chosen for this research paper was qualitative in nature, a Case Study situated within a Global Technology Company (GTO). Semi-structured interviews comprising of open-ended questions were chosen to capture the required information. A total of 5 interviews were conducted with senior personnel within the research company who have experience in strategy development and whom also have exposure to AI offerings within the company. Interview questions were designed based on themes which emerged during a literature review on AI technology and Strategy development. These themes and the related interview questions are summarised below.

Theme 1: AI & Sensing (External Environment)

1. What kind of inputs would AI need in order to develop a scanning/sensing capability?
2. Is there a commercial opportunity in your opinion for AI as a strategy development offering?

Theme 2: AI in the Support of Internal Operations (Internal Environment)

1. What kind of investments are necessary to develop and build an AI capability for strategy development?
2. Do you think AI could or should play a strategic role with the senior executive team or sit on the executive board?
3. What is the internal scope to support daily operations and better strategic judgement?

Theme 3: AI in Strategy Development

1. Is AI currently an input into strategy development?
2. What are the potential benefits from building an AI capability around strategy development?
3. Do you know of any examples of how AI might have played a role in strategy development to date, either at a corporate or business-unit level?

Theme 4: AI and the Role of Strategists

1. What is the role for strategists in an AI informed world?
2. What are the opportunities for strategists and AI to work together?

3       Findings

Following fruitful discussions with experts in the Strategy and AI area within the GTO, the Author extrapolated the following key findings:

• The potential Use Cases for AI within the strategy development function
• The potential benefits of incorporating AI into the strategy development function
• The potential challenges to consider when incorporating AI into the strategy function

3.1     The potential Use Cases for AI capabilities within the Strategy Development Function

As illustrated in Figure 1 (attached), six potential Use Cases were identified during the expert interviews as candidates for AI integration within the strategy function.

3.2      Potential Benefits of incorporating AI into the Strategy Development Function

During the interviews, each of the experts were asked to share their thoughts on what benefits they think an organisation could expect when incorporating AI into the strategy development function. Table 1 (attached) documents these high-level benefits as well as providing examples of each.

3.3      Potential challenges for incorporating AI capabilities into the Strategy Development Function

Potential challenges that an organisation may encounter when incorporating AI into the strategy development function were also discussed during the expert interviews. Table 2 (attached) documents these challenges and explains, as per the experts, why each is a challenge in this context.

4       Practical Implications

On completion of this research project, there is a clear sense from both the literature on AI and discussions with strategy experts that AI capabilities as they exist today are not advanced enough yet to provide the level of value that many would have expected within the strategy function. Having said that, there is a consensus out there that the era of AI computing is only beginning to gain traction and many believe there is still real hope and excitement within the AI community that AI capabilities will eventually advance to meet all our expectations to live a more fulfilled and promising life.

The key findings within this paper outline potential Use Cases based on expert opinions where AI could be incorporated into the strategy function, as well as providing expert assumptions on the value generation an organisation could hope to achieve from doing so. By incorporating these findings sooner rather than later and working from the ground up to migrate processes to AI where possible, the Author believes this will give organisations the opportunity later on as AI advances to begin to bundle the various AI driven processes together to create work flows of great value.

 5       Social Implications

Initial findings, certainly as they relate to AI job displacement, have no immediate consequences in the area of Strategy and Technology. Furthermore, the study revealed that the challenge will reside in humans and machine working conjointly to lead on the development of AI technologies as these relate to strategy development. The main implication is that human judgement will continue to be of primary importance not only in relation to AI and Strategy but largely in terms of AI development overall. Ultimately, strategic direction and organisational performance rests firmly in the hands of those responsible for strategy development and implementation. 

5       Originality / Value

This research project has shown that AI does have a role to play in the strategy development function within organisations. The Author drew on a combination of scholarly and practice based literature to form the basis for the primary research. The literature covered strongly suggests that AI in relation to strategy is much further down the road than what the findings of this project suggests. The findings of this research project suggest that AI can add value to the strategy function but primarily at the work flow level through the full or part replacement of manual activities which humans do on a daily basis. In contrast to what the literature suggests, the findings of this project suggest that AI capabilities are not advanced enough yet to add value at the hypothesis level where deep thinking, reasoning and selective activity is critical.

The Author believes AI will eventually advance to a point whereby it is extremely valuable to organisations but also believes that the hype around AI today is over selling its potential in the short-to-medium term. The Author predicts that another 5 to 10 years of R&D in the AI and strategy space is required before AI can truly deliver on the value that many of us hope for.