Artificial Intelligence (AI) has become a hot topic in recent years, with tools like ChatGPT making headlines and sparking conversations. However, AI’s impact on the workplace goes far beyond chatbots. It is poised to be the driving force behind transformative change and a significant source of business advantage in the years to come. So, what exactly is AI, and how does it affect organizations? Let’s dive in.

AI, in its broadest sense, refers to a science and a set of computational technologies inspired by human sensory and cognitive abilities [18]. From predicting the shortest route to processing images or video, AI has the power to make accurate predictions, provide personalized services, and generate content based on previous data. It surpasses human capabilities in many aspects, offering speed, cost-effectiveness, and replicability (though not without its challenges).

Why is the use of AI in organisations relevant?

Besides the abundant anecdotes about firms using different AI systems with different goals, which creates hype and momentum and makes others want to join this technological wave, the relevance of implementing AI or human-AI collaboration within an organisation relates to important factors:

• Business performance: Companies leveraging AI in their operations or services have reported higher revenue, operational performance, and productivity [7; 22]. For instance, a 2021 study that interviewed more than 30,000 workers of manufacturing companies in the US found that companies that used predictive analytics reported significantly higher turnover than similar competitors [22]. And this year, the most recent AI Index report by Stanford University highlighted that “Organizations that have adopted AI report realizing meaningful cost decreases and revenue increases” [15]
• Well-being and job satisfaction: The incorporation of AI in the workplace can have both positive and negative effects on employees. On the positive side, AI reduces repetitive tasks, improves work-life balance, provides personalized guidance and feedback, and optimizes environmental factors [2; 21]. However, the introduction of AI tools has also been associated with job insecurity, raising concerns among workers about potential job losses [16] (and that was before we saw the capabilities of current AI chatbots and image generators!).
• Innovation: Companies embracing AI demonstrate stronger capabilities to innovate and adapt to changing environments [21]. By automating research and development processes, identifying new opportunities, and supporting product design, AI fosters increased innovation and competitiveness [9]
• Challenges: Besides the above, the introduction of AI to companies has brought several additional challenges to the already-changing landscape. These challenges can be ethical, regarding privacy and use of the data needed to train AI models, and how to introduce this technology in a firm in a way that considers the needs and worries of stakeholders like employees and communities; technical as companies will require not only the talent but also the infrastructure to develop and operate complex AI systems; organisational as the roles, tasks and way of working change are must evolve under a new benchmark; and of course strategical, as not only products and services will evolve but also incumbents with new capabilities.

These drivers have led to a growing focus on understanding, developing, and implementing AI in organizations. According to a 2023 report by Stanford University, 50% of the 1,400 surveyed workers said their organisations have adopted AI in at least one function [15].

But now, more specifically, how does AI affect the organisation? keep reading here.