AI's Role In Driving Digital Transformation

by harnessing the combined prowess of AI and digital transformations, organisations can scale new heights of growth and profitability while creating, communicating, and delivering superior experiences to their target customers, writes Rohit Yadava

Equipped with smart algorithms, workflow automation, and superior data-driven insights, Artificial Intelligence has the transformative potential to drive digital transformations across industrial sectors.

With digital technologies becoming a mainstay of businesses, the role of artificial intelligence (AI) in driving digital transformations is becoming increasingly relevant. AI models can help develop and implement effective digital strategies. By bringing its multifaceted capabilities, including predictive modelling, scenario forecasting, and process automation, the technology can take the effectiveness of digital transformation to a whole new level.

Artificial intelligence: What is it?

As the name suggests, AI is the term that mimics the human intelligence concept in machines, tools, and technologies. With the help of smart algorithms, machine learning, and language processing models, AI can collect, process, and analyze large swaths of data and derive insightful information for effective decision-making. Thanks to its exceptional capabilities, the AI revolution today is sweeping through the business world, with many use cases of the technology appearing on the horizon every other day.

Digital Transformation: Rising on Popularity Ladder

Digital transformation entails the use of digital tools and technologies to help firms elevate operational efficiency, functional effectiveness, and business profitability. The technology perspective equips organizations with a digital-first mindset and encourages firms to embrace innovation, automation, and optimization in their business models. The applications of digital transformation are aplenty. From developing better products/services to co-creating experiences and delivering superior value, digital transformations are instrumental in helping firms explore new avenues of growth and profitability in their respective sectors.

AI and Digital Transformation: Exploring Synergistic Impact

AI and digital transformation go hand in hand, fueling the other's progress. Businesses are tapping into the potential of AI to drive digital transformation, especially in enhancing customer experiences. Businesses can improve customer satisfaction and retention using AI-powered chatbots for rapid, tailored help. For instance, Hilton's AI chatbots offer personalised customer support, while JPMorgan Chase's AI detects fraud in real time, freeing up human resources for more complex tasks.

Moreover, AI is revolutionising decision-making by analysing real-time data for patterns. For instance, JPMorgan Chase's AI fraud detection systems analyse transaction patterns, identifying suspicious activity in real time to prevent losses. AI's ability to automate processes, provide insights, and customise interactions is propelling digital transformation forward. With AI gaining accuracy from vast data, including IoT and social media, and the accessibility of AI through cloud computing and high-speed internet, businesses are poised to innovate and gain a competitive edge.

Examples of AI Driving Digital Transformation Across Industries

● Walmart implemented AI-powered demand forecasting, leading to a 20 per cent reduction in stockouts and millions saved in storage costs. This demonstrates AI's ability to analyse vast amounts of data and optimize operations for better inventory management.

● Alibaba utilises AI-powered recommendation engines, resulting in a 30 per cent increase in average order value highlighting how AI can personalise product suggestions, leading to increased customer engagement and satisfaction.

● Siemens uses AI to anticipate equipment failures in factories, preventing downtime and saving 50 per cent on maintenance costs. This showcases the power of AI in predicting future events and proactively addressing potential issues.

● UPS optimises delivery routes with AI, considering real-time traffic and weather data, resulting in 10 per cent faster delivery times and 15 per cent reduced fuel consumption.

● Starbucks uses AI-driven personalisation in their mobile app, offering customized recommendations and rewards, leading to increased customer engagement and loyalty.

By embracing AI, businesses can unlock significant value across their operations, leading to a more competitive and sustainable future.

Future of AI in Digital Transformations

AI will continue to drive digital transformation across industrial sectors including healthcare, FMCG, automobiles, and consumer durable goods. AI-led digital transformation will continue to elevate the operational efficiencies of businesses, besides giving a solid boost to creativity and innovation among the sector players. Further, the rapid advancements in explainable AI and AI-driven automation will dominate the future scenario of digital transformation and are likely to make AI-led innovations more transparent, reliable, and holistic in their turnout.

Potential Challenges

AI-driven digital transformations are the future, although many challenges need to be addressed to fully realize the potential of these new-age technologies. Ethical concerns, privacy issues, and upskilling requirements are the most pressing concerns that will continue to pose significant challenges for companies in the future. To successfully tide over these issues, firms must start investing in developing responsible AI governance frameworks, prioritising customer data with multi-factor authentication, and investing in regular reskilling/upskilling programs to keep their workforce up to speed with fast-changing technologies.


AI adoption has become a prerequisite for successfully implementing the digital transformation of business models. These transformations are the need of the hour, with organisations lagging in AI adoption and facing a serious risk of losing their businesses to rivals. On the other hand, companies that embrace AI-led digital transformation are more likely to anticipate latent needs and capitalise on opportunities with customer-centric products and services. In sum, by harnessing the combined prowess of AI and digital transformations, organisations can scale new heights of growth and profitability while creating, communicating, and delivering superior experiences to their target customers.

(Rohit Yadava is the Chief Operating Officer at MSys Technologies)

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