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Predictive Analytics: How AI Can Help Businesses Make Informed Decisions

Artificial Intelligence (AI) is a technological advancement that has revolutionized the business world. Statistics show that 37% of firms and organizations utilize AI in their operations. The technology is applicable in the healthcare, hospitality, finance, security, and transportation industries.

The most invaluable application of AI in business is the decision-making process. Although machines cannot make decisions alone, they assist leaders to make accurate choices. The use of AI in predictive analytics prepares businesses to deal with future issues.

In this article, we will define predictive analysis and discuss ways AI can help businesses in decisions making. Also, we will provide the limitations of using AI technology in the decision-making process. Lastly, offer a case study to show how AI technology endangers businesses.

Let’s dive in.

What Is Predictive Analytics?

The ability to foresee the future is essential for companies as it helps them make informed decisions. According to Investopedia, predictive analytics is the application of statistics and modeling methods to predict future performance and outcomes. Knowing what might happen in the future allows business leaders to focus resources on areas that will give them a competitive advantage. For example, a company may use predictive analytics to decide whether to increase or decrease the production of specific items.

Nowadays, AI has simplified predictive analytics by examining massive data sets and offering future predictions. For instance, businesses use AI predictive analytic tools to determine to set the prices of their products or services. For this reason, artificial intelligence is an essential tool for predictive analytics for companies.

Ways AI Can Assist Firms in Decision Making

Business leaders must make informed decisions to enhance their organization’s future success. However, humans find it difficult to make future predictions from the limited data available. Let’s explore how machine learning and AI can help decision-making.


A pricing strategy determines whether or not a business will succeed in a competitive market. A firm’s pricing strategy must consider trade margins, input costs, market conditions, and competitor actions.

The process of deciding on a pricing strategy can be hectic for business leaders because of the many parameters involved. AI is the perfect answer for forming a pricing strategy that will guarantee success for the business. AI creates a pricing strategy by analyzing data on consumer behaviors, market demand, and competitor actions.

Unlike humans, AI tools never get tired while scrutinizing information that helps in generating a pricing strategy. For this reason, a company can make an informed decision on the pricing strategy through the help of AI.

Opinion Mining

Nothing is more important than customer feedback in the business decision-making process. Customer reviews enable companies to understand how to improve their products or services. Nevertheless, you cannot read all the comments and reviews on social media to aid in decision-making.

AI intelligence is available 24/7 to read and analyze all customer opinions from all social media platforms. The technology can break down the comments for you to show the most pressing concern for customers. Hence, AI helps firms to gain insight into what clients feel about their products or services and decide on the necessary improvements.

Marketing Decision-Making

Advertising is the backbone of any organization because it informs consumers about the existence of a brand. Marketing decision-making is complicated in an ever-changing commercial world. The marketing teams find it hectic to determine customer demands and create products that satisfy those needs.

Businesses have turned to AI-enabled algorithms to track client data associated with their surfing history. For instance, a movie streaming site can recommend the next film to a consumer by checking their online activity using AI tools. Thus, AI helps firms to generate effective marketing choices.

Moreover, AI predictive analytics enables a business to utilize marketing resources correctly. AI tools can help advertising managers determine the most appropriate marketing campaigns for various customers. A firm uses resources on advertising efforts that bring a return on investors courtesy of AI predictive analytics.


The challenges facing a business can be complicated for the human mind. AI tools that imitate the human brain can use their problem-solving ability to help a business in decision-making. For example, an AI diagnostic tool in a hospital can help a doctor identify a patient’s disease. AI in problem-solving skills and human thinking can enhance efficiency in the business decision-making process.

Limitations of AI in Business Decision Making


Creating a machine that can replace humans can be costly for businesses. The AI engineers team may require time to create algorithms to perform desired tasks. It will cost a significant amount to pay AI engineers.

Furthermore, the AI software and hardware must stay updated for optimal functionality. Updating AI hardware and software is expensive for businesses. Therefore, a small or medium enterprise may afford to use AI in decision-making.

No Innovativeness

In an ever-changing universe, companies have to remain innovative to stay competitive. AI machines lack the innovativeness that humans can deliver since they rely on pre-fed and historical data to solve problems. For example, an AI tool such as ChatGPT can write a recommendation based on existing facts, but it may not offer an innovative solution. For this reason, businesses concentrating on AI for decision-making may not succeed because of a lack of innovation.

Case Study

A case where criminals impersonated the CEO of the parent company of a U.K based energy firm is among the most famous cases of AI fraud. The criminals used artificial intelligence to mask their voices so that it was similar to that of the CEO. The criminals directed the energy company’s CEO to transfer $243,000 to a Hungarian supplier.

The CEO of the energy firm obeyed the commands thinking he was getting them from his boss. Later, it was discovered the fraudster used AI technology to change their voice so that it sounded like that of the chief executive of the parent company. The case is an illustration of how AI technology in the wrong hands can be damaging to businesses.

Final Thoughts

Artificial intelligence is the magic that has transformed many businesses into successful enterprises. The technology helps firms to create a pricing strategy, mine opinions, make marketing decisions, and solve problems. Nonetheless, AI technology could make people lazy, lower innovativeness, and increase operational costs for a business.

The technology may lead to the collapse of a business because of huge losses if used by fraudsters. For this reason, organizations should employ AI technology with caution for maximum benefits.

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