According to McKinsey’s The State of AI in 2023 report, just 55% of companies have adopted AI in some form, and even fewer than one third use it for at least one business function. 

Łukasz Koczwaram, COO at the software company STX Next, says the primary area for AI implementation for business leaders could be business forecasting. 

“AI forecasting is the process of using time series data to estimate and predict future developments. It can be divided into two main categories: demand forecasting and growth forecasting,” he explained. 

According to him, leveraging AI in this domain can create an advantage over rivals. AI forecasting harnesses algorithms to predict trends devoid of human judgement. This results in reduced error rates, even when compared to scientists or experts, according to STX Next.

This is because traditional methods for data analysis rely on techniques and statistical forecasting models such as linear regression, which estimate future values based on historical data. In contrast, machine learning (ML) uses AI techniques with more complex features and methods which mitigate personal bias, adapt swiftly to changes and completely automate the forecasting process. 

“Sure, AI will not replace human intelligence in the future, but its ability to analyse data is always a welcome aid to forecasters,” continued Koczwaram.

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According to him, AI will automatically put data into the right structure and analyse it for a few minutes, which is otherwise a “tedious and time consuming process,” when performed manually. It is also able to enable more granular and dynamic forecasting, which is helpful to businesses to separate their customers, products, and markets. 

“While many companies still use traditional forecasting techniques, the reality is that these models simply cannot handle the number of business metrics and KPIs needed for effective planning,” Koczwaram said. 

“Advanced AI and ML technologies are revolutionising the way businesses make predictions and strategic decisions. By understanding how AI works in the context of business planning, organisations can harness their potential to gain a competitive edge in the market.”