Business Success With AI: How Can You Tell if Your AI Models Are Helping Your Business?

Author(s): Miguelcachosoblechero

Originally published on Towards AI.

You’ve trained your AI model, the performance metrics look promising, and your team is eager to deploy it to drive business results. But then, the crucial question arises: Will this model actually improve the way things are done? Unfortunately, celebrating a high accuracy or impressive AUC score won’t convince anyone unless those metrics translate into real business value. After all, a great model is only as good as the impact it delivers.

This question often comes up too late in many businesses. Too often, AI teams focus on generating exciting results within the data science domain, assuming that model performance alone determines success. What’s missing is a clear understanding of how those results will drive meaningful business outcomes. In this article, we’ll explore what a truly “successful AI initiative” looks like and how to frame your next AI project in a way that delivers measurable, impactful results.

”If you can’t measure it, you can’t improve it” — Peter Ducker

The pillars of AI success

To claim success in any digital initiative — AI or otherwise — you first need a clear “definition of success.” For an AI initiative, success should be measured across three essential pillars:

1. Technical Success → How does the solution perform in real-world conditions from a technical perspective?
2. User Success → How are users interacting with and benefiting from the solution?
3. Business Success → How is the initiative contributing to broader business objectives?

A truly successful AI initiative must address all three pillars. If one is lacking, at least one key stakeholder is likely to be dissatisfied. For instance, even if business metrics are improving, if users find the model frustrating or difficult to work with, you’ll likely start hearing complaints from customer support before long.

To fully appreciate why these pillars matter, let’s explore each one in more detail.

Technical Success

Technical success measures how well your AI system performs its intended task under real-world conditions.

Data Science teams are most familiar with this type of success. The process begins in a controlled and predictable setting, typically called the Development (Dev) environment. In this phase, the team must agree on a specific evaluation metric and set a clear performance target. This approach allows the team to track performance improvements across iterations and establish when a model’s performance is “good enough.”

However, a model that excels in experimentation does not guarantee it will perform well when interacting with real users. The real world is far messier than the lab environment, with external factors like data quality issues and data drift potentially undermining model performance. This is why your AI model must be tested, evaluated, and monitored in an environment that closely resembles real-world conditions. This setting provides the closest approximation to what the end user will experience. If the model’s performance in this environment deviates from expectations, it could indicate underlying problems that require further investigation.

The success of a model also depends on how responsive it is, which varies depending on the application. For instance, it’s acceptable for a medical model to “think” for a moment when providing a diagnosis from a medical image. However, you would be less patient if your phone took too long to unlock while analyzing your face. Monitoring deployment metrics like latency and throughput is crucial, as they help determine if the model delivers insights promptly and meets user expectations.

User Success

User success measures the user’s satisfaction when engaging with the outputs of your model.

But how do you measure it effectively? There are two primary ways to gauge user success: Direct and Indirect Measurements. Each method offers unique insights into how well your AI solution meets user needs, and understanding both can help you refine and optimize your product.

Direct Measurements: Going Straight to the Source

Direct measurement involves gathering feedback directly from users. This method is particularly effective when you have a small, easily engaged user base — such as internal clients or a limited number of early customers. Direct feedback provides rich, qualitative insights into how users interact with your solution and where improvements are needed.

Common approaches include user interviews and focus groups. These allow you to dive deep into user experiences, uncovering not just what users think of your product, but also how they use it in their daily workflows. However, while direct feedback is invaluable, it can be challenging to scale. Conducting interviews and focus groups is time-consuming and becomes less feasible as your user base grows. Despite this limitation, direct measurements are crucial during the early stages of development to ensure that your AI solution is aligned with user needs.

Indirect Measurements: Let Behavior Speak

Indirect measurements capture user feedback by observing how users interact with your solution. Instead of asking users for their opinions, your team analyzes their behavior to understand whether your AI initiative is driving the desired outcomes. These metrics need to be tailored to the specifics of your product, as each AI initiative impacts user behavior differently.

Typical indirect metrics include user engagement, customer retention, error rate, and support ticket reduction. For instance, if your AI tool is designed to streamline a process, decreasing user error rates or support tickets might indicate success. While indirect measurements can be scaled more easily than direct ones, they require careful selection and interpretation to ensure they accurately reflect user success in your particular context.

The Importance of Early Engagement

Regardless of which measurement method you employ, early user engagement is essential. Engaging with users at the outset allows you to gather crucial feedback, validate that your solution addresses real pain points, and iterate on your product in a lean, agile manner. Early feedback helps you identify misalignments between your AI solution and user needs, enabling you to pivot quickly and avoid investing in features that don’t add value.

In conclusion, combining direct and indirect measurements provides a comprehensive view of user success. Direct measurements offer deep insights into user experiences, while indirect measurements provide scalable metrics to track ongoing success. Together, they enable you to create AI solutions that not only work but also resonate with your users.

Business Success

Business success measures how an initiative helps the business achieve its overarching goals and strategic objectives.

Your AI initiative can be considered a success from a business standpoint if it enhances at least one of the following key areas:

• Be better — Enhancing Quality: AI can help companies improve the quality of their products or services, leading to higher customer satisfaction and loyalty. This could mean producing more reliable products, providing more accurate services, or better targeting customers with personalized marketing. Companies care about quality because it drives customer retention, positive brand reputation, and ultimately, sales growth.
• Be faster — Increasing Speed: In a fast-paced market, speed is a powerful competitive advantage. AI can accelerate business processes, reduce friction in customer experiences, and streamline operations like logistics and supply chain management. This agility allows companies to respond to market demands more quickly, launch new products faster, and adapt to changing customer needs.
• Use fewer resources — Reducing Costs: Cost efficiency is always a priority for businesses. AI can automate routine tasks, reduce the need for manual intervention, and optimize resource allocation, leading to significant cost savings. Whether it’s automating back-office operations, reducing waste in manufacturing, or optimizing marketing spend, AI helps businesses operate more efficiently while maintaining or even enhancing quality. The promise of AI to do more with less is compelling for any business looking to improve its bottom line.

Once you have identified the specific area you want to impact, it’s crucial to map this impact to measurable metrics. How does your business measure quality? What cost areas can you target? Align your initiative with the key strategic metrics used across your company. This alignment makes the impact of your AI efforts clear to the rest of the organization and also provides a straightforward way to track and demonstrate improvements over time.

Putting everything together

In summary, the success of an AI initiative hinges on three key pillars: Technical Success, User Success, and Business Success. Think of these as steps on a staircase, where each level builds upon the previous one to reach true impact. Technical success ensures the model performs well under real-world conditions, while user success measures how effectively users interact with the solution and find it valuable. Business success ties it all together by aligning AI outcomes with broader business goals, whether by improving quality, increasing speed, or reducing costs. All these metrics need to be present and working together; missing any step means risking a fall short of your ultimate goals.

Now, it’s your turn. As you plan your next AI initiative, don’t stop at just the model’s performance metrics. Instead, set clear success criteria across these three pillars. Measure, iterate, and refine until your AI solution delivers real value to both users and the business. By doing so, you’ll not only build better models but also drive tangible improvements that propel your organization forward.

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Published via Towards AI