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What is AI: Definition, How it Works, and Its Application in Business

24 January 2022

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What is AI? Lately, the word AI or artificial intelligence is increasingly being discussed. Mentioned, AI has many benefits that can facilitate human tasks, including in terms of managing a business. To help you understand what AI is and how it can be applied in business, let's take a look at the following review!

Get acquainted with what AI is
AI itself stands for artificial intelligence. Literally, AI means artificial intelligence. Basically, AI is a computer system developed in such a way that it can have human-like intelligence. Just like humans, the intelligence possessed by AI is also obtained from a learning process.

However, the AI ​​learning process is different from humans. AI learns by gathering as much information as possible. Systems embedded in AI then filter and process that information until it can finally be used. Broadly speaking, AI has three basic capabilities, namely learning, reasoning, and self-correction.

Understand how AI works
After knowing what AI is, let's also understand how it works. The way AI works starts with collecting data. After that, the algorithm embedded in the AI ​​will filter and process the data set. That way, AI can also get new information.

For example, you want to create an AI that can provide food recommendations according to weather conditions. For AI to work, you have to enter data about different types of food. Later, AI will group the food data into these weather conditions. So, when users enter certain weather conditions, they can immediately get food recommendations.

Examples of applying AI in business
The application of AI in everyday life is so broad, you can even apply it when managing a business. The points below will explain some examples of applying AI in business:

- Providing product recommendations on e-commerce websites
The wide choice of products makes it easy. However, if it is too diverse, customers will feel confused about making a choice. At times like this, providing recommendations can be a solution.

Well, you can use AI to provide product recommendations to customers. AI will learn customer tastes from products they have purchased or seen before. From there, AI can offer similar or related products.

- Chatbot to serve customers for 24 hours
A chatbot is software specially designed to be able to reply to chats from customers automatically. Interestingly, chatbots offer similar interactions to humans.

This can happen because AI collects data in the form of frequently asked questions by customers and their responses. AI also stores keywords or keywords in the system. So, when these keywords appear in customer questions, AI can immediately find the answers.

If you often feel overwhelmed by customer inquiries, chatbots can be an efficient solution. VADS Indonesia offers a Smart Outreach service in the form of a chatbot that can be tailored to your needs. Click here for service details!

- Inventory monitoring to monitor the stock of goods
As the business grows, monitoring inventory manually will obviously be very time-consuming. As a solution, you can take advantage of the help of AI. With AI, tracking raw materials becomes easier. In addition, AI can also manage backorder sales from suppliers to carry out stock inventories automatically.

- Automation of employee recruitment process
Another example of the application of AI is the automation of the employee recruitment process. Utilizing AI, you can sort your apps according to your company's needs. If there are unsuitable criteria, AI will automatically reject the application immediately. This method is very efficient, both in terms of time and cost.

- Predict future trends
By gathering appropriate data, AI can also predict future business trends. You simply provide data about business trends in previous years, consumer behavior, market demand, and stock of raw materials, then AI will immediately process it into predicting trends in the future.

Hopefully, this review can answer the question of what AI is along with examples of AI applications in business. If you want to immediately take advantage of AI to help manage your business, VADS Indonesia provides several services that have been supported by AI technology such as chatbots. For more information, email 

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