COMMENTARY: Explaining artificial intelligence as you chase higher profits
My favorite weekends are the ones that my grandkids spend with my wife and me. There’s nothing better than waking up early on a Saturday morning and finding them sitting in front of the TV in their pajamas, giggling at their favorite cartoons.
“Grandpa,” they say, “come watch cartoons with us!” And I do.
My grandkids love the old Looney Tunes cartoons, and on this particular morning, they were watching the “Best of Road Runner” on cable. For the better part of an hour, I drank my coffee and sat with my little ones watching Wyle E. Coyote try to catch a speeding Road Runner using dozens of hair-brained schemes that failed one after the other.
About halfway through our morning cartoon marathon, my granddaughter asked me, “How come the Coyote can’t ever catch Road Runner?”
Of course, the first answer that came to mind was, “Well, if Coyote did catch the Road Runner, it would be the end of the cartoon series.”
Other than the explanation above, why did Coyote always fail to catch his prize? Then it dawned on me. An answer that my grandkids wouldn’t understand but had some real-life logic.
Coyote was using the wrong tools to achieve the desired goal.
Sure, dynamite, bombs, rockets, anvils, even sledgehammers on the end of spring-loaded traps are capable, if not a tad over the top, ways of stopping even an insanely fast road runner. The problem with ACME’s exceptional line of mail-order explosives, anvils and other weapons of mass destruction is that they are designed to do only one thing, and do not learn from their successes and failures. They explode, they fall, and they smash, but that’s it.
Now, stay with me here, what if ACME had incorporated machine learning or artificial intelligence (AI) into those products? What if a bundle of dynamite could tell Coyote exactly when to light the fuse based on what it had learned about Road Runners’ habits? What if an anvil dropped from a certain height could calculate Road Runner’s speed and distance and be able to accelerate or decelerate its rate of descent based on those numbers? The anvil would hit its target every time! ACME products would learn from both Road Runner’s and Coyote’s successes and failures and adapt to achieve the desired goals.
Sure, the results would be catastrophic for the iconic bird, but what if you are the Coyote and your goals of higher growth and profits were the Road Runner? Those artificially intelligent tools would save you a lot of exhaustive chasing and help you avoid becoming a victim of the traps that exist in the BHPH and finance industry. Tools that have already learned from other’s failures and successes and fast track your business to success.
The retail automotive industry is very competitive for independent and BHPH dealers. We have seen many well-capitalized dealers who closed up shop or struggle day after day to see high enough profits to justify the long hours and risks that are associated with owning a dealership.
In 2020, AI and machine learning have become a reality and a necessity for businesses. Without having to spend millions of dollars, you can have access to the data you need to increase margins, mitigate risk, and perhaps to make it unnecessary to spend 12 hours a day working at your lot.
Simply put, AI and machine learning take known inputs and historical results and ensure your success time after time. For instance, if you want to improve the cash flow on your loan portfolio, modeling can look at what you are doing today and provide valuable guidance on what to do going forward. And with machine learning, the model will continuously be improving.
There are numerous companies that use AI that can help you with sales, performance, balance sheet, and income statement management, and can guide you on working smarter and making more money. Large institutions such as those on Wall Street and the U.S. government use AI, so why not you?
Find yourself a company that offers AI solutions and give them a try. You may be pleasantly surprised at the results.
Beep! Beep!
Steve Burke is the chief executive officer and founder of Agora Data, an AI infused company. Agora was founded to empower BHPH dealers with the tools necessary to run their businesses more efficiently and more profitably. Agora’s first release was an on-line loan marketplace matching buyers with sellers of loans on the secondary market. Subsequent features developed by Agora include AgoraInsights, AgoraTrade, and AgoraCapital. To learn more, go to www.agoradata.com.