Can we use AI in Operational Due Diligence?
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AI has certainly been picking up in our modern society. Can AI unpack and identify any operational bottlenecks, potential synergies, and areas for improvement?
Disclaimer: I am not an AI expert and have very little experience with AI. AI as it relates to Due Diligence is a very interesting topic. To your direct question about can AI help assess bottlenecks, synergies and areas for improvement? My first instinct is that AI would not be directly helpful in that assessment unless your company already uses data models to make that assessment. AI requires inputs, data models or examples to learn from before it can produce results. That said, AI could help summarize data to help the user better assess or pinpoint potential areas of synergies or improvements. And maybe over time the proper models/examples can be built which will make the AI assessment more powerful in the future. However in general, I believe that AI can assist in other areas of Due Diligence such as summarizing key contracts, company literature and other documentation. This could save time and by allowing your DD team to review the summaries and then focus their diligence on key documents or red flag items.
In my opinion, AI has indeed become increasingly adept at identifying operational bottlenecks, potential synergies, and areas for improvement across various industries. By analyzing vast amounts of data and detecting patterns, AI algorithms are capable of uncovering inefficiencies, streamlining processes, and optimizing performance in ways that may not be immediately apparent to most humans.
For now there is no specific systems to manage M&A so the AI would have to be trained ad hoc on some large sample of data before to be able to provide any significant inputs for M&A. At this stage, it would not be a recommendation to use such tools.
Yes. You use any situation and any type of needs. because the AI will be provide any type of solution.
From my opinion, the AI could be very useful but the information available to it has to be robust and realistic. If the data used by the AI to develop that analysis is only the public one that is on websites or the companies webpages it will be unrealistic, and maybe you can miss some synergies or making decisions with a not reliable information. Obviously it can be helpful to settle the path to be follow, but your competitors will do it as well…
I think that the company that comes out with a product that performs a heavy lifting for the DD for you will do very well.
AI can be used as a tool to help with certain parts of Due Diligence, but it can never capture what meeting with other people provides, especially when doing the cultural analysis.
I’m sure there are ways to help speed up calculations and certain data analysis, but I don’t think it can ever be a complete substitute.
Not an expert in any way. I also teach University some and AI is becomeing a powerful tool. I would say the same here I do with my students.. it’s a good start, but validate, validate, validate. There may be a time where someone may design a system that can data mine all the information and create the assumptions. But again, I am old school still needs a pair of eyes to review.
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