AI Agents Applications: What they can and cannot do for a Business?

AI agents are changing how businesses operate, offering unprecedented opportunities for efficiency, scalability, and innovation. Major AI business organisations like Meta, Google, etc are rapidly implementing these AI agents into their workflows, while emerging players like CrewAI and LangChain are spearheading the agentic AI movement to create robust autonomous systems. Despite their revolutionary potential, AI agents also have inherent limitations that businesses must navigate strategically. In this article, we will delve into the capabilities and constraints of AI agents from a business perspective, exploring their applications, benefits, and limitations.

What are AI Agents?

AI agents are autonomous systems designed to perform tasks, make decisions, and learn from data. These agents use Large Language Models to simulate human-like problem-solving and decision-making processes based on the environment. Examples include:

• Email Responder Agent that Automatically Replies to Emails,
• Personalised Newsletter Digest, etc

Key characteristics of AI Agents include:

• Autonomy: This is the key characteristic that excites the AI community; the ability to perform tasks without human intervention or minimal human intervention.
• Adaptability: Post-implementing, LLM-powered agents have the ability to learn and improve performance over time, thus helping businesses thrive.
• Interactivity: Engaging with users or other systems through natural language or APIs.
• Scalability: Handling vast amounts of data and operations simultaneously.

These characteristics make it a must for businesses to adapt AI agents just to remain competent for various applications. But which business applications can leverage AI agents? Let’s have a look at them.

What AI Agents can do for a Business?

Automate Routine Tasks

This is perhaps the most talked about use case of AI agents for a business. With the potential it holds for increased productivity, no wonder why there is an unprecedented buzz around AI agents. Businesses can use AI agents to automate repetitive tasks like data entry, invoice processing, report generation, labelling/sorting/replying to emails, research, etc. All you need to do is ensure your agents are supported by the right set of tools and information.

Enhance Customer Service

AI agents can be extensively used in customer service to handle inquiries, resolve complaints, and provide support. AI agents are already being implemented across many businesses globally. Agentic Chatbots, for example, can operate 24/7, respond instantly to queries, and reduce wait times. According to a report by Gartner, by 2025, AI-driven chatbots will handle 85% of customer interactions, reducing operational costs by up to 30%.

Optimize Operations

Optimising operations with AI agents is an absolute win for any business! Google CEO Sundar Pichai recently said, over 25% of new code is written by AI. AI agents also revolutionise supply chains by automating tasks like demand forecasting, inventory management, and logistics, leveraging real-time data for efficiency, cost reduction, and agility. DHL leverages AI to optimise delivery routes, cutting transit times by 30%. Amazon uses AI-guided robots for faster, error-free warehouse operations, boosting fulfilment speed by 50%. UPS’s ORION system saves 10 million gallons of fuel annually by optimising delivery routes and reducing CO2 emissions.

Enable Personalization at Scale

Another business use case of AI agents is to enhance personalisation by delivering real-time assistance, improving customer satisfaction and enabling informed decision-making through actionable insights. In finance, they monitor markets, predict trends, and ensure compliance, while in healthcare, they detect anomalies, alert providers, and streamline workflows. Companies like Microsoft, Oracle, and NVIDIA are advancing healthcare AI agents, showcasing their potential to improve patient care and operational efficiency by processing vast data for precise, instant recommendations.

These use cases make AI agents look like a perfect tool for businesses to reap benefits from. But it’s far from perfection in its current form. Let’s explore the limitations of AI agents from a business perspective.

What AI Agents cannot do for a Business?

1. Exhibit True Creativity: While AI agents can generate content, designs, or solutions based on patterns in data, they lack genuine creativity and originality. The emotions, intuition, and abstract thinking involved in human creativity are missing and cannot be replicated by AI.
2. Understand Context Beyond Data: AI agents often struggle with understanding nuanced contexts or cultural sensitivities. For example, chatbots may misinterpret ambiguous language or fail to recognise sarcasm, leading to unsatisfactory user experiences.
3. Operate Without Quality Data: AI agents are heavily dependent on data for training and decision-making. Poor-quality or biased data can lead to flawed outcomes. A prominent example of this is where the biased AI system produces discriminatory outputs.
4. Replace Human Judgment in Complex Scenarios: In situations requiring ethical considerations or emotional intelligence, AI agents fall short. For example, decisions related to layoffs, customer disputes, or crisis management require human empathy and judgment.
5. Function Without Oversight: AI agents require monitoring and fine-tuning to remain effective. Without human oversight, they can drift, making errors or reinforcing biases over time. It is fair to say we are far away from building a 100% autonomous system.

Challenges in Implementing AI Agents for a Business

Costs

Developing and implementing AI agents in a business demands substantial financial investment, making it a significant challenge for small and medium-sized enterprises (SMEs). The process involves acquiring high-quality data, training sophisticated models, and integrating various systems, all of which contribute to high costs. To effectively reason, plan, and solve problems for users, AI agents require advanced models capable of managing complex tasks. They must deliver low-latency performance, integrate smoothly with tools like web browsers, and leverage extensive memory to provide personalised and efficient services. These requirements make development and deployment both resource-intensive and expensive.

Data Availability and Privacy Concerns

The application of AI agents for a business depends on access to detailed data about task execution, including the sequence of actions and the reasoning behind them. While gathering data for routine tasks, such as processing customer orders, may be relatively straightforward, finding sufficient and high-quality data for more complex or nuanced tasks can be challenging. Additionally, the use of AI agents brings significant concerns regarding data security and privacy. Businesses must navigate strict compliance requirements under regulations like GDPR and CCPA to ensure data protection and avoid potential legal and financial penalties.

Integration Complexities

Integrating AI agents into existing systems and workflows poses significant challenges for businesses. Compatibility issues with legacy systems often necessitate extensive customisation, requiring additional time, resources, and technical expertise. Furthermore, aligning AI agents with organisational processes may involve overhauling infrastructure, training staff, and addressing potential disruptions to ensure seamless functionality and optimal performance.

Skill Gap

The lack of skilled professionals to design, implement, and manage AI systems for businesses remains a major obstacle. According to IBM, there will be a 50% talent gap. This shortage hinders the development and deployment of AI solutions, limiting their adoption and slowing innovation across industries.47% of businesses report difficulty finding AI talent.

Also Read: The Effect of AI Agents on the Job Market in 2025

Best Practices for Leveraging AI Agents in Business

Start Small

Initiate AI adoption with pilot projects that address specific, manageable challenges within the organisation. These smaller-scale AI agent implementations help a business test the feasibility, usability, and effectiveness of AI agents while minimising risks and costs. Pilot projects also generate valuable insights, enabling businesses to identify potential pitfalls and fine-tune strategies before scaling solutions. Industry veterans emphasise the importance of iterative testing and feedback to build confidence in AI-driven processes.

Focus on Data Quality

High-quality data is the foundation of effective AI systems. Businesses should prioritise investing in robust data cleaning, management, and governance practices to ensure the accuracy and fairness of training data. Regular audits and tools for detecting biases are essential for reliable AI outcomes. Experts highlight that organisations leveraging clean and representative datasets significantly enhance their AI models’ performance and mitigate risks of erroneous or biased outputs.

Ensure Human Oversight

Even though autonomy is the main selling point for AI agents, it is still at a nascent stage. This makes human oversight critical to maintaining accountability in agentic systems. Establish clear protocols for monitoring AI agents to quickly identify and rectify errors, biases, or unintended consequences. This includes activities like setting up cross-functional teams for reviewing outputs and adopting explainable AI frameworks to ensure transparency. Some even suggest placing ethical review boards to ensure fair usage of this technology.

Prioritize Ethics and Transparency

Ethical AI practices are essential for fostering trust. It helps ensure innovation goes hand in hand with responsibility. Businesses should be transparent and, openly share methodologies and accountability measures with stakeholders. Leading industry voices stress that prioritising ethics not only mitigates risks but also enhances brand reputation.

Foster a Culture of Innovation

Companies are made up of individual employees. Hence, creating a culture that embraces individuals to adopt AI is key to company-wide adoption of AI. Ensure your company provides enough resources and compensation for its employees to upskill, which it can in turn use in their respective jobs. Industry experts recommend leadership buy-in and mentorship programs to inspire teams and ensure alignment with strategic objectives, driving long-term success in AI initiatives.

Conclusion

Applications of AI agents represent a transformative force for businesses, offering unparalleled opportunities for automation, personalisation, and operational efficiency. However, they are not without challenges, including costs, data quality concerns, integration complexities, and the need for human oversight. By starting small, focusing on ethical practices, and fostering a culture of innovation, businesses can strategically leverage AI agents to drive growth and remain competitive. While AI agents cannot replace human creativity or judgment, their capabilities continue to evolve, making them an invaluable asset when implemented thoughtfully and responsibly in today’s dynamic business landscape.

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Abhiraj Suresh

My name is Abhiraj. I am currently a manager for the Instruction Design team at Analytics Vidhya. My interests include badminton, voracious reading, and meeting new people. On a daily basis I love learning new things and spreading my knowledge.