AI Product Development
Building AI-enabled products and services
A practical guide to developing products and services that use AI to create value for customers and businesses.
AI product development is about creating products, services or features that use artificial intelligence to solve a problem, improve an existing offering or create a new commercial opportunity.
It is not simply about building an AI application.
Good AI product development connects the customer problem with the right AI capabilities, technology, data and product experience. It considers what should be built, who it is for, how it will work and whether it can create sustainable value.
What is AI product development?
AI product development is the process of designing, building and bringing to market a product or service that uses artificial intelligence.
This could involve:
- Building a new AI-powered product
- Adding AI features to an existing product
- Developing an AI assistant or copilot
- Creating an AI agent
- Building an AI-powered SaaS product
- Using AI to automate part of a service
- Developing predictive or recommendation capabilities
- Using proprietary data to create a new AI-enabled service
- Turning an existing AI capability into a commercial product
The type of AI used will depend on the product and the problem being solved.
It could include generative AI, machine learning, natural language processing, computer vision, predictive analytics or AI agents.
The starting point should generally be the customer or business problem rather than the technology.
Why do businesses need AI product development?
AI is creating opportunities to develop products and services that were previously difficult or expensive to deliver.
Businesses can use AI to:
- Create new products
- Improve existing products
- Personalise customer experiences
- Automate complex processes
- Analyse large amounts of information
- Provide intelligent recommendations
- Create new services
- Improve productivity
- Turn data into commercial value
However, an AI capability does not automatically make a good product.
A technically impressive AI application may still struggle if it does not solve an important problem, provide a clear benefit or have a viable commercial model.
AI product development therefore needs to connect technology with product and business objectives.
Looking at AI as part of a wider business change? Explore AI Transformation.
What should AI product development include?
There is no single approach that works for every AI product.
The right development process depends on the product, customers, technology, data, industry and commercial objectives.
A comprehensive AI product development process will typically consider:
The customer problem
What problem is the product solving?
Who experiences the problem and how is it currently being addressed?
Understanding the problem helps determine whether AI is actually the right solution.
The product proposition
What will the product do and why will customers use it?
The proposition should explain the value of the product in terms that customers understand rather than simply describing the underlying AI technology.
AI capabilities
What role will AI play in the product?
This could include:
- Generative AI
- AI agents
- Predictive analytics
- Recommendation engines
- Natural language processing
- Computer vision
- Intelligent automation
- Machine learning
The appropriate technology depends on the product requirement.
Data
Many AI products depend on data.
Development may therefore need to consider:
- What data is available
- Data quality
- Data ownership
- Data security
- Data architecture
- How data will be accessed
- Whether additional data is required
Technology
The product may need to integrate AI models with existing applications, cloud platforms, databases, APIs and other systems.
The technology approach should support the product rather than determine it.
Need broader technology expertise? Explore Technology Consultants.
User experience
AI can change the way people interact with software.
The product may need to consider conversational interfaces, recommendations, automated actions, human approval or ways for users to understand and challenge AI-generated results.
Testing and evaluation
AI products need to be evaluated differently from conventional software in some areas.
Businesses may need to assess:
- Accuracy
- Reliability
- Consistency
- Security
- User experience
- AI-generated outputs
- Cost
- Performance
- Human oversight
Commercial model
If the product is being developed for customers, there also needs to be a clear commercial proposition.
This can include pricing, packaging, target customers, sales channels and the cost of delivering the AI service.
Turning an AI capability into a commercial proposition? Explore AI Commercialisation.
AI product development vs AI development
AI development and AI product development are related but they are not the same thing.
AI development focuses primarily on creating the technology.
AI product development considers the wider product, including:
- The customer
- The problem
- The proposition
- User experience
- AI capability
- Data
- Technology
- Commercial model
- Product roadmap
- Governance
A business may have excellent AI development capability but still need product expertise to determine what should actually be built.
AI product development vs AI strategy
AI strategy determines where AI could create value and which opportunities should be prioritised.
AI product development focuses on turning one of those opportunities into an actual product or service.
For example, an AI strategy might identify an opportunity to improve customer service through an AI assistant.
AI product development would then consider:
- What the assistant should do
- Who will use it
- How customers will interact with it
- Which AI technology is required
- What data it needs
- How it integrates with existing systems
- How it should be tested
- How it will be delivered and supported
Still deciding which AI opportunities to pursue? Explore AI Strategy.
AI product development vs AI transformation
AI transformation is generally broader than AI product development.
AI transformation can involve changing processes, technology, teams and ways of working across an organisation.
AI product development focuses on creating or improving a specific product or service.
The two can overlap. A business may develop an AI product as part of a wider AI transformation programme.
What types of AI products can businesses develop?
AI product development can cover many different types of products and services.
AI assistants and copilots
Products that help users perform tasks, find information, generate content or make decisions.
AI agents
Systems that can carry out tasks or workflows with a greater degree of autonomy.
AI automation products
Products that use AI to automate processes that previously required manual intervention.
AI analytics and prediction
Products that use AI to identify patterns, predict outcomes or provide recommendations.
AI-powered SaaS
Software products where AI is a central part of the functionality or customer proposition.
AI-enabled services
Existing professional or business services that are enhanced through AI.
AI features
Existing software products can also incorporate individual AI capabilities, such as natural-language search, summarisation, recommendations or automated content generation.
What does an AI product development team need?
AI product development often requires several different types of expertise.
Depending on the product, this could include:
- AI product specialists
- AI developers
- Software developers
- Data scientists
- Data engineers
- Machine learning specialists
- UX and product designers
- AI automation specialists
- AI agent specialists
- Cloud and technology specialists
- AI governance specialists
- Commercialisation specialists
The exact combination depends on the product.
A business developing an internal AI tool may need very different expertise from a technology company developing a new AI SaaS product.
Not sure which expertise you need? Get an AI expertise assessment.
When should a business consider AI product development?
AI product development can be relevant when:
- You have an idea for an AI-powered product.
- You want to add AI to an existing product.
- You have identified a new customer opportunity.
- You have proprietary data that could support a new product.
- You have developed an AI capability but do not know how to turn it into a product.
- You want to develop an AI assistant or copilot.
- You are considering an AI agent.
- You want to create a new AI-enabled service.
- You have an AI prototype that needs to become a usable product.
- You need to determine what AI expertise is required.
You do not necessarily need to build a completely new product.
For many businesses, the opportunity may be to improve an existing product or service using AI.
What does an AI product specialist do?
An AI product specialist helps connect customer requirements, product development and AI capabilities.
Depending on the project, they may:
- Understand customer requirements
- Identify product opportunities
- Define the product proposition
- Assess where AI could add value
- Develop product requirements
- Define the product roadmap
- Work with AI and technology teams
- Evaluate AI models and capabilities
- Design user experiences
- Support prototyping
- Coordinate testing and evaluation
- Consider commercial requirements
- Support the transition into production
The role sits between product, business and technology.
The expertise required will depend on the complexity of the product and the stage of development.
What AI expertise might you need?
AI product development is often only one part of the overall requirement.
Once the product opportunity is understood, a business may need other specialists.
| Business need | Potential expertise |
|---|---|
| Identify the opportunity | AI Strategy Consultant |
| Build an AI-enabled product | AI Product Specialist |
| Develop the AI capability | AI Developer |
| Create autonomous workflows | AI Agent Specialist |
| Automate processes | AI Automation Specialist |
| Transform the wider business | AI Transformation Consultant |
| Turn the product into a commercial proposition | AI Commercialisation Specialist |
| Manage AI risk and compliance | AI Governance Specialist |
| Find broader technology expertise | Technology Consultant |
The challenge is often not finding someone who works with AI.
It is finding the right AI expertise for the particular product and business requirement.
How to find the right AI product development expertise
Start by defining what you are trying to achieve.
Are you trying to:
- Create a new AI product?
- Improve an existing product?
- Develop an AI feature?
- Build an AI agent?
- Automate a process?
- Turn an AI capability into a commercial product?
- Move an AI prototype into production?
The answer will help determine the type of expertise required.
You may need one specialist or a combination of product, AI, technology and commercial expertise.
Find the right AI expertise for your requirement.
Frequently asked questions
- What is AI product development?
- AI product development is the process of creating products, services or features that use artificial intelligence to solve a customer or business problem.
- What is an AI product?
- An AI product is a product or service where artificial intelligence provides part of the functionality or value proposition. It could be a standalone AI product or an existing product enhanced with AI.
- What is the difference between AI product development and AI development?
- AI development focuses primarily on building the underlying AI technology. AI product development considers the wider product, including the customer problem, proposition, user experience, technology, data and commercial requirements.
- Do I need an AI product specialist?
- It depends on what you are trying to achieve. If you are still identifying the opportunity, AI strategy expertise may be more appropriate. If you know what you want to build, an AI product specialist can help translate the opportunity into a product that can be developed and tested.
- Can I add AI to an existing product?
- Yes. AI can be added to existing products through capabilities such as AI assistants, natural-language search, recommendations, prediction, content generation and automation.
- Do I need to build my own AI model?
- Not necessarily. Many AI products use existing AI models or services. The appropriate approach depends on the product requirements, data, security, performance and commercial considerations.
- How much does AI product development cost?
- The cost varies significantly depending on the complexity of the product, technology, data, integrations, security requirements and expertise required. Developing a prototype is usually very different from building and operating a production-scale AI product.
- Where should I start with an AI product idea?
- Start with the problem you are trying to solve and the value the product could create. From there, you can determine whether AI is appropriate, what type of product you need and what expertise will be required to develop it.
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