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What is the business value of AI (Artificial Intelligence) technologies in business today?


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Title: What is the business value of AI (Artificial Intelligence) technologies in business today?

What is the business value of AI (Artificial
Intelligence) technologies in business today?
941634 ???
U.S. Bancorp and Wachovia Bank--What is the
business value of AI technologies in business
  • U.S Bancorp. use a variety of AI tools called
    neural network to detecting credit-card frauds.
    It have slashed such incidents by 70.

Wal-Mart--What is the business value of AI
technologies in business today?
  • Wal-Mart harnesses AI to transform raw data into
    useful information and consolidates point-of-sale
    details from its 3000 stores.
  • Wal-Mart uses data-mining system to instantly
    shift the deluge to uncover patterns and
    relationships that would elude an army of human

Wal-Mart(cont.)--What is the business value of
AI technologies in business today?
  • The system enable Wal-Mart to predict sales of
    every products at each stores with uncanny
    accuracy, translating into huge savings in
    inventories and maximum payoff from promotional

Bank Financial --What is the business value of
AI technologies in business today?
  • Bank Financial Corp. use the Clementine
    data-mining workbench to develop model that
    predict customers behaviors so that bank can
    accurately target promotion to customers and
  • Bank Financial Corp. also beginning to use
    Product Marketing, a new package of
    best-practice templates for helping users set
    up predictive model .

Bank Financial(cont.) --What is the business
value of AI technologies in business today?
  • Predictive Marketing will reduce the time it
    takes the bank to develop a model. The first
    major application is a model to predict customers
    churn, the rate at which customers come and go.

HP --What is the business value of AI
technologies in business today?
  • HP can use their techniques of lead ratings to
    predict customer-led ratings with 85 accuracy.
  • HP has an Enterprise Systems Group that pulls
    together people with diverse background and
    strong analytical skills for its group that does
    predictive modeling of customer behavior.

HP(cont.)--What is the business value of AI
technologies in business today?
  • HP use software to mine its database of customers
    and prospects, using AI techniques to predict
    customer churn, loyalty, and where to target

What are some of the benefits and limitations of
data mining for business intelligence? Use
BankFinancials experience to illustrate your
941633 ???
What are some of the benefits and limitations of
data mining for business intelligence? Use
BankFinancials experience to illustrate your
  • Benefits
  • understanding and predicting customer behavior
  • cost-saving
  • revenue-boosting
  • reduce time
  • For BankFinancial this means knowing where to
    target customer promotions and how to get new
    prospects for business growth. 

What are some of the benefits and limitations of
data mining for business intelligence? Use
BankFinancials experience to illustrate your
  • Limitations
  • Getting daily transaction data
  • cost of data warehouse
  • Integrating disparate data sources
  • BankFinancial had a lot of difficulty getting the
    transaction data in the first place and, due to
    different data sources, had trouble integrating
    the data into something meaningful.

What are some of the benefits and limitations of
data mining for business intelligence? Use
BankFinancials experience to illustrate your
Why have banks and other financial institutions
been leading users of AI technologies like neural
networks? What are the benefits and limitations
of this technology?
941633 ???
Why have banks and other financial institutions
been leading users of AI technologies like neural
  • Banks and other financial institutions have been
    leaders in using AI, such as neural networking,
    because it makes good business sense.  They were
    able to reduce credit card fraud and save lots of
    money previously lost to these fraudulent
    business practices by using neural networking. 

What are the benefits and limitations of this
  • Benefits
  • increasing income by better understanding
    customer desires and needs
  • less formal statistical training
  • Limitations
  • Integrating disparate data sources
  • Getting daily transaction data
  • The data mining project is only as good as the
    data available to sift through.

Benefits to other industries
  • Marking/Retailing
  • Aid direct marketers by providing them with
    useful and accurate trends about their customers
    purchasing behavior.   Based on these trends,
    marketers can direct their marketing attentions
    to their customers with more precision.
  • Banking/Crediting
  • Data mining can assist financial institutions in
    areas such as credit reporting and loan
  • Law enforcement
  • Data mining can aid law enforcers in identifying
    criminal suspects as well as apprehending these
    criminals by examining trends in location, crime
    type, habit, and other patterns of behaviors.

  • Security issues
  • Although companies have a lot of personal
    information about us available online, they do
    not have sufficient security systems in place to
    protect that information. 
  • Misuse of information/inaccurate information
  • Trends obtain through data mining intended to be
    used for marketing purpose or for some other
    ethical purposes, may be misused. 

Describe what the AI in the real case is all
941621 ???
Artificial Intelligence(AI)
  • Artificial intelligence is the intelligence of
    machines and the branch of computer science which
    aims to create it.
  • The field was founded on the claim that a central
    property of human beings, intelligence can be so
    precisely described that it can be simulated by a
  • Artificial intelligence, by claiming to be able
    to recreate the capabilities of the human mind.

What is an Expert system?
- Techniques of AI
  • An expert system is software that attempts to
    reproduce the performance of one or more human
  • A traditional application of artificial
  • Once the system is developed, it is proven by
    being placed in the same real world problem
    solving situation.

What is an Expert system?(cont.)
- Techniques of AI
  • Two main methods of reasoning
  • Forward chaining - An inference engine using
    forward chaining searches the inference rules
    until it finds one in which the if clause is
    known to be true. It then concludes the then
    clause and adds this information to its data.

What is an Expert system?(cont.)
- Techniques of AI
  • Backward chaining - An inference engine using
    backward chaining would search the inference
    rules until it finds one which has a then clause
    that matches a desired goal. If the if clause of
    that inference rule is not known to be true, then
    it is added to the list of goals. EX
  • If Fritz is green then Fritz is a frog.
  • If Fritz is a frog then Fritz hops.

What is an Neural networks?
- Techniques of AI
  • An artificial neural network (ANN), also called
  • a simulated neural network (SNN)
  • neural network (NN)
  • What a neural network is, most would agree that
    it involves a network of simple processing
    elements (neurons) determined by the connections
    between the processing elements and element
  • In a neural network model, simple nodes are
    connected together to form a network of nodes
    "neural network."

What is an Neural networks?(cont.)
- Techniques of AI
  • In most cases an ANN is an adaptive system that
    changes its structure based on external or
    internal information that flows through the
  • An adaptive system - is a set of interacting or
    interdependent entities, real or abstract,
    forming an integrated whole that together are
    able to respond to environmental changes or
    changes in the interacting parts.

What is Data-mining?
- Techniques of AI
  • Data-mining is the process of extracting hidden
    patterns from data, as more data is gathered,
    data mining is becoming an increasingly important
    tool to transform this data into information.
  • The term data-mining is often used to apply to
    the two separate processes of knowledge discovery
    and prediction.
  • Knowledge discovery - provides explicit
    information about the characteristics of the
    collected data.
  • Forecasting and predictive modeling - provide
    predictions of future events.

What is Data-mining?(cont.)
- Techniques of AI
  • Data mining commonly involves four classes of
  • Classification - Arranges the data into
    predefined groups.
  • Clustering - Is like classification but the
    groups are not predefined, so the algorithm will
    try to group similar items together.
  • Regression - Attempts to find a function which
    models the data with the least error.
  • Association rule learning - Searches for
    relationships between variables.

What are the advantage and disadvantage of the AI?
941627 ???
  • Wal-Mart
  • 1.Transform raw data into useful data in high
  • 2.Help them predict sales with uncanny accuracy.
  • 3.Huge savings in inventories.
  • 4.Maximum payoff from promotional spending.

Advantages (cont.)
  • BankFinancial
  • 1.Accuracy number calculating.
  • 2.Faster math model developing.
  • 3.Predict customer behavior.
  • 4.Help them make promotion plans.

Advantages (cont.)
  • HP
  • 1.Predict customer behavior.
  • 2.Help them make the promotion plan.
  • 3.Analysis personnels assessments with complex

  • Data transaction issues
  • A huge amount of data need transform into
    regular files. Make them can be read by AI
    analysis process.
  • Data collection issues
  • There are some difficulties with raw data
    collection. These data sources are disparate
    could be from database, writing records, phone
    calls, etc.

Disadvantages (cont.)
  • Timeliness issuesDecision maker and his group
    member can get a result directly and quickly.
    They dont need transform data to a specification
    format. Because of that, AI may be useful in
    strategy decision making rather than tactics.
  • Limited functionalityEvery AI had a specialty in
    solving problems, but they cant solve other
    issues which they are not designed for.

Disadvantages (cont.)
  • No creative, less adaptabilityAI provides good
    solutions but may not the best. Some small signs
    or unpredictable events cant input into AI, like
    people emotion, natural disaster, etc.These
    things are hard to quantify, only people can deal
    with them.

How does the AI change the way new business
operate now?
941651 ???
Stocks-Wal Mart
Marketing strategy-WWE
Credit card issuing-HSBC
The place of goods-Wal Mart
Choose types of ground-CAD System
Determine Cancer Kaohsiung medical university
Chung-ho memorial hospital
Forecast Stock indexBeat Wüthrich Vincent Cho
Players career Analysis-Baseball Analysts
Experimental design - ACS
Besides those mentioned in the case, what other
ways can a business realize more business
benefits from the AI technique?
941641 ???
Market Basket Analysis
941641 ???
Market Basket Analysis
Rule A ? D C ? A A ? C B C ? D
Support 2/5 2/5 2/5 1/5
Confidence 2/3 2/4 2/3 1/3
941641 ???
Market Basket Analysis
  • Advantages
  • Computing model is easy-to-read
  • Conclusions are easy-to-read
  • Can analyze the different forms of raw data
  • Defects
  • When goods increase in the number of operations
    will be followed by an increase geometrically
  • Special attention not to the individual
    characteristics of goods
  • Difficult to determine the appropriate
    combination of a few commodities
  • Easy to remove a rare commodity

941641 ???
  • Knows the appropriate combination of commodities
    at different positions and in different time.
  • Drive propositions, advert and product placement.
  • Babies nappies (diapers) and beers purchases
    revealed that they
  • were made by men, on Friday
  • evenings mainly
  • between 6pm and 7pm.

  • The components of the computer suite and the
  • Most students will purchase computers with good
    graphics card, speaker, LCD, and joy sticks
    during summer vacation.

941641 ???
  • The consumer will buy printer, and they also may
    buy ink, toner, or paper.

941641 ???
Credit Rating
  • Estimates the credit worthiness of an individual,
    corporation, or even a country.
  • An evaluation made by credit bureaus of a
    borrowers overall credit history.
  • Calculated from financial history and current
    assets and liabilities.
  • Tells a lender or investor the probability of the
    subject being able to pay back a loan.

941641 ???
The factors which may influence a person's credit
  • Ability to pay a loan
  • Interest
  • Amount of credit used
  • Saving patterns
  • Spending patterns
  • Debt

941641 ???
  • Used to adjust insurance premiums, determine
    employment eligibility, and establish the amount
    of a utility or leasing deposit.
  • A poor credit rating indicates a high risk of
    defaulting on a loan, and thus leads to high
    interest rates, or the refusal of a loan by the

941641 ???
Do some searches from the web and provide some
historical background about the mentioned AI
(Artificial Intelligence)?
941636 ???
Historical background of AI
  • 1950, Alan Turing took a experiment to test a
    question Can machines think?
  • The machines pass the experiment If 30 users had
    been cheated.

Is A the human or is B?
941636 ???
Historical background of AI (contd)
  • What theories were AI based on ?
  • - Philosophy Logic, methods of reasoning.
  • - Mathematics Proof algorithms,computation,
  • - Economics Utility, decision theory.
  • - Psychology Using the tools and methodologies
  • observe human
  • - Linguistics Knowledge representation, grammar.

941636 ???
Historical background of AI (contd)
  • 1956-1970
  • 1956, John McCarthy coins the term, "Artificial
    Intelligence" at a Dartmouth computer conference.
  • 1958, John McCarthy invents the Lisp language, an
    AI programming language, at Massachusetts
    Institute of Technology (MIT).
  • At that time computer abilities were limited , a
    program that can perform something intelligent is

941636 ???
Historical background of AI (contd)
  • 1970-1979
  • 1972 Alain Colmerauer writes Prolog.
  • 1974 Ted Shortliffe creates MYCIN, the first
    expert system which showed the effectiveness of
    rule-based knowledge representation for medical
  • Although expert system grow fast but AI develop
    slowly in this period .

941636 ???
Historical background of AI (contd)
  • 1980 - present
  • Application of AI
  • - Autonomous Planning and Scheduling.
  • - Autonomous Control.
  • - Data mining.
  • - Robotics.
  • 1995 The emergence of intelligent agents.

941636 ???
Historical background of AI (contd)
  • 1997 IBM computer Deep Blue using AI technology
    beats world champion Garry Kasparov in chess
  • It means a big milestone.
  • That success is ascribe on strong
    computation ability and enough

941636 ???
Describe who else may find the AI useful. Give at
least 5 examples. And, why do you think so?
941624 ???
Surveillance-U.S. government
  • Previous data mining to stop terrorist programs
    under the U.S. government include
  • Total Information Awareness (TIA) program
  • Computer-Assisted Passenger Prescreening System
    (CAPPS II)
  • Analysis, Dissemination, Visualization, Insight,
    Semantic Enhancement (ADVISE)
  • Multistate Anti-Terrorism Information Exchange
  • Secure Flight program
  • Today many records are electronic, resulting in
    an "electronic trail".
  • When many such transactions are aggregated they
    can be used to assemble a detailed profile
    revealing the actions, habits, beliefs, locations
    frequented, social connections, and preferences
    of the individual.
  • This profile is then used, by programs such as
    ADVISE and TALON(Threat and Local Observation
    Notice) , to determine whether the person is a
    military, criminal, or political threat.

Surveillance(cont.) -U.S. government
  • These programs have been discontinued due to
    controversy over whether they violate the US
    Constitution's 4th amendment.

Center for Disease Control-Applying Text Mining
to Assist People Who InquiresHIV/AIDS
Information from Internet
  • The present research proposes an Internet health
    information governance mechanism (IHIGM) for
    support the diseases control and health authority
    to do their efforts in Internet health
  • In the experiment, the research takes People
    Inquire HIV/AIDS Information
  • from Internet as example
  • and explains the procedure
  • of IHIGM.

Center for Disease Control(cont.)-Applying Text
Mining to Assist People Who InquiresHIV/AIDS
Information from Internet
  • Part A
  • is health information from Internet by
    Questioners or Repliers.
  • There is a web crawler to gather related HIV/AIDS
    health information by Questioners or Repliers
    from Internet then into part B.
  • Part B
  • The HIV/AIDS health information document will be
    recorded in stage I, such as Questioner/ Replier
    ID, title, content, link and time.
  • The title and content of each document will be
    extracted by word segment technique to find
    valuable terms to represent the document in stage
  • Then in stage III, there is a baseline matching
    skill for four scenarios which provided by domain
    expert and mentioned above to classify the target
    health information to intervene.
  • Part C
  • The authority can make responding strategies for
    the target health information to show efforts for
    health information in Internet.

Hospital-St. Joseph Mercy Hospital
  • Diagnose Heart Attacks
  • traditional
  • electrocardiogram (EKG)
  • Exam
  • blood analysis
  • A physician at St. Joseph Mercy Hospital in
  • designed a neural network that recognizes cases
    of acute myocardial infarction (AMI, commonly
    called heart attack) using the cardiac enzyme
    data from series of tests on patients.
  • The input consisted of two sequential cardiac
    enzyme tests and the number of hours between the
    tests. The output was "1" if the patient had a
    heart attack and "0" if the patient did not. The
    network was trained with 185 examples from 47
    patients using blood tests that were not more
    than 48 hours apart.
  • The network agreed with 100 of the AMI cases
    diagnosed by the cardiac enzyme expert, and 93
    of the non-AMI cases. The 7 difference occurred
    where the network was uncertain.

Telecommunications -MCI Communications
  • MCI would like to remain the most customers. One
    way is to find the customers timely who consider
    changing the company. Then MCI can try to remain
    them, such as providing special rates and
  • But how do you find the customers who you need to
  • MCI searches the information of the 140 million
    families. Attributes of each family are up to
    10,000. These include income, lifestyle,
    customary to call, etc.
  • To identify the model, MCI use its data warehouse
    to find the most significant variables, and pay
    close attention to these variables.

  • Issue credit cards for customers
  • The Consuming Behaviors of these customers have
    been stored
  • A week stored about 500GB in the Data Warehouse
  • then they use Association (such as Market Basket
    Analysis) compared to the collection which
    includes transaction data and product data, and
    then set a list of attractive products.
  • customers who buy barbecue charcoal, in 75 will
    purchase lighter fuel
  • a cheese product ranked 209 in sales, but The
    highest spending customers in 25 are often
    bought this cheese
  • 28 brands of orange juice, There are eight
    particular favorite brands. Therefore the company
    rearranges the display cabinets, making the
    amount of sales can be maximized
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