Title: What is the business value of AI (Artificial Intelligence) technologies in business today?
1What is the business value of AI (Artificial
Intelligence) technologies in business today?
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2U.S. Bancorp and Wachovia Bank--What is the
business value of AI technologies in business
today?
- U.S Bancorp. use a variety of AI tools called
neural network to detecting credit-card frauds.
It have slashed such incidents by 70.
3Wal-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
searches.
4Wal-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
spending.
5Bank 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
prospects. - Bank Financial Corp. also beginning to use
Product Marketing, a new package of
best-practice templates for helping users set
up predictive model .
6Bank 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.
7HP --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.
8HP(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
marketing.
9What are some of the benefits and limitations of
data mining for business intelligence? Use
BankFinancials experience to illustrate your
answer.
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10What are some of the benefits and limitations of
data mining for business intelligence? Use
BankFinancials experience to illustrate your
answer.
- 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.
11What are some of the benefits and limitations of
data mining for business intelligence? Use
BankFinancials experience to illustrate your
answer.(contd)
- 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.
12What are some of the benefits and limitations of
data mining for business intelligence? Use
BankFinancials experience to illustrate your
answer.(contd)
13Why have banks and other financial institutions
been leading users of AI technologies like neural
networks? What are the benefits and limitations
of this technology?
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14Why have banks and other financial institutions
been leading users of AI technologies like neural
networks?
- 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.
15 What are the benefits and limitations of this
technology?
- 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.
16Benefits 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
information. - 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.
17Limitations
- 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.
18Describe what the AI in the real case is all
about?
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19Artificial 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
machine. - Artificial intelligence, by claiming to be able
to recreate the capabilities of the human mind.
20What is an Expert system?
- Techniques of AI
- An expert system is software that attempts to
reproduce the performance of one or more human
experts. - A traditional application of artificial
intelligence. - Once the system is developed, it is proven by
being placed in the same real world problem
solving situation.
21What 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.
22What 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.
23What 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
parameters. - In a neural network model, simple nodes are
connected together to form a network of nodes
"neural network."
24What 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
network. - 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.
25What 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.
26What is Data-mining?(cont.)
- Techniques of AI
- Data mining commonly involves four classes of
task - 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.
27What are the advantage and disadvantage of the AI?
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28Advantages
- Wal-Mart
- 1.Transform raw data into useful data in high
efficiency. - 2.Help them predict sales with uncanny accuracy.
- 3.Huge savings in inventories.
- 4.Maximum payoff from promotional spending.
29Advantages (cont.)
- BankFinancial
- 1.Accuracy number calculating.
- 2.Faster math model developing.
- 3.Predict customer behavior.
- 4.Help them make promotion plans.
30Advantages (cont.)
- HP
- 1.Predict customer behavior.
- 2.Help them make the promotion plan.
- 3.Analysis personnels assessments with complex
data.
31Disadvantages
- 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.
32Disadvantages (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.
33Disadvantages (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.
34How does the AI change the way new business
operate now?
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35Stocks-Wal Mart
36Marketing strategy-WWE
37Credit card issuing-HSBC
38The place of goods-Wal Mart
39Choose types of ground-CAD System
40Determine Cancer Kaohsiung medical university
Chung-ho memorial hospital
41Forecast Stock indexBeat Wüthrich Vincent Cho
42Players career Analysis-Baseball Analysts
43Experimental design - ACS
44Besides those mentioned in the case, what other
ways can a business realize more business
benefits from the AI technique?
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45Market Basket Analysis
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46Market 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
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47Market 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
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48Wal-Mart
- 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.
49HP
- The components of the computer suite and the
peripherals. - Most students will purchase computers with good
graphics card, speaker, LCD, and joy sticks
during summer vacation.
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50HP
- The consumer will buy printer, and they also may
buy ink, toner, or paper.
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51Credit 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.
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52The factors which may influence a person's credit
rating
- Ability to pay a loan
- Interest
- Amount of credit used
- Saving patterns
- Spending patterns
- Debt
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53BankFinancial
- 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
creditor.
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54Do some searches from the web and provide some
historical background about the mentioned AI
(Artificial Intelligence)?
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55Historical 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.
A
B
Is A the human or is B?
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56Historical background of AI (contd)
- What theories were AI based on ?
-
- - Philosophy Logic, methods of reasoning.
- - Mathematics Proof algorithms,computation,
probability. - - Economics Utility, decision theory.
- - Psychology Using the tools and methodologies
to - observe human
thought. - - Linguistics Knowledge representation, grammar.
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57Historical 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
shocking.
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58Historical 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
diagnosis. - Although expert system grow fast but AI develop
slowly in this period .
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59Historical background of AI (contd)
- 1980 - present
- Application of AI
- - Autonomous Planning and Scheduling.
- - Autonomous Control.
- - Data mining.
- - Robotics.
- 1995 The emergence of intelligent agents.
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60Historical background of AI (contd)
- 1997 IBM computer Deep Blue using AI technology
beats world champion Garry Kasparov in chess
match. - It means a big milestone.
- That success is ascribe on strong
computation ability and enough
storage.
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61Describe who else may find the AI useful. Give at
least 5 examples. And, why do you think so?
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62Surveillance-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
(MATRIX) - 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.
63Surveillance(cont.) -U.S. government
- These programs have been discontinued due to
controversy over whether they violate the US
Constitution's 4th amendment.
64Center 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
information. - In the experiment, the research takes People
Inquire HIV/AIDS Information - from Internet as example
- and explains the procedure
- of IHIGM.
65Center 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
II. - 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.
66Hospital-St. Joseph Mercy Hospital
- Diagnose Heart Attacks
- traditional
- electrocardiogram (EKG)
- Exam
- blood analysis
- A physician at St. Joseph Mercy Hospital in
Michigan - 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.
67Telecommunications -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
services. - But how do you find the customers who you need to
remain? - 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.
68Supermarkets-Safeway
- 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