by James Canton

Building the predictive enterprise: What CIOs should tell CEOs about A.I.

Feb 10, 2017
AnalyticsArtificial IntelligenceBig Data

Artificial intelligence is a powerful technology that can turn your organization into a predictive enterprise. But CIOs need to work with their CEOs to clarify the business case for A.I. instead of rushing headlong into the A.I. revolution.

machine learning ai artificial intelligence
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By now we have all heard the buzz. Siri has plenty of company. Alexa and Google have invaded the home. Tesla’s artificial intelligence is, well, driving itself. Google’s Deep Mind is running the company’s multi-billion-dollar search business. Even they don’t know how it works — it just does. IBM’s Watson has its own office and is predicting cancer treatments for real patients. You can’t even date online without artificial intelligence (A.I.) hooking you up.

There are even A.I.-based autonomous ships, bots, games and investment and commerce platforms that are emerging. Eventually A.I. will be everywhere. Are you ready for the A.I. revolution? Of course, the answer is no one is ready, because this is only A.I. 1.0 — the beginning of time. So let’s review.

Artificial intelligence has finally emerged, and the prospects for it transforming the enterprise are excellent. Every enterprise should be looking at what blend of A.I. they want to investigate. From machine learning to neural nets, recommendation engines and decision bots — the landscape of the marketplace is full of choices. The real question I would pose is, “What should CIOs be telling their CEOs about the A.I. revolution?” The answer: “Show me the business strategy.”

I would challenge CIOs to work out the strategy question first. What is the business strategy that would benefit and even justify adding artificial intelligence? How could we generate a competitive advantage from investing in machine learning or automated decision support that A.I. could offer? There needs to be a business value or competitive advantage that investing in A.I. makes clear. If not, then you are not ready. Or don’t invest much until you can answer this strategic question.

Too many companies are so impressed with A.I. buzz that they are moving headlong into A.I. without clarifying what the business strategy case could be. Are we going to be able to generate better customer service? Help employees make better decisions? Enable our customer to use more of our products or services? How about fix that problem that those pesky humans don’t seem to be able to handle? How will we be able to monetize artificial intelligence?

The A.I. revolution is being accelerated by the advances recently by a number of companies that are collectively spending many millions on this technology. Facebook, Google, IBM, Apple, Amazon and Microsoft are just a few of the companies that have had breakthroughs in creating the beginning of thinking systems that do your work for you. Spending on A.I. has dwarfed spending on drones. Everyone wants an A.I. strategy. Ford just licensed Amazon’s Alexa for its autos. Even Tesla uses the Nvidia chip to get its smarts on.

We are well beyond the early days of A.I. decades ago, when crude expert systems and rule-based recommendation software was common but frankly not so smart. These early forms of A.I. did not scale, were not as useful and did not have the capabilities that machine learning has today. One-off innovations like fuzzy logic systems for taking clearer pictures did not make an A.I. revolution. Even our robots know that.

What has made a difference is that machine learning — the teaching of computers to recognize images, data and objects — has evolved. Now we can teach A.I. systems what we want and they can operate with a degree of autonomy. This makes a huge difference.

When we add A.I. to the convergence of big data, cloud, analytics and mobile, we will find a way to conduct meaningful enterprise prediction. We can now analyze all of that data to figure out what to do, what to make and what to sell to whom, and it’s backed up by meaningful insights. Enterprise prediction is about using software algorithms to anticipate customer and even employee wants and needs.

Artificial intelligence is the soul of the new machine — the predictive enterprise. Every organization is a predictive enterprise, they just don’t know it yet. And A.I. is at the heart of that predicative capability. Now that is a revolution worth talking about with every CEO because A.I. is transformative. Not for the sake of A.I. as an emerging technology, but what it means for business. “Prediction as a service” will be a new marketplace.

Now, I know that some CIOs are fans of the cinema-version of a dystopian future A.I. portrayed by post-Terminator thinking. Or maybe you believe in the singularity and expect that computers becoming smarter than humans is a realistic part of that future. Though I don’t doubt that A.I. systems may be smarter than humans someday for some jobs (and I hope they are), I would not count on super-intelligent A.I. systems taking over our jobs anytime soon. But if they want them…

Now, back to the present. There is a legitimate and mission-essential rationale in carefully examining A.I. and the various use cases and capabilities it may enable in the enterprise. I do suggest that A.I. will replace human workers — everyone relax. But I would caution the CEO to tread carefully. Justify and clarify. And have a look at A.I. after your successful cloud, analytics and IoT strategies have been worked out. How can A.I. enable these other IT investments? Should we license Alexa or Google Home rather make your own A.I. system? Think strategy.

So if you can answer these questions and justify the big strategy question, then I think you’re on your way to becoming a predictive enterprise. How can we delight customers, empower our employees or drive new services or products? What new revenues might we forecast from implementing A.I.? Now that’s the conversation the CIO should have with the CEO.