It's time to make the Machine Learn your business 

There is a lot of talk about AI (Artificial Intelligence) and ML(Machine Learning). Is it just a hype 
about the new technology? Can AI add substantial business value to your business? Let's take a 
look at some of the basics and ground truth about AI, the opportunities and challenges it provides 
to business and some real use cases which are providing differentiated advantage to the early 
adopters. Also discussed is an approach for business to derive value from this disruptive 
technology. 
 

What is ML? Is it same as AI?

In a broader sense AI can refer to any of these 
technology systems – Robotics & autonomous vehicle, 
Computer vision, NLP (natural language 
processing/understanding), Virtual assistant 
(/chatbots) & Machine Learning. 
 
Machine Learning can be a common ingredient to 
some of the above systems. ML as such refers to any computer program which can self learn from 
its experience (/dataset) without the need for explicitly programming for each experience. 
How ready is AI for business?
AI has been around for decades. But it hasn’t come to the main stream commercial space until 
now. Now it may be changing. Many tasks which were considered to be requiring human cognitive 
capability like identifying patterns, making meaningful insights, taking decision and forecasting 
can now be done by AI powered applications. 
What has changed? Abundance of labeled data is one reason. Big data and IoT sensor technologies 
have largely contributed towards this. Second cause could be the reduced cost of high computing 
power (e.g., GPU for deep learning). The third reason is the advancement in the AI technologies 
itself. All these are enabling the AI to start solving business problems which requires cognitive 
capabilities. 

Some successful & impactful use cases

AI is already being used by some businesses in different domains to drive value. Adoption is 
varying - businesses in High tech, Automotive and Financial services are the leaders in AI adoption. 
Education and Healthcare domain seems to be the slowest in the AI adoption. Increased 
profitability is realized by many of these early adopters. Some of the impactful use cases from 
different domains are given below. 

Accurate forecasting in retail

German e-commerce company Otto through data 

analytics found that the number of items returned 
can be reduced significantly if shipments are made 
within 2 days of ordering. Also they found that the 
customers prefer single shipment for all the items in 
their orders. Otto found the solution by using AI. A 
deep learning algorithm analysis 3 billion historic 
transaction using 200 variables to predict what 
customers will buy. The AI system is able to predict with 90% accuracy what will be sold within 30 
days. By using the system, surplus inventory to be kept is reduced by 20%. The returns per year is 
reduced by 2 million items. 
 

AI to make flights more efficient

GE conducted Kaggle challenges (Flight Quest 
1&2) which identified AI usage for efficiency in 
flight. The winning algorithms uses national 
airspace data and determines the most efficient 
routes, speed and altitude in real time. It considers various parameters like weather, wind and 
airspace restraints. The solution provides 12% efficiency improvement. GE has estimated that the 
proposed solution can reduce the annual fuel consumption by 360 million gallons and save $3 
billion per year for the airline industry. 
 

Technology Assisted Review (TAR)

TAR is having a significant 
impact in the legal domain. 
First recognized by US 
court in 2012, TAR is used  in 
the discovery phase of a 
legal proceeding for 
identifying the documents 
(including emails, pdfs, 
presentations, databases, 
voice messages etc) which  are 
relevant for a law suit or 
investigation. TAR involves multiple technology and process and may be implemented in different 
ways. But typically core is a supervised learning algorithm where expert tags documents as 
relevant or non-relevant. This is used by the algorithm to identify similar documents for further 
analysis by expert. This way the system can sift through huge data sets in reduced time frame. 
Studies have shown that it reduces the total hours spend in the eDiscovery phase by 20-30%, at 
the same time increasing the accuracy. 
 

Predictive Maintenance in energy plants

In most of the coal power plants, aging equipment is a big problem requiring constant maintenance 
and resulting in down time. One coal power plant was able to use AI based predictive analytics to 
predict timing of failures within one week, 6 months in advance with 74% accuracy. This kind of 
predictive maintenance can help in 15 to 20% increase in their profit margin. 
Personalized cancer
treatment using AI
In the healthcare space many companies 
uses AI for providing accurate disease 
diagnosis to personalized treatment. For 
example Oncora medical, a startup 
company, uses AI with integrated digital 
medical database providing Precision 
Radiation Oncology platform. This 
enables personalized cancer treatment 
for patients providing better results.   
 

AI in adaptive learning
In education field AI is used for bringing value in 
different areas. Some of the AI applications are - for 
identifying skill gap as per future industry needs, for 
identifying behavioral changes in students warning 
school drop outs, for enabling personalized learning, 
and even for enabling virtual teaching assistant. 
Quantum, a startup, offers AI based adaptive learning 
and assessment solutions. Quantum Adaptive 
learning is playing a key role in the Artificial 
Intelligence market in the US education sector which 
is expected to grow at a CAGR of 47% during 2018-21. 

Challenges in AI
Unavailability of AI based solutions for enterprise level business opportunities is a concern. There 
are generic AI based platforms from various vendors. These include IBM’s Watson, Amazon 
ML/SageMaker, Microsoft Azure ML studio, and Google ML Engine / TensorFlow. These platforms 
offers specific ML functionalities like speech recognition, classification, regression, anomaly 
detection etc. But there are not many mainstream enterprise application products helping 
businesses to easily take advantage of AI. This can be addressed by developing custom solution for 
the business by partnering with startups or other third party.  
Second challenge is the acceptance of the AI solution by the existing staff. For an AI project to be 
successful, it is important for all the stakeholders to have upfront buy-in to the project. This 
requires openness and transparency of the project which is executed. It should not remain as a 
high-tech solution being implemented within the organization by a small group of experts (internal 
or external). If you are partnering with a startup or other third party, ensure that the partner also 
has a culture of openness and willing to share the approach details with the relevant teams in your 
organization. 
Scarcity of capable ML experts is another issue the industry is facing. To overcome this, companies 
adopt various strategies including acqui-hiring (acquiring startups for talent), internal reskilling, 
tying up with external partners (typically startups) etc. 

How Businesses can realize the benefits of AI driven growth ?

As per a McKinsey study in 2017, AI has provided higher margins for early adopters and expect 
the performance gap with other firms to widen in future. The evidence suggests that AI can deliver 
real value to serious adopters and can be a powerful force for disruption. What is the 
recommended approach for a business to adopt AI? The six steps recommended are 
 
● Define a strong AI business case and connect it to the organization's strategy 
● The effort need to be co-led by business and technical leaders 
● Have a long term plan but start with small goals 
● Build internal capability or partner with AI startups 
● Take an agile approach - focus on working prototype and expand incrementally 
● Re-design processes workflows to incorporate AI insight into the workflow deriving value 
 

References
IDC FutureScape: Worldwide IT Industry 2018 Predictions 
HBR: The business of Artificial Intelligence 
McKinsey Global Institute: Artificial Intelligence the next digital frontier 
10 Top takeaways - Forrester AI readiness study 
Fortune: 50 companies leading in AI 
The economist: How Germany’s Otto uses artificial intelligence