Technology

What Does Machine Learning Mean For Businesses?

Recently, there’s been a lot of interest in the way machines deal with problems “intelligently”. So called “intelligent machines” have been a matter of discussion for a while now especially for businesses and researchers. The term “AI” is more or less being misused to label anything that machines can achieve. And then there are opponents to any sort of intelligent systems who propose that artificial intelligence is the end of the labour market as we know it. However, despite all these chatter about what machines can and cannot do, no one really takes the time to understand what artificial intelligence really is and how it will affect both businesses and everyday life.

Ai And Machine Learning
An Illustration of Artificial Intelligence

A lot is often left out when people talk about things like big data, computing, artificial intelligence, machine learning, deep learning, automation etc. The simplest explanation is of course that when these things come up they often refer to the ability of machines to learn to fulfill objectives based on data and reasoning.

Do People and Businesses Really Understand Artificial Intelligence?

AI and machine learning are both tremendously important, and is already changing business in practically every industry. In spite of all the bold claims, there remain several core problems at the heart of Artificial Intelligence where little progress has been made (including learning by analogy, and natural language understanding). Machine learning isn’t magic, and the truth is we have neither the data nor the understanding necessary to build machines that make routine decisions as well as human beings.

For some, this may come as a disappointment especially for marketing departments looking to catch up with new tech trends. However, the possibility of completely self-directed, super-intelligent computational agents emerging in the nearest future is very very low. On the other hand, a lot have already been achieved with current technologies and available data and this is where businesses should be focusing their energies.

What Does The Future Hold?

In just a few years into the future, it is predicted that the biggest gains in business will be derived from how information is transmitted to and from the right channels at the right time and to the right people. For businesses to survive, they must begin to look for ways to leverage how information is passed within and around their organizations.

Machine learning will turbocharge finding patterns and automate value extraction in many areas. Data will increasingly drive a real-time economy, where resources are marshaled more efficiently, and the production of goods and services becomes on-demand, with lower failure rates and much better predictability. This will mean different things for different industries.

Services industry

For the services industry, predictive power will more than quadruple whatever is available now. And this may come with a lot biases but businesses will not only learn how to forecast demand better but also design and launch highly personalized products.

For the retail industry

In retail we will see more sophisticated supply chains, a deeper understanding of consumer preferences, and the ability to customize products and purchase experiences both on- and off-line. Retailers will focus on trend creation and preference formation/brand building.

For the manufacturing industry

In manufacturing there will be an evolution towards real-time complete system monitoring, an area known as “anomaly detection.” The components will become increasingly connected, allowing for streams of real-time data that machine learning algorithms can use to reveal problems before they happen, optimize the lifetime of components, and reduce the need for human interventions.

For the agriculture industry

In agriculture, data will be used to decide which crops to grow, in what quantities, in what locations, and will render the growing process more efficient year after year. This will create more efficient supply chains, better food, and more sustainable growth with fewer resources.

In short, AI may be a ways off, but machine learning already offers huge potential. So how can managers incorporate it into daily decision-making and longer-term planning? How can a company become ML-ready?

For businesses looking to capitalize, these are four areas to focus on.

First, catalogue your business processes.

Look for procedures and decisions that are made frequently and consistently, like approving or denying a loan application. Make sure you’re collecting as much data as is feasible about how the decision was made, along with any data used to make it. And make sure to collect the decision itself. In the hypothetical loan example, you want to record whether the loan was approved; the data used to make that decision; and any other information about the circumstances behind the decision. (Who made it? At what time of day? How confident did they feel in the decision?) This is the kind of data that can be used to fuel machine learning in the future.

Second, focus on simple problems.

Automation and machine learning will work well where the problem is well defined and well understood, and where the available data exemplifies the information necessary to make a decision. A good problem for machine learning is identifying a fraudulent transaction. The question “What makes customers feel happy?” is vaguer, more challenging, and not the place to start.

Thirdly;

Don’t use machine learning where standard business logic will suffice. Machine learning is useful when the set of rules is unclear, or follows complex, non-linear patterns. If you want transparency and reliability, go for the simplest possible approach that meets your performance criteria.

Fourthly;

If a process is complicated, use machine learning to create decision support systems. If the objective is too unclear to define with respect to the data, try to create intermediate results to help your teams be more effective. You can think of machine learning as part of the hierarchical decision-making path, and it will engender a better understanding of the problem in future.

The point is that there is a lot that can be done without needing to dig very deep. The majority of your workforce will continue to have a job, and you can help them to be more productive, and work on more interesting and demanding (read: more valuable) tasks by digitizing more of the mechanical parts of your business. For now, artificial intelligence cannot turn a business’s performance from bad to good, but it can make some aspects of a good business great.

If you run out of low hanging fruit — though I’ll wager you won’t — it may be time to consider building a team to attack more complex problems with machine learning. Be patient, as this investment will not pay off immediately. If you do decide to create such a team, be open, engage with the research community, and you will be contributing to building tomorrow’s economy.

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