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Slide 1
Analytics, Data Science and AI:

Systems for Decision Support
Eleventh Edition
Chapter 2
Artificial Intelligence Concepts,
Drivers, Major Technologies, and
Business Applications
Chapter 02
Artificial intelligence and
decision support
Copyright © 2020, 2015, 2011 Pearson Education, Inc. All Rights Reserved
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Slide 2
Knowledge and Expert Systems

(1 of 2)
• Knowledge sourced intelligent systems
– Knowledge acquisition
 Identifying experts
– Knowledge representation
– Reasoning from knowledge
• Chatbots
• Emerging AI technologies
– Effective computing
– Biometric analysis
For many intelligent systems to work, it is necessary for them to have knowledge. The process of
acquiring this knowledge is referred to as knowledge acquisition.
The sources of the knowledge need to be identified to ensure the feasibility of acquiring the
knowledge. The specific methods of acquiring the knowledge need to be identified and if
expert(s) are the source of knowledge, their cooperation must be ensured. In addition, the method
of knowledge representation and reasoning from the collected knowledge must be taken into
account, and knowledge must be validated and be consistent.
Chatbots: is a conversional robot that is used for chatting with people. (A “bot” is short for
“robot.”) Depending on the purpose of the chat, which can be done in writing or by voice.
Effective computing: These technologies detect the emotional conditions of people and suggest
how to deal with discovered problems.
• Biometric analysis: These technologies can verify an identity based on unique biological traits
that are compared to stored ones (e.g., facial recognition).
Slide 3
Knowledge and Expert Systems

(2 of 2)
• Cognitive computing
– Knowledge derived from cognitive science
– Self learning algorithms
– IBM Watson
• Augmented reality
– Augmentation: integration of digital information within
the user environment in real time
– Real + virtual combined
– Virtual reality
Cognitive computing is the application of knowledge derived from cognitive science (the study
of the human brain) and computer science theories in order to simulate the human thought
processes so that computers can exhibit and/or support decision-making and problem-solving
capabilities.
(Watson) : support people in making complex decisions.

Slide 4
AI Support for Decision Making

• Jeff Bezos, the C E O of Amazon.com, said in May 2017 that AI is in a
golden age …
• AI can …
– Solve complex problems that people have not been able to
solve.
– Make much faster decisions.
– Find relevant information, even in large data sources, very fast.
– Make complex calculations rapidly.
– Conduct complex comparisons and evaluations in real time.
– Watch “AI Will Be Making Decisions for You” at
https://www.youtube.com/watch?v=Dr9jeRy9whQ
Slide 5
Using AI in Decision Making

• Issues & factors:
– The nature of the decision [routine vs non-routine]
– The method of support / technologies used
 Expert systems, recommender systems
 Deep learning, pattern recognition, biometrics
recognition
– Cos-benefit and risk analysis
– Using business rules
– AI algorithms
– Speed
Slide 6
AI Support for Decision-Making

Process
• AI support in problem identification
• AI support in generating or finding alternative solutions
• AI support in selecting a solution
• AI support in implementing the solution
• AI can (and should) play a role in each and every step in
the decision making process
Slide 7
Intelligent & Automated Decision

Support
• Automated decision making (since 1970s)
• Common examples:
– Small loan approvals
– Initial screening of job applicants
– Simple restocking
– Prices of products and services (when and how to change
them)
– Product recommendation (e.g., at Amazon.com)
• Example: Supporting Nurses Diagnosis Decisions
– An experiment conducted in a Taiwanese hospital (in 2015)
– 87% agreement between AI and human experts
A study conducted in a Taiwanese hospital (Liao, et al., 2015) investigated the use of AI to
generate nursing diagnoses and compared them to diagnoses generated by humans.
Slide 8
Technology Insight 2.2

Schrage’s Models for Using AI to Make
Decisions
1. The autonomous advisor
2. The autonomous outsource
3. People-machine collaboration
4. Complete machine autonomy
• Implementing these four models require appropriate
management leadership and collaboration with data
scientists.
The Autonomous Advisor: This is a data-driven management model that uses AI algorithms to
generate best strategies and instructions on what to do and makes specific recommendations.
However, only humans can approve the recommendations (e.g., proposed solutions).
The Autonomous Outsource: Here, the traditional business process outsourcing model is
changed to a business process algorithm.
People–Machine Collaboration: To ensure such collaboration, it is necessary to train people to

work with the AI machines.
Complete Machine Autonomy: In this model, organizations fully automate entire processes.
Management needs to completely trust AI models.
Slide 9
AI Applications in Accounting
• AI in big accounting firms
• AI in small accounting firms
– Solve complex billing problems (especially in
healthcare)
 Claim processing and reimbursement
– Real estate contracts, risk analysis …
– AI provides cheaper and better data-driven support
– Generates needed insights from data analysis
– Frees time of accountants for more complex tasks
– Machine learning is often used for prediction
• AI will improve and automate accounting tasks but at the
same time will take away some accounting jobs.
Slide 10
A I Applications in Financial Services

• Diverse use of AI, in banking and insurance.
• Examples of AI use in general financial services:
– Extreme personalization (e.g., personal assistants)
– Shifting customer behavior both online and in branches
– Facilitating trust in digital identity, revolutionizing payments
– Offering financial services 24/7 and globally
• Banking can also uses AI for …
– Face recognition (safer online banking), help customer with
smart investment decisions, prevent money laundering, …
• Insurance – mostly in issuing policies and handling claims
Slide 11
AI in Human Resource Management

(1 of 2)
• Recruitment – talent acquisition
• Training – AI facilitates training
• Performance assessment (evaluation)
• Retention –eliminating attrition
– Predicting attrition way ahead of time to eliminate loss
of talent
• Using chatbots for supporting HRM
Predicting attrition refers to the process of using data and statistical models to
forecast or estimate the likelihood that individuals within a group, such as employees in
a company, customers of a service, or members of an organization, will leave or
discontinue their association in the future. Attrition, in this context, commonly refers to
..voluntary departures
Slide 12
AI in Human Resource Management

(2 of 2)
• Introducing AI to HRM operations:
1. Experiment with a variety of chatbots
2. Properly plan a technology roadmap for both the
short and long term, including shared vision with
other functional areas
3. Identify new job roles and modifications in existing
job roles in the transformed environment
4. Train and educate the HRM team to understand AI
and gain expertise in it.
HRM= human resource management

Slide 13
AI in Marketing, Advertising, & CR M

(1 of 2)
• One of the richest area for AI applications:
1. Product and personal recommendations
2. Smart search engines
3. Fraud and data breaches detection
4. Social semantics
5. Web site design
6. Producer pricing
7. Predictive customer service
Slide 14
AI in Marketing, Advertising, & CR M

(2 of 2)
• Improving customer experience and CRM
1. Use NLP for generating user documentation. This
capability also improves the customer–machine
dialogue.
2. Use visual categorization to organize images (for
example IB M’s Visual Recognition and Clarifai)
3. Provide personalized and segmented services by
analyzing customer data.
Slide 15
AI in Production-Operation
Management
• AI in manufacturing
– Automation for cost reduction.
– React quicker and more effectively (agility)
• Implementation model
– Streamlining processes, smart outsourcing, work
automation, improving customer experience
• Intelligent factories

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Slide 1

Analytics, Data Science and AI:

If this PowerPoint presentation contains mathematical equations, you may need to

Knowledge and Expert Systems

Knowledge and Expert Systems

(Watson) : support people in making complex decisions.

AI Support for Decision Making

Using AI in Decision Making

AI Support for Decision-Making

Intelligent & Automated Decision

Technology Insight 2.2

People–Machine Collaboration: To ensure such collaboration, it is necessary to train people to

A I Applications in Financial Services

AI in Human Resource Management

AI in Human Resource Management

HRM= human resource management

AI in Marketing, Advertising, & CR M

AI in Marketing, Advertising, & CR M

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