The Machine Learning Times (previously Predictive Analytics Times) is the only full-scale content portal devoted exclusively to predictive analytics. It has become a standard must-read and machine learning professionals’ premier resource, delivering timely, relevant industry-leading articles, videos, events, white papers, and community.

In this month’s featured article, Eric Siegel, Ph.D., executive editor of The Machine Learning Times and founder of the Predictive Analytics World and Deep Learning World conference series, discusses the pitfalls of predictive analytics in his article, “Why Operationalizing Machine Learning Requires a Shrewd Business Perspective.”

In his article, Eric warns, “Predictive models often fail to launch. They’re never deployed to drive decisions. This is ultimately a management error. We must pursue the business of machine learning only so that it delivers the business value of machine learning.” and goes on to illustrate how “the analytics and number crunching alone do not determine what to actually do with a model’s predictions – only business acumen can dictate how to best deploy a model.” 

Eric also mentions my new book, “Digital Decisioning: Using Decision Management to Deliver Business Impact from AI,” stating “This comprehensive book guides you to leverage the potential of machine learning. It delivers the business-level finesse needed to ensure predictive models are operationalization-ready. It lays the groundwork and sets the standard. It’s a great place to start… and to finish.”

I encourage you to check out Eric’s article and order your copy of “Digital Decisioning: Using Decision Management to Deliver Business Impact from AI” from Amazon today.

It’s been a while since I posted a job but  BenjaminBaer@fico.com has an open spot if you are interested in marketing decision management technology.

– James

Director, Portfolio Marketing (Decision Management – Decision Technologies)

The Opportunity

Are you looking for a career where you can orchestrate, execute and support the go-to-market strategies for FICO’s platform, products, and solutions? Then look no further – the Portfolio Marketing role is for you.

FICO’s Decision Management practice represents our core set of cloud-ready, platform technologies for FICO’s B2B offerings for financial services, and insurance, as well as other industries across the globe. As Director of Portfolio Marketing, you’ll be responsible for the messaging, positioning, and enablement of FICO’s products and solutions, and for driving the strategy for integrated campaign management. This position focuses on FICO’s core decision technologies including FICO Blaze Advisor/Decision Modeler, Strategy Director, and Decision Central, which are all essential to businesses seeking to transform through centralized decisioning, operationalizing AI, and other decision-centric strategies.

What You’ll Contribute

• Design and validate the business plan for bringing FICO’s portfolio, capabilities, and product/solutions to market. Articulate FICO’s decision technology value proposition in the context of broader FICO initiatives, as well as contextually within specific customer industries or solutions (working collaborative with Risk and other teams as appropriate).
• Craft positioning, messaging and value propositions that resonate with specific audiences. Understand influencer and buyer personas and how they buy, to inform campaigns, content, and innovation. Prioritize and localize messaging for specific regions and industry impact. Create content that is reflective of positioning and messaging, and that maps to stages of the buyer journey – and that also helps accelerate deals.
• Engage with multiple constituents – field marketing, digital, analyst relations, sales and pre-sales, product management, public relations, community, customer advocacy and partners – to help validate, review, and deploy content for those specific uses.
• Continually validate personas and build out customer journeys for the decision technology product areas, and work with other portfolio marketers to collaborate on efforts that also leverage decision technology (e.g., Platform, Decision Optimization, Auto Finance, Telco, etc.).
• Manage competitive analysis, both at the core product level, as well as FICO’s overall DMS/Platform level (working closely with other DMS portfolio marketers).
• Drive marketing new product introductions and define strategy for content distribution and adoption of our decision technology offerings. Help manage product naming initiatives, track analyst reports that correlate with emerging decision technology and related topics and collect and share market data as it becomes available.
• Working closely with the FICO DMS Community Manager, oversee the ongoing development and expansion of the Decision Technology group in the FICO Community, including developing blogs/vlogs, release content, product and industry pages, and other specific content as it adds value for our extended user and prospect community.
• Develop and execute a plan for developing and delivering product demos, leveraging SMEs such as product managers, pre-sales consultants, and others.
• Grow and defend market share of offerings via knowledge transfer, content, and programs for internal stakeholders – in particular, sales partners.

What We’re Seeking

• BA, BS or MBA in a related field, with at least 10 years of relevant product, solution, and/or portfolio marketing experience.
• Demonstrated ability to effectively collaborate with a variety of stakeholders, from technical resources to C-level executive management.
• Solid understanding of and experience within any or all of decision management, analytics, data science, and platform technologies.
• Ability to serve as an ambassador and evangelist for decision technologies with both internal and external stakeholders.
• Ability to rapidly brainstorm and develop content, often under tight time constraints, for a variety of uses.
• Proven ability to rapidly shift directions when business priorities change, and also consistently rebalance work priorities to ensure tight alignment with other constituents.
• Software skills: Word, PowerPoint, Excel, Camtasia and Salesforce.

Cassie Kozyrkov – Head of Decision Intelligence at Google- has a great piece on 12 Steps to Applied AI. As usual she’s got lots of great tips. I don’t have anything to add to her more technical steps but I want to add some commentary on Step 0 and Step 1.

Let’s start with her Step 0 thoughts:

Check that you actually need ML/AI. Can you identify many small decisions you need help with? Has the non-ML/AI approach already been shown to be worthless? Do you have data to learn from? Do you have access to hardware? If not, don’t pass GO.

Great focus here on operational decisions (small, transaction-level decisions you make many times) not on big, one-off decisions. Also good to make sure you don’t have a non-ML/AI approach that will work. I would say it differently – “Has the non-ML/AI approach already been shown to be sub-optimal (rather than “worthless)” – as we see a lot of clients where adding some ML/AI boost results without the need to replace the old approach completely.

…leaders who try to shove AI approaches where they don’t belong usually end up with solutions which are too costly to maintain in production. … If you can do it without AI, so much the better. ML/AI is for those situations where the other approaches don’t get you the performance you need.

Yup. Nothing to add.

The right first step is to focus on outputs and objectives.
Imagine that this ML/AI system is already operating perfectly. Ask yourself what you would like it to produce when it does the next task. Don’t worry how it does it. Imagine that it works already and it is solving some need your business has.

We have a game we play to do this. We call it the “if only” game. We ask business owners to fill in the blank in the following sentence “if only we knew BLANK we would decide differently”. This let’s them imagine that some ML/AI algorithm can magically produce the insight they need. Exactly as Cassie suggests, focusing on your objectives and what outputs from ML/AI would help.

Moving on to Step 1: Define your objectives she says

Clearly express what success means for your project. …
How promising does it need to be in order to be worth productionizing? What’s the minimum acceptable performance for it to be worth launching?

Pro tip: make sure this part is done by whoever knows the business best and has the sharpest decision-making skills, not the best equation nerdery. Skipping this step or doing it out of sequence is the leading cause of data science project failure. Don’t. Even. Think. About. Skipping. It.

Critical to this step for us is building a decision model. With a model of the decision making – the current approach for sure and perhaps also a model of your intentions – it is much easier to identify specific ML/AI opportunities and to define how promising it has to be – how predictive – and to capture the minimum acceptable performance. We have had some real-world problems were very low levels of accuracy were good enough (“better than 50/50”) and others where it had to be pretty accurate (“if it’s not better than 95% accurate we won’t use it at all”). Don’t guess, build a model and know.

And how do we build these decision models? Well we ask the person who “knows the business best” how they decide. And, as Cassie says, not doing this is the leading cause of failures so don’t skip it! I wrote this post on analytic failures – some are acceptable, even inevitable given the nature of analytics. But many are avoidable just as Cassie says.

For more on this why not check out our brief on Succeeding with AI?

The Decision Management team at Gartner (Rob Dunie , Roy Schulte, Derek Miers , Pieter den Hamer , Paul Vincent , Marc Kerremans and Erick Brethenoux ) have recently published a new paper entitled “Should Your Project Use a Decision Management Suite?” [Gartner subscription required].

It’s a great paper and I strongly recommend it if you have access. The quotes below are from the public page with a few additional notes from me. If this is a topic that interests you, check out the Decision Management Systems Platform Technology Report.

Decision management suites are very useful for implementing software that makes business decisions, although other products are sometimes better — depending on your business requirements. Data and analytics leaders should consider the issues highlighted when selecting tools for decision making.

Key here is the focus on data and analytics leaders – Decision Management and Digital Decisioning are essential components in an analytics strategy.

Use Decision Management Suites to Automate or Augment Operational Decisions

The focus on operational decisions – decisions about a single transaction – are central. There’s a whole set of use cases in the Report.

Use ML, Stream Analytics, Optimization or Other AI Techniques for Decisions That Require Runtime Analytics

I would note here, as I do in my new book on Digital Decisioning, that these advanced analytic techniques are best injected into real-time or runtime environments using decision management tools and techniques.

Decision Management is a proven approach for delivering Digital Decisioning and injecting machine learning and other AI techniques into your operational systems. Check out the new book for more details and a set of best practices and advice on how to get Decision Management done.

Digital Decisioning: Using Decision Management to Deliver Business Value from AI

There is an artificial intelligence (AI) revolution underway in enterprises across the globe as companies continue to adopt predictive analytics, machine learning and other AI across their businesses. This revolution puts managers and executives under enormous pressure to use AI to run their businesses more effectively. How do they do this? Will people lose their jobs?  Most importantly, how will they become beneficiaries rather than victims of this new AI economy?

The speed, volume and complexity of decisions – as well as the impact they have on customer experience – demand automated, real-time decision making. Digital decisioning is an emerging best practice for delivering business impact from AI, machine learning, and analytics. Digital decisioning is an approach that ensures your systems act intelligently on your behalf, making precise, consistent, real-time decisions at every customer touchpoint.

Visit our YourTube Channel to view the webinar.

Next Session November 18-20, 2019
Three 2-hour sessions with homework.
12:30 pm – 2:30 pm ET

Decision modeling with the Decision Model and Notation (DMN) standard is fast becoming the definitive approach for sustained business engagement, improved traceability and flexible and analytic enterprise applications.

With decision modeling, you can:

• Re-use, evolve, and manage business rules.
• Effectively frame the requirements for analytic projects.
• Streamline reporting requests.
• Define analytically driven performance dashboards.
• Optimize and simplify business processes.

This 3-part online live training class taught by leading expert James Taylor, CEO of Decision Management Solutions, will prepare you to be immediately effective in a modern, collaborative, and standards-based approach to decision modeling.

You will learn how to identify and prioritize the decisions that drive your success, see how to analyze and model these decisions, and understand the role these decisions play in delivering more powerful information systems.

Each step is supported by interactive decision modeling work sessions focused on problems that reinforce key points. All the decision modeling and notation in the class is based on the DMN standard, future-proofing your investment in decision modeling. Decision modeling is also a Technique in V3 of the BABOK® Guide by the International Institute of Business Analysis (IIBA).

Click here for more information and to register.

Course Details

1. Decision Modeling Basics
   1. Introduction to Decision Model and Notation
   2. Core elements of decision models
   3. Essential Decision Properties
2. Decision Requirements Modeling
   1. Modeling Decision Requirements
   2. Elicitation, Verification and Completion
   3. Additional Decision Properties
3. Applying Decision Modeling
   1. Business Rules and Decision Modeling
   2. Analytics and Decision Modeling
   3. Driving the Requirements Process with Decision Modeling
4. Getting started and next steps

McKinsey recently reported that “Most carriers are struggling to meet their cost of capital, and productivity has barely moved over the past decade” and that “The insurance industry is facing a serious structural challenge … the majority of carriers are not making their cost of capital.” Growing productivity by improving operations is an essential ingredient in insurance carriers’ business strategy. Digital technologies in insurance have been focused on digitizing data and processes. They have made little impact on productivity because insurance is a decision-centric industry. Without digital decisions, productivity will remain flat.

Watch the recording of this webinar with me and insurance industry expert Craig Bedell as we discuss the importance of digital decisioning to improving insurance productivity. Learn digital decisioning integrates your existing technology investments with machine learning and AI to drive increased productivity in everything from underwriting to claims handling, and pricing to next best offer.

In January of this year, Wired Magazine published an article about a collaboration between The Department of Veterans Affairs (VA)  and Google parent Alphabet’s DeepMind unit to create software powered by artificial intelligence that attempts to predict which patients in the intensive care unit (ICU) are likely to develop acute kidney injury (AKI). The article stated that more than 50% of adults admitted to an ICU end up getting AKI, which is life-threatening.

According to the article, the Department of Veterans Affairs contributed 700,000 medical records to the project. The goal of the project was to test whether artificial intelligence could be developed to help doctors better predict which patients were at risk for developing AKI so preventative measures could be taken sooner.

Fast forward to the August Volume of the journal Nature and the article “A clinically applicable approach to continuous prediction of future acute kidney injury”. It looks like artificial intelligence may in fact be able to help doctors identify which patients in the ICU are at serious risk of AKI. This study shows that artificial intelligence can predict kidney failure up to two days before it occurs. During the research study, the software was able to predict nearly 56% of all serious kidney problems and approximately 90% of those problems serious enough to require dialysis.

The work is still in the early stages — there were two false positives for every true positive — but it certainly advances what’s known about how deep learning may be helpful in clinical healthcare practice.

According to Dr. Dominic King, DeepMind’s health lead and coauthor of the research paper, kidney issues are particularly tricky to identify in advance. Today, doctors and nurses are alerted to acute kidney injury via a patient’s blood test, but by the time that information comes through, the organ may already be damaged; making him hopeful for the long-term value of these types of predictive solutions. The team hopes a similar model can be developed to identify other major causes of disease and deterioration, including life-threatening infection sepsis.

I live in Palo Alto – within walking distance of Google and the home of the VA hospital that an article in the Financial Times identified as the planned location for a clinical trial of this algorithm. I also have a particular interest in how to develop effective clinical decisioning systems. At Decision Management Solutions we have done a couple of interesting prototypes and recently written a paper for the Department of Health and Human Services on this topic.

The value of a prediction like this is that it could help medical professionals better triage patients and get those who require intervention on a treatment plan right away. Doing so could potentially save hundreds of thousands of lives each year and lessen the need for invasive, uncomfortable treatments such as dialysis or kidney transplant. The prediction itself cannot do this – it’s just a prediction – but acting on the prediction can. Making the prediction readily available to medical professionals MIGHT change their behavior. If they understand the prediction, if the prediction is clearly explained, if there is nothing about the patient that triggers their own personal experience, if their first few cases aren’t false positives… if, if, if.

To take advantage of this kind of prediction, it needs to be embedded into a clinical decision support framework. Working with clinicians, you can develop a model of how they do triage for patients today and how they select appropriate treatments for a patient. This model will be different in each clinical setting – the VA is likely to do this differently from your local hospital network, for instance. The availability of facilities, distance to them, organization of specialties and much more go into this decision. And if the decision about triage requires medical judgment that can’t be automated, this too can be input to the system.

With a clear understanding of the decision, you can improve it using the prediction. The medical professionals can see how they would change the decision given the prediction, its accuracy and its false positives. Instead of simply showing them the prediction and hoping they will change their decision, the system can change its recommendation in alignment with their approach.

Remember, AI, Machine Learning and predictive models don’t DO anything – they just make predictions. If you want to save lives (or engage customers, prevent fraud, manage risk or anything else), then you have to make decisions with those predictions.

Maybe I should drop by the VA and tell them…

In May, 2019 the analytics community lost a true pioneer. I met Robert Hecht-Nielsen in 2001 when the company he co-founded, HNC Software, purchased the Blaze Advisor business unit of Brokat Technology, where I worked. The following year, HNC Software was acquired by the company now known as FICO. He was well known to all for his red suspenders, bald head, and beaming smile.

Robert was a pioneer in the field of neural networks. He wrote the first textbook on the subject, Neurocomputing, in 1989. In 1986, he co-founded HNC Software, a neural networking startup in San Diego, based on his breakthrough work in predictive algorithms. HNC was perhaps the first start-up in the neural network/machine learning space to be significantly financially successful. The company’s flagship product, Falcon® is used all over the world to detect fraudulent debit and credit card transactions. Falcon was, I think, the earliest example of automated decisioning as a service for fraud detection using neural networks and in-memory profiles.  I believe it was first commercially available in 1994 and based on its success, the company went public in 1995.

In July, many of my former colleagues attended a celebration of Robert’s life. I was unable to attend, due to a trip to Asia, but was touched by some of the stories and wanted to share a summary here. In addition to his many years at HNC, Robert was also an adjunct professor of electrical engineering at the University of California San Diego. The memorial was a mix of family, HNC alumni, and former graduate student advisees. All of the stories from Robert’s oldest granddaughter to his students and his former employees shared these common words of advice:

1. Study a hard science like math or physics; you’ll learn business when you’re doing it
2. Learn how things work; don’t just put gas in your car, learn how thermal dynamics works
3. Read the economist (he quizzed his students on it regularly)
4. If you have the option to take the easy path or the hard path, take the hard path because you’ll learn so much more.

Everyone spoke about how generous Robert was with his time. There was one story in particular that summed Robert up for me. A gentleman got up to speak at the celebration. Here’s what he said.

Hi. My name is Quinton. Most of you don’t know me. I met Robert in 1998 when I was an air conditioning technician at the HNC office. I had just gotten out of the Marines and I was thinking about going back to school. I was up in the vents when Robert came back into his office. I shouted down an apology that I was just finishing up. When I got down out of the vent, he invited me to sit down. We talked for two hours (everyone in attendance laughed). He passed along all of the advice everyone has mentioned today. He literally changed the trajectory of my life. I didn’t speak to him again until 2012. I saw an article about him and sent him an email at his UCSD address to thank him for that day in his office. He emailed me back and invited me to his home in Del Mar. Since that day in Del Mar we met at least once a quarter for the rest of his life. I am now an entrepreneur, something else that Robert was very passionate about. I own a medical device company. I have no idea what my life would look like today if I hadn’t met Robert.

One of the key benefits of decision management is its focus on operational decisions. Diving into these operational decisions further, you can typically identify several micro-decisions that, when improved, will dramatically affect business performance.

“Micro-decisions” are the decisions made transaction by transaction, customer by customer. Companies often fail to recognize these as individual decisions, instead lumping them into bigger ones. For instance, instead of identifying that each price offered to each customer is a micro-decision, they consider “pricing” as one big, strategic decision. Failing to consider these micro-decisions as separate decision-making opportunities means you are unable to fully leverage the personalization or targeting of these micro-decisions to individual customers. This in turn means you cannot take advantage of all that lovely data you have about customers, or reward customers based on loyalty metrics, or….

Even if you don’t want to completely automate a micro-decision, it would be wise to think about using Decision Management to reduce the range of options available to a human decision-maker, or at least rank the available options by likely effectiveness. A decision service can be used to either fully automate a micro-decision or provide support for human decision-making, as described. It is also important to match these micro-decisions to objectives and to measure them so they can be improved over time.

Micro decisions are made often, typically thousands of times a day. This means that any improvement in the effectiveness of these decisions has an outsized impact. Even a small increase in profitability, customer retention or net promotor score resulting from a micro decision scales up -its value is multiplied by the thousands of such decisions you make. The total impact often exceeds much more “strategic” decisions.

Decision Management and micro-decisions are a great way to gain a macro impact.

Like many of you I am awash in digital photos and have been trying to find a good way to manage them. For various reasons I picked Amazon Photos. One of the key benefits was the family vault – a way to let several people upload photos to a shared space. Of course, another reason is to take advantage of Amazon’s facial recognition AI.

So the good news is that both of these seem to work. The shared files are managed nicely on AWS (no surprise that Amazon can do this) and the AI does a pretty good job of recognizing faces and letting you edit this when it makes mistakes. So far so good.

But the facial recognition is account by account and there’s no way to use it in the family vault:

I can look at my photos and identify faces in them. The other members of my family can look at their photos and do the same.

But we can’t say that these two people are the same. I can’t even use the faces they have identified when looking at a family member’s photos – only they can.

Plus there’s no way to see all the photos the family has of a particular person. Which was kind of the point of the family vault.

So why do AI programmers smart enough to do facial recognition fail to realize that they should make this work across a family vault? I suspect because like far too many AI programmers they are focused on the technology. Their success criteria is to make the technology solve a technical problem – identifying faces – not solve a business problem – managing a photo collection.

If you want your AI programmers to focus on the business problem and not the technical problem, check out this paper on our DecisionsFirst™ approach for success with AI.

I noticed the other day that my phone, which used to have a relatively sophisticated (if horribly complicated) “do not disturb” approach had reverted to only allowing a simple version. Online, many users complain that now they can’t really use it because it’s too “dumb” regarding when it rings and when it doesn’t. How did it come to this? Why did the feature get removed? Because business rules broke it.

The old approach let you specify business rules. You started by specifying rules about being asleep or in meetings and then you started adding exceptions. But this gets complicated quickly. How does a phone do all the things real people need it to do?

For example, don’t ring:

• When I am in meeting, unless the caller is my significant other and it’s the second time they have called in the last 5 minutes
• Unless it’s one my kids and this the third time they have called, unless I am driving because then I can’t switch to the incoming call from the dial in anyway
• When I am at home, unless it’s someone that I call regularly or a favorite, unless I am asleep
• If I am driving and on my headset
• Unless I’m not in a meeting; but if someone important calls, answer, but otherwise don’t
• Unless it’s my emergency contact calling for the third time in five minutes, then ring even if I am not using my headset

You get the picture. Too hard to do effectively manage in a phone interface. Trying to use rules to solve this problem broke the feature.

But what if you thought about decisions instead of rules? Check out this decision model I came up with:

• The phone needs to decide what to do (ring or not)
• To do that it needs to decide where you are, what’s happening, who’s calling and how persistently are they calling
• It can do all of these by itself using things it knows (sensors), basic settings (sleep hours, calendars), contact info that you already have and the call log
• All you would have to do is specify a simple decision table to say given the set of conditions you wanted it to ring or not ring

Of course there’s some UI design to see how best to capture this decision logic (a table, reasons to mute then reasons to ring or what) but the logic would be simple because of the sub-decisions.

To learn more about Creating Agility and Operational Efficiency with Decision Modeling, read this whitepaper.

Ron Ross recently posted a question “What Happens When Behavioral Business Rules and Decision Logic Collide?” in which he asks whether a behavioral rule or decision logic should “win” when they disagree. The problem is that this is the wrong question.

Take his example about a city charging for its facilities. The behavioral rule is “A senior citizen must not be charged a recreational fee for use of facilities.” The decision logic is a table shown in this image:

But this table is clearly wrong – if Senior Citizens should not be charged recreational fees than this logic is incomplete/inaccurate. Asking if this should “win” relative to the behavioral logic is a pointless question – the logic is broken. This table is just the default or generic calculation and the point of a decision is to decide for any SPECIFIC transaction not for a GENERIC one.

The right question is to ask how the city decides on recreational fees. One of the decisions in this model would be to calculate the base hourly fee. Others would be to identify exclusions (I bet Senior Citizens are not the only exception) and discounts. Each decision would be described by appropriate decision logic. The overall decision model would then decide on the fee correctly in all circumstances.

Ron argues that adding exceptions to decision tables complicates them. Well it can, especially if you do it wrong or build one great big decision table. A decision model handles them just fine.

So, my answer to Ron is simple. Build the right decision logic and then you won’t have to answer the question.

I recently wrote a blog over on Decision Management Solutions’ blog called 5 Reasons to fire your rules consultant to highlight the worst offences of business rules consultants. Here’s the list:

1. They want to do rule harvesting
2. They call it a rule engine
3. They put off business user enablement to phase 2
4. They smush process and rules in one project
5. They want to use ORs, ELSEs, ELSEIFs…Oh My!

Read the full post over on the Decision Management Solutions blog and subscribe to our newsletter for more articles like this in the future.

Ryan Trollip, CTO of Decision Management Solutions, and Charlotte DeKeyrel, one of our experienced decision modeling consultants, and I are all going to be at IBM THINK February 11th – February 14th, 2019 in San Francisco. Ryan and I are speaking on Thursday and you’ll find us at events involving Decision Management and IBM’s decisioning products like ODM, Watson Studio etc.

If you are going to be there and would like to talk Decision Management and digital decisioning, get in touch – info@decisionmanagementsolutions.com. We’re doing some great stuff with the IBM product stack and would love to share our DecisionsFirst™ approach to see if its a fit for your problems.

I am speaking with Ryan Trollip, CTO of Decision Management Solutions, and Stephane Mery of IBM on Delivering Excellent Customer Experiences with Analytics and Automation at IBM THINK.

Many customers are struggling to deliver consistent digital experiences across customer channels and touch points. Adopting a decision-first approach is a step in the right direction to provide this consistency and decisioning support over the entire customer journey. Operational decisions are mixing business rules, analytics and machine learning. This talk will share some use cases and illustrate how decision modeling can be used as a framework to inject AI into your business operations.

Come hear us discuss a proven approach to delivering digital decisioning that operationalizes predictive analytics and positions you for success with ML and AI.

I have known Tom for many years and enjoyed his books. He recently sent me a copy of his latest one – The AI Advantage: How to Put the Artificial Intelligence Revolution to Work (Management on the Cutting Edge).

Tom does his usual excellent job of introducing a technical topic – AI and machine learning – and focusing on what business leaders need to know about it. While he has a chapter on the various approaches to adopting AI technology, the book’s key message is that a technology-first approach to AI is a bad idea. Instead of technology-led “moonshots”, enterprises should use AI to solve practical, immediate, operational problems.

The book begins with a discussion of the role of AI in the enterprise and surveys what companies are doing today – both successes and failures. It was particularly refreshing to see failures discussed and Tom does a nice job of using some of these failures to illustrate how best to approach AI. He believes AI is going to transform companies, albeit perhaps more slowly than some believe, and encourages companies to identify a coherent AI strategy. He provides some good material on the elements of an AI strategy and outlines how different companies might take different approaches.

The biggest takeaway from the book is that success will not come from “moonshots” but from a more practical approach. As Tom says:

There are relatively few examples of radical transformation with cognitive technologies actually succeeding, and many examples of “low hanging fruit” being successfully picked

In our experience this is critical. Taking a big “we’ll just use AI” approach rarely works. Developing a comprehensive approach to a decision that mixes and matches AI with other technologies like descriptive analytics, predictive analytics and business rules works much better. Tom recommends that companies develop a series of less ambitious applications in the same area that in combination have a substantial impact. Each is less risky than a moonshot and you will have time to adapt to each piece. But, when combined, the overall impact is high.

We like to do this by building a decision model to break down a specific collection of closely related business decisions into their component sub-decisions. Some of these sub-decisions will be best done by people, some can be codified as business rules and some will need ML or AI. This lets you identify a set of smaller, less ambitious AI decisions and shows you how they will contribute to an overall more effective decision.

As Tom says:

Given all the media and vendor hype in the cognitive technology space, companies often feel pressure …to take on a cognitive project. It’s much better for a company to try and see beyond marketing blandishments about AI and to create the best fit with the organization’s strategy, business model and capabilities.

That requires that you really understand how you make decisions and how (and where) AI can help. Our experience is that a design thinking approach to decisions – DecisionsFirst Design Thinking as we call it – let’s you redesign the decision-making and take advantage of AI. Too many companies have used AI to “pave the cow path” by automating existing work process (particularly true with RPA technology). Really taking advantage of AI will require structured and controlled re-thinking of your decision-making.

Usefully for business executives, he provides a very accessible survey of the capabilities of AI:

• Create highly granular predictive and classification models
• Perform structured digital tasks (RPA)
• Manipulate information (OCR and data integration)
• Understand human speech and text
• Plan and optimize operations
• Perceive and recognize images
• Move purposefully and autonomously around the world
• Assess human emotions

For each of these he provides a concrete discussion of how they might reasonably be used, not in the future but now – discussing in passing how work is likely to need to be redesigned to take full advantage of these technologies.

He also discusses how, while ML and AI represent an extension of the world of advanced analytics, they also differ from traditional data mining and predictive analytic approaches in 3 ways:

• They are usually more data intensive and detailed, limiting when they can be applied to scenarios where there is a lot of data
• They need therefore to be trained on a subset of the data because there is so much available.
• They can learn continuously as data is fed through the resulting algorithm, rather than waiting for the next formal update.

AI and ML can be used in many of the same circumstances that predictive analytics and data mining can be used. Think of them as both an extension of these techniques and as something distinctly different.

In later chapters he talks about jobs and skills in a world where AI is increasingly pervasive and about some of the social and ethical issues such as transparency and bias. As he says:

As cognitive technologies are developed, organizations should think through how work will be done with a given new application, focusing specifically on the division of labor

He has a good discussion of transparency and our experience has been that considering AI as one part of the solution, mixing more opaque AI with more transparent business rules for instance, really helps. In addition, new technologies such as LIME and AI Open Scale help explain AI model results in a way that can be combined with the explanations produced by these other more transparent technologies.

One of the themes in the book is the challenge of getting AI to really affect an organization’s core business operations. In a cognitive-aware executive survey conducted by Deloitte, for instance, 47% said it was “difficult to integrate cognitive projects with existing processes and systems”. As Tom points out, this integration is essential if you want to make a real impact. This matches a recent McKinsey survey that found analytic “leaders” investing much more heavily in this “last mile” integration than others. A Decision Management platform -a digital decisioning platform as some call it – is a key ingredient in tying advanced analytics, ML and AI into your day-to-day operations.

Finally, from a Decision Management perspective, Tom has some great illustrations of the value of a decision-centric approach and of how AI is integrated into an overall approach. Early in the book he quotes Jeff Bezos’ Letter to Amazon Shareholders from 2017 (my emphasis added):

But much of what we do with machine learning happens beneath the surface. Machine learning drives our algorithms for demand forecasting, product search ranking, product and deals recommendations, merchandising placements, fraud detection, translations, and much more. Though less visible, much of the impact of machine learning will be of this type – quietly but meaningfully improving core operations.

“Quietly but meaningfully improving core operations since 2002” could be a motto for Decision Management! That’s the focus of Decision Management and always has been. In that sense, machine learning (ML) and AI represent powerful new tools for doing what we have always done rather than something requiring a radically different approach. Tom even makes this point, identifying how rules-based systems have been addressing many of the scenarios for which AI is being considered. Like Tom, we see potential in combining these rules based and machine learning approaches to produce adaptive systems.

I will end with one of Tom’s quotes from early in the book:

The businesses and organizations that succeed with AI will be those that invest steadily, rise above the hype, make a good match between their business problems and the capabilities of AI, and take the long view.

This is not a book that is going to add to your technical knowledge about AI but it’s a great book for business executives and for those who want to think more deeply about how AI will change their business. You can buy it here The AI Advantage: How to Put the Artificial Intelligence Revolution to Work.

We’ve blogged recently about some of the challenges in analytics and AI – How More Companies Can Maximize the Potential of Analytics and 80% of insurance carriers aren’t delivering high impact analytics – building on some great McKinsey research. They recently published another article, this time targeted at Chief Analytics Officers – Rebooting analytics leadership: Time to move beyond the math.

This was a great article. First, I loved that it made it clear Chief Analytics Officers should think about AI and Analytics together. This is key as it focuses AI on decision-making (where analytics is already focused) not just conversational AI. It’s not that chatbots aren’t useful, they’re just REALLY different from decision-making AI and are better thought of as user experience technology.

I was also glad to see them identify the things you can’t rely on to drive analytics/AI success like being “born digital”, having an analytical CEO or being in an existential crisis that drives people to act. You need to be able to succeed even when these things are NOT true.

The whole paper for me was summarized by this one great customer quote:

just getting the math right doesn’t drive the change

So true! McKinsey had some great suggestions that align with what we have seen work in our customers

• Build a coalition of equals across the business/operations, analytics and IT.
  • This means you need ways to talk about the problem everyone understands – not math but decision models.
• Put business value front and center and align analytics opportunities and innovation with the business unit’s vision and priorities.
  • Identify the business’ key metrics, find the decisions that will improve these metrics if they are improved. Focus on those decisions.
• Focus on IT as a strategic partner rather than simply as an execution arm.
  • Engage them early to think about the last mile deployment of analytics.
• Heavily invest in integrating advanced analytics into the workflow.
  • We use decision-centric design thinking to get the decision model the business need, build analytics to support that and then use the decision model and a modern Business Rules Management System to push that decision into systems and processes.
• Be a change agent and advise boards and executives on what’s possible.
  • Don’t let those executives throw-up their hands and say “I don’t understand AI so do what you want”. Make them work for it!

Our DecisionsFirst approach is exactly what you need to succeed as a Catalytic CAO so if you are a Chief Analytics Officer, or want to become one, check out our Chief Analytics Officer resource page or contact us to chat.