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FOR MANAGERS AND INNOVATORS

 THE
PERFECT
ARTIFICIAL
INTELLIGENCE
GUIDE

Ÿ How Articial Intelligence

Generates Economic Value

What managers,
intrapreneurs, entrepreneurs Ÿ The Frameworks of
Articial Intelligence
and innovators need to know Innovation
to start getting business
results with Artificial Ÿ The Technological
Infrastructures That Enable
Intelligence Articial Intelligence

Ÿ The Meaning of the 50

Most Used Words in
Articial Intelligence

INNODEMIA San Jose, California ,

The Perfect Articial Intelligence Guide for Managers and Innovators | 1

 PAOLO MESSINA
Phd, MBA

“Some people call this articial intelligence, but the reality is this
technology will enhance us. So instead of articial intelligence, I
think we'll augment our intelligence.”

Ginni Rometty IBM CEO

“I’m increasingly inclined to think that there should be some

regulatory oversight, maybe at the national and international
level, just to make sure that we don’t do something very foolish. I
mean with articial intelligence we’re summoning the demon.”

Elon Musk Tesla Motors CEO

The Perfect Articial Intelligence Guide for Managers and Innovators | 2

 HOW ARTIFICIAL INTELLIGENCE
GENERATES ECONOMIC VALUE
What it is
Labour cost reduction Reduction of production costs by
eliminating human working hours
Monetizing Enterprise Using articial intelligence to
create value from existing data:
Data Assets process improvement,
empowering customers to
monetize data intelligence,
increasing customer retention
providing data services.
Improve User Experience Personalize product offerings,
optimize the quality of content,
extend the user interface to audio
and other forms of augmentation,
dene an interactive sequence of
user interactions that differ from
user to user e.g. the pattern for the
expert user versus the pattern for a
beginner user.
Productivity improvements Generally increase an industrial
process throughout
Employee Satisfaction Adopt solutions that reduce or
mitigate fatigue for particularly
consuming jobs
Cost to go to The adoption of various
automation in the marketing
Market/advertising channel to reduce the cost to
acquire and extend the life value
of a customer.
Risk mitigation: The adoption of AI to multiply the
study of new product introductions
New Product Development or drastically reduce the cost and
time to dene new products.
The Perfect Articial Intelligence Guide for Managers and Innovators | 3
Why it is relevant
It is a quick and economic win and
understanding use cases in this
area can generate opportunities.
It is a path of monetization that
can be applied in traditional
industries for getting a quick win
It produces tremendous value for
the end customers in that it makes
the interaction with the machine
more personalized and
contextualized. At the same time it
creates the opportunity for the
enterprise to learn more about the
specic customer and gain
business insights on specic
customer groups.
Understanding this value driver
and use cases in this area is
crucial to reduce risks in industries
where new product innovation is
crucial but also very risky.
This is a very important area for
companies interested in
increasing the quality of their work
environment and getting a
reputation as top employer
This is the oxygen of business. It is
a key area of AI application.
Understanding this value driver
and use cases in this area is
crucial to reduce risks in industries
where new product innovation is
crucial but also very risky.
 What it is
Supply Optimization The adoption of AI to make the
supply of a service or good more
rational so the service or good is
not wasted.
Next Generation It is the process not only to forecast
Inventory Management Demand, but to proactively feed
information such as visual and
RFID into a cycle to understand
how to improve each and every
stage of inventory management.
For example, it is like nding items
in the shelves of a retail chain.
People Task process It is the intelligent routing of
optimization personnel and their job tasks in a
complex ecosystem.
Why it is relevant
Think Amazon fresh or Uber, they
have a supply that they cannot
waste. This concept applies to
other industries and managers
should have a clear view of how it
could be benecial in their
ecosystems.
It is important for managers
working in industries where
inventory is delivered and
managed in various stages.
This is the most common
application of process
optimization and could have
unprecedent applications in your
own contest. Studying use cases in
this area will serve as a platform to
generate ideas that can be of
application in your reality.
 THE FRAMEWORKS OF ARTIFICIAL
INTELLIGENCE INNOVATION

Assisted Intelligence Augmented Intelligence

It is the use of AI to It is the use of AI to

improve productivity of an create experiences that
existing process without were not possible
necessarily changing before.
them.

Understanding this Understanding this

framework helps identify framework helps identify
opportunities for quick a class of potential
wins in a company. applications that
drastically improve
productivity

Autonomous Intelligence

It is the use of AI to drive

decisions without having a
Human in the loop.

Understanding this
framework helps identify
opportunities and
constraint to completely
eliminate a human from
a process.

The Perfect Articial Intelligence Guide for Managers and Innovators | 5

 THE TECHNOLOGY INFRASTRUCTURE
THAT ENABLES ARTIFICIAL INTELLIGENCE

Machine to Supporting Supporting

Machine Data Handling Hardware
communication Ecosystem

What it is What it is What it is

It is the system of It is the system of different It is the type of computing

infrastructures that enable
an organization to
leverage algorithms and
infrastructure built by other
companies on demand.
This is typically referred to
A P I s ( A d v a n c e d
programmable Interfaces)
open source or paid
software solutions
developed to index and
process large amounts of
data. This is often referred
to as Big Data.
infrastructure necessary to
run machine learning
applications at scale.
Specically, here I refer to
processors and storage.

Why it is relevant Why it is relevant Why it is relevant

In todays world, machine It is important to make it It is important because not

learning solution often
require multiple layers of
algorithms. It is not always
the best choice to opt for a
"do it all at home".
Therefore, it is important to
understand the value to
outsource portion of AI
solutions to partners that
have specic expertise.
clear that machine
learning and AI require
enabling software
infrastructures to work.
That is a fundamental
dependency and this has
consequences in areas
such as budgeting a
project.
all applications are made
equal and sometimes it is
necessary to use
computational power that
would cost too much.
Therefore, projects maybe
not be feasible because of
OPEX reasons. This is a
concept that a manager
should master.

The Perfect Articial Intelligence Guide for Managers and Innovators | 6

 THE MEANING OF THE 50 MOST USED
WORDS IN ARTIFICIAL INTELLIGENCE

Term What It is

A sector of engineering concerned with giving software programs the ability to learn and
Machine Learning execute tasks for which no one has coded a specic execution protocol.

A sector of science and engineering concerned with extracting information and insights
Data mining from medium and large data sets.

A branch of science and engineering concerned with trying to give software programs
Articial intelligence cognitive abilities like human beings possess. The term is also refers to studies identifying
what intelligence is and how it works beyond human beings

This is a noun that today is used to describe the ecosystem of technologies and processes
Big data necessary to handle internet scale amount of data.

A sub sector of Machine Learning concerned with a relatively new approach to Machine
Deep learning Learning. This is an approach that uses a deep net of articial neural networks and in some
cases, it achieves far better results than other Machine Learning methods.

A process or implementation of Machine Learning where a software program learns to do a

Reinforcement learning task from its failures and successes. Basically, having an algorithm learning through carrot
and stick.

A process or implementation of Machine Learning where a software program not only

Continuous learning learns to do a task, but over time improves its ability to do the task as it learns from the new
data and processes it has performed.

A process within Machine Learning to teach a program a certain task through examples
Supervised Learning prepared and curated by scientists/engineers/practitioners.

A scripted programming language that's easy to use for everyone. It is the programming
Python language with ready to use Machine Learning algorithms.

It is a process of eliminating or cleaning some of the data from a data set because they are
Data Cleansing not reliant or could not be treated and ultimately would negatively affect the Machine
Learning process.

It is the process to make some modications to the data used in a Machine Learning or an
Data preparation analytics project. Usually it consists of simple math operations focused on making the data
more informative for the algorithms.

It is a sub process of supervised learning. It consists of attributing a label or more to each

Data Labelling entry of a data set, so that the software algorithm can use these data as examples to learn.

It is the process of simplifying a Machine Learning process by eliminating a number of

Dimensionality reduction columns in the initial data.

It is the process of identifying mathematical expressions that can be used to alter data input
Feature analysis for Machine Learning algorithms in such a way that the algorithm will be able to better solve
the problem at hand.

Model Training It is the process of teaching a software algorithm how to solve a specic problem.

The Perfect Articial Intelligence Guide for Managers and Innovators | 7

 Term What It is

It is an outcome of a teaching session where the algorithm learns one specic case very
Model Overtting well, but then fails to accomplish a larger set of cases.

It is the process of verifying that the model at hand is performing as per the expectations
Model testing (same, better, worse) by the programmer training the model.

It is a way to assess the quality of a process or algorithm. It conrms how many items
Precision selected by the process are correctly selected and how many are incorrectly selected.

It is a way to assess the quality of a process or algorithm. It complements precision. It

Recall conrms how many relevant items are selected out of all the relevant items selected.

Items selected as belonging to an ensemble which are not in reality part of the ensemble. It
False Positive is another way to assess the quality of a Machine Learning process.

Items that were not selected as part of an ensemble, but they should have been. Another
False negative complementary measurement of Machine Learning process quality.

It is a type or class of algorithms inspired by the human brain and consists of articial
Neural Network neurons connected to one another.

It is a sub-type of neural network algorithm, where the inputted data undergo a

Convolutional mathematical operation known as convolution. This is basically a trick to organise the
Neural Network information present into the data before having the articial neurons work on the data.

It is an operation that attributes a label to a sub set of data. At high level it is the operation
Classication that allows a software program to distinguish between animals and plants or between
bananas and oranges.

It is a mathematical operation that given a trend in time can extrapolate a trend in the
Regression future.

A process sometimes exemplied from a software algorithm that discovers groups of data
Clustering within a larger set of data

A process sometimes exemplied from a software algorithm, that discovers one or more
Outlier detection data in a set that looks different from all the other data (e.g. a black sheep).

A process, sometimes exemplied from a software algorithm, that achieves a result by

Heuristic applying a pre-dene rule. Sometimes it will work well but, generally it cannot deal with
variations in the data.

It is a process used to teach software algorithms how to solve a constant within the
Backpropagation algorithm starting from examples of labled data.

It is a mathematical operation that mimics the biological process of turning on a neuron in

Activation Function the brain. There are several types of activation functions.

It is a mathematical function used to optimise the ability of an algorithm to solve a certain

Loss function problem.

Nearest Neighbour It is a particular type of clustering where a software program divides a current data set into
classier multiple data sets by leveraging the reciprocal distance between the data.

The Perfect Articial Intelligence Guide for Managers and Innovators | 8

 Term What It is

It is a particular type of Nearest Neighbour clustering, where the number of clusters (k) is
K-means decided by a priori and is one of the inputs in the model.

It is a math process and type of software algorithm to predict what the likelihood of one data
Decision Tree to follow a certain behaviour pattern. E.g. will this customer default on credit? Will this
customer buy a black Ferrari?

It is a particular type of classication where a software program divides a current data set
Linear discriminant into two classes (e.g. Seniors with savings and Seniors with low savings) by utilising a
straight line to divide the two subgroups.

It is a particular type of classication where a software program divides a current data set
Rule Based Classier into two (or more) classes (e.g. Seniors with savings and Seniors with low savings) by
utilising a simple repetitive rule to divide the two subgroups.

It is a particular type of classication where a software program divides a current data set
into two (or more) classes (e.g. Seniors with savings and Seniors with low savings) by
Bayesian Classier utilising Bayes rule to divide the two subgroups. Bayes rule is a statistical rule that predicts
the outcome of events based on past events.

NLP It is short for "Natural Language Processing"

NLG It is short for "Natural Language Generation"

Natural Language It indicates an area of Machine Learning concerned with giving software algorithms the
Processing ability to understand human language.

Natural Language It indicates an area of Machine Learning concerned with giving software algorithms the
Generation ability to write human language, automatically.

It is a software that lets you or your organisation store les that are bigger than what's possible
Hadoop to store on one single computer or server and it allow you to process the data in the les.
Therefore, Hadoop accelerates the speed to process the data on each single cluster.

Spark is a software that lets you or your organisation process data as one of the functions of
Hadoop. However, Spark was created to handle the part of Hadoop that processes the
Spark streaming data, as they come into the data process pipeline. It is generally considered that
Spark increases the speed of this process.

It is a Google developed software environment that enables data scientists to prototype and
Tensor Flow develop Machine Learning algorithms quickly. It is used for applications that work on very
large data sets and when multiple types of Machine Learning functionalities are necessary.

It is a Google developed software environment for the simple development of deep

learning algorithms with minimal code. It is very good for delivering fast turnaround times.
Keras It is usually used for prototyping problems with relatively smaller data sets and by new
Machine Learning practitioners.

It is a Facebook developed software environment for Machine Learning algorithms, it has

Pytorch very good process debugging capabilities. Usually used for training users to debug
applications capabilities.

The Graphic Processing Unit (GPU) is a form of electronic computer processor that
specializes in processing large blocks of data such as those found in images, videos and
GPU long-time sequences. They have been particularly useful to train (teach) Machine Learning
algorithms and implement some algorithms. It provides signicant improvements in terms
of processing speed over CPUs.

The Perfect Articial Intelligence Guide for Managers and Innovators | 9

 Term What It is

The Tensor Processing Unit (TPU) is a form of electronic computer processor invented by
Google to perform mathematical operations common across deep learning. It provides
TPU signicant improvements in terms of energy efciency and processing speed over GPUs
and therefore, also CPUs.

Is a software process that allows a computer to identify and label the object or the objects
Image recognition contained within an image. E.g. dog versus Cat.

It is a software process that allows a computer to identify a box (or multiple boxes)
Object Detection containing a specic object (or multiple objects) within an image.

The Perfect Articial Intelligence Guide for Managers and Innovators | 10

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The Perfect Articial Intelligence

Guide for Managers and Innovators
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