AI for Managers – S.

Prof. Soumen Manna

Value Analysis Metrics

• The value of an idea can be measured in different dimensions.

• Ranking the items in the idea bank based on various metrics will help
the future decision makers get to the good ideas faster.

• Ideas should be ranked separately on various dimensions (metrics)

that enable filtering and prioritization.
Value Analysis Metrics
1. Time

• Each idea can be classified according to the time taken for the
development of an AI solution and the time needed to change
management structures and practices.

• Example:
➢Short-term: within the next year
➢Medium-term: between one and five years
➢Long-term: longer than five years
Value Analysis Metrics
2. Capital Allocation

• Capital allocation to make each idea functional is another measure of value analysis.

• Capital includes the initial investment, along with recurring maintenance costs and
routine costs (if any).

• Divide Ideas on the basis of capital requirement.

• For example, Large ideas are ones that involve more than 20 percent of annual profits,
medium ideas at 10 to 20 percent of annual profits, and small ideas at less than 10
percent of annual profit required
Value Analysis Metrics
3. Employee Impact

• Priority evaluation considering the estimated impact that ideas will have on
employees, in terms of labor hours, changing their workflows and processes, and
streamlining efficiency.

• Categories should exist to emphasize the net-positive impact of implementation

and should therefore also consider the number of employees expected to be
affected by implementation.

• Impact scores for each idea would then be multiplied by weighted values based
on the percentage of the organization's employees expected to be noticeably
affected by implementation.
Value Analysis Metrics
4. Risk

• Every idea should have a risk classification.

• A risk assessment should be done for threats to the business due to

implementation of the idea.

• A suitable risk category should be

➢ High-Risk
➢Medium-Risk
➢Low-Risk
Value Analysis Metrics
5. Expected Returns on the Idea

• The expected returns on an idea should be identified.

• These can be in the nature of cost savings or incremental revenue.

• Projects with zero returns can also be considered for implementation if the effect
on other key performance indicators is positive.
Value Analysis Metrics
6. Number of Independent Requests for an Idea

• Keeping a count of how many independent individuals suggest the same idea can
be a quick gauge as to which ideas are most needed or desired.

• If such idea is implemented, many employees feel happy as management value

their ideas. It creates a positive environment within the organization.
Value Analysis Metrics
Cross-Metric Analysis: Risk vs Time
AI Limitations

• It is very important to understand the limitations of artificial intelligence.

Knowing what you cannot do right now will help you to temporarily reject ideas
that could be out of reach.

• Ensure great ideas that are currently blocked by AI's limitations are not lost, they
should be committed to the idea bank.

• The idea should be recorded with the current blocker to ensure that when
technology catches up, your organization can start implementing the idea and get
the first-mover advantage.
AI Limitations
There are many specific limitations of AI frameworks as of now.

Generalizations:
• Artificial intelligence as it currently stands cannot solve problems with a single,
general approach.

• A good candidate problem that can give you a good return on investment should
have a well-defined objective. A bad candidate problem is one that is more
loosely defined and has a broad scope.

• The narrower your scope, the faster a solution will be developed.

AI Limitations
Cause and Effect:
• A lot of artificial intelligence in today's world is a black box. A black box is
something you feed data to and it gives you an answer.

• There is no reason why certain answers were chosen over others.

• For projects like translations, this does not matter, but for projects involving legal
liability or where “explainability” of logic is of high importance, this could be
troublesome.
AI Limitations
Hype:
• Artificial intelligence is cutting-edge technology. With every cutting-edge
technology comes its own marketing hype that is created to prey on the
asymmetry of information between the users and the researchers.

• It is important to do your due diligence on any AI products or consultants before

using them to build a solution. Ask for customer references and demonstrations
to see for yourself.

• It is very important to ensure that AI being developed is feasible in terms of

current technological capability.
AI Limitations
Bad Data:
• Artificial intelligence, which is built using supervised learning techniques, relies
heavily on its training data set.

• If the training data set is garbage, the answers given will also be garbage. The
data needs to be precise, accurate, and complete.

• In terms of development of an AI project, data availability should be ensured at

the conception of the project. A lack of data at a later stage will cause the entire
project to fail, and more time and resources to have been wasted.
AI Limitations
Empathy:
• Most AI lacks empathy of all manner and kind. This can be a problem for chatbots
and other AI being developed for customer service or human communication.

• AI cannot build trust with people the way a human representative can.
Disgruntled users are more likely to feel even more frustrated and annoyed after
a failed interaction with a chatbot or an Interactive Voice Response (IVR) system.
It is necessary to always have human interventionists ready to step in if needed.

• It would be best not to use AI chatbots or other such programs in places where
nonstandard and unique responses are needed for every question.

• AI is more suitable in service positions that are asked the same questions
repeatedly but phrased differently.
Pitfalls: ideation
Pitfall 1: A Narrow Focus
• Artificial intelligence is an emerging field with wide applications.
Trying to solve every problem with artificial intelligence is not the
right approach.

• Care should be taken to explore new potential avenues and ensure

that your focus is not too narrow.

• During the ideation stage, all non-AI approach should be judge with
right valuation.
Pitfalls: ideation
Pitfall 2: Going Overboard with the Process
• It is easy to get carried away with rituals, thus sidelining the ultimate goal of
generating new ideas.

• Rituals such as having regular meetings and discussions where people are free to
air their opinions are extremely important.

• Apart from these bare necessities, however, the focus should be placed on
generating ideas and exploring creativity, rather than getting bogged down by the
whole process. The process should never detract from the primary goal of
creating new ideas.
Pitfalls: ideation
Pitfall 3: Focusing On the Projects Rather than the Culture
• For an organization, the focus should be on creating a culture of innovation and
creativity rather than generating ideas for current projects.

• A culture of innovation will outlast any singular project and take your organization
to new heights as fresh ideas are implemented. Such a culture will help your
organization much more in the long run than just being concerned with
implementing the ideas of the hour.
Pitfalls: ideation
• Pitfall 4: Overestimating AI's Capabilities
• Given machine learning's popularity in the current tech scene, there are more
startups and enterprises putting out AI-based systems and software than ever
before.

• This generates a tremendous pressure to stay ahead of the competition,

sometimes using just marketing alone.

• It can therefore be a challenge to determine whether today's AI can fulfill your

lofty goals or if the technology is still a few years out. This fact should not prevent
you from starting your AI journey since even simple AI adoption can transform
your organization. Rather, let it serve as a warning to be aware that AI marketing
may not always be as it seems.
Questions?