4 PILLARS FOR

CREATING A
WINNING AI
STRATEGY
FOR BUSINESS
Steps for an AI Ready Enterprise

Polestar Solutions & Services India Pvt Ltd

 Introduction

Businesses are rapidly preparing Therefore it will be necessary to

themselves for this new paradigm. constantly revisit the whole program.
But for this to work effectively, they A fine balancing act needs to be done
need get their house in orders. to devise a flexible roadmap.
Lay out crystal-clear specific and Companies also need to figure out
general objectives from the how their competitors are using AI.
program, plan the roadmap, set This will help them better understand
milestones, gauge the hard and soft how AI can actually improve their
costs associated with the program. business as well as discover the right
Identify the stakeholders who will IT partners who can help them in
be impacted and figure out how they their journey.
are going to measure the ROI of the Companies must avoid pitfalls that
whole initiative. may jeopardize the initiative.
Incorporate the expectations from Business leaders must take measures
stakeholders with regard to the so that their employees are educated
whole AI program by taking into on the benefits from AI.
account their feedbacks in a
In order to derive optimal benefits
structured manner.
from the technology, companies need
It might get difficult to set the to audit their whole IT set-up.
project roadmap in stone at the
They need to analyze if they need to
beginning since the program might
upgrade their infrastructure to cope
need to incorporate multiple
up with the increased memory &
feedback as the program progresses.
processing
 Companies need to consider few
important points to ensure the success
with their AI Strategy

Data - AI systems will require a large quantity of

clean, usable and relevant data input - does the
infrastructure have the capability to integrate
more data sources

The Need to Start Small - Analyze a specific use

case & KPIs rather than investing heavily into
multiple areas is going to be a good way to start
with the initiative- It will convince the
stakeholders by giving them quick visibility into
the results and benefits

Cost Analysis - Calculating ROI from the

initiatives, understanding budget constraints and
the total cost of ownership
Nowadays, AI is the talking point across
every industry.

But, should this be the reason why you are

jumping into AI?

The answer should be 'No’.

According to a McKinsey Global

Survey On Artificial Intelligence,
companies cited the most common
constraints to AI as the following –
1) Lack of clear AI strategy
2) Lack of appropriate talent
3) Functional silos that constrain end-
to-end AI solutions
4) Lack of leaders who demonstrate
ownership and commitment to AI.
 Key Pillars for
your AI
Implementation
Plan
 1. Finding a Business
Use Case
Like any other solution,
the first thing for you is to
identify a 'Need' for your
business. It can be related
to a problem in your
operations or optimizing
your workforce or finding
patterns in unstructured
data sets or something
entirely new for your
business.
The road to an AI
implementation would
seem rocky and many
times the whole effort
would come into question.
A defined outcome works
as a guiding light at the
end of a dark tunnel. The
turnaround time or payoff
time with AI is going to be
longer.
Mostly because AI is often
linked with complex outcomes.
But this is not true, and it
would be a good practice
starting with a smaller
implementation.
Like automating a repetitive
task that is prone to human
error. Once you show the value
that AI solutions can deliver,
you will have buy-in from the
senior executives.
After gaining your
organization's trust, you can
chalk out an AI roadmap with
all the stakeholders in your
company. It should be aligned
with achieving the long-term
goal of your business.
 Case Study

Carlsberg, the fourth-largest brewing company in the world

adopted AI. They always aim to bring in innovation and
disruption in the brewing industry. In AI, they have found the
right technology to keep pushing their boundaries and push
new beer flavors to market faster.

Use Case: AI to transform their brewing

process and predict flavors.
Carlsberg have embedded AI as an integral part of their
brewing research process. Traditionally, identifying flavors
required samples to be created for tasting which required
resources and time. Carlsberg has significantly optimized this
process by installing sensors.

They brew microliters of hundreds of different beers every

day. This small volume is not testable by the human senses.
 “So we realized that if we had sensors that could tell us at the
outset if the yeast is really going to be usable later in large-
scale beer production — and that could recognize the
chemicals and flavor compounds to predict what a beer will
taste like — that would really help our research a lot.” – says
Jochen Förster, the director and professor of yeast and
fermentation for Carlsberg Research Laboratory.

They use Microsoft AI Solutions with machine learning

algorithms, to analyze the signals coming from these sensors
to measure the flavors and aromas created by the yeast and
different varieties of ingredients.

The timeline for this project is three years and is still into
progress, but they have already realized some great results.
The system is already able to differentiate between lagers.
Researchers are trying to make it friendlier for technicians
to use it in their day-to-day work. Once, the system gets
completely optimized, it will help Carlsberg reduce the time
to research flavors by a third. Ultimately it is aligned with
the long-term goal of - more distinct beer to market faster.
 2. Governance
Defining a proper governance
framework is going to be
extremely crucial to oversee a
meticulous change
management programme.
A program management
office (PMO) comes useful
here that can define the roles
& rights, provide maker-
checker role and strong
monitoring of the entire
process.
It is important to have well-
defined governance
framework in place for
regulating the AI-usage.
The accuracy of AI system
depends upon the quality of
data input. It is important to
have active support from all
the stakeholders.
A governance system
manages and defines the rules
for data access and
collaboration, allowing
organization to maintain
control over their data assets
in a proactive and responsible
manner.
Does your organization have
the capability to assess the
risks? Organizations must
have a coherent and clear AI
strategy.
Many companies are still not
mature in identifying and
formulating a well-defined
governance mechanism
around this technology.
Data that is shared must not
get misused and the integrity
of the data is maintained.
 "As organizations move from optimization and
automation to innovation and beyond AI, they
may want to ask different kinds of data-centric
questions such as, ‘What are the boundaries
for using data to perform analytics?’ ‘How are
those boundaries impacted by AI?’ ‘Who are
the stakeholders in these conversations?’,”
- Deborah Adleman, Director, EY LLP

Rapidly evolving regulatory frameworks require

companies to constantly rethink their data protection
policy.

Many times, everyone at the company may be

unaware about the nuances of such regulations and
this may prove dangerous. Hence, it is important to
have effective guardrails and to communicate these
details effectively throughout the organization.

And this is bound to affect the effectiveness of AI

algorithm which demands the-greater-the-better access
to data for making more accurate predictions.
 Case Study

For example, when the civic administration of Espoo,

Finland’s second largest city, wanted to devise an intelligent
social welfare system that would deliver the right benefit to the
right citizen at the right time, they took on the help of
Microsoft to build an AI system that would process over 500
millions of rows of data and not only deliver the civic
authorities a holistic overview of the system, but also help it
optimize the utility, infrastructure, educational, cultural,
health, and social welfare services for its constituents.

But before developing the AI system, Espoo needs to address

significant security, data privacy, and regulatory concerns.
Current GDPR rules require data to be anonymized to protect
citizen privacy, but that would reduce the effectiveness of the
AI algorithms to make predictions.

The city is also working with international organizations and

government and business partners in Finland to establish
globally recognized standards and rules for the ethical and
transparent use of AI in the public sector.

“Our citizens want to know how their information is used, so

we have responded by creating and communicating ethical
rules for AI,” says Päivi Sutinen, Director for City as a
Service Development at the City of Espoo.
3. Subject Matter Experts Need to be
Involved in AI
AI strategy will be successful
if it is linked to real business
use case for the company. For
this, company would require
input and active support from
its business leaders.
Companies also need subject
matter experts to work
closely for successful
development of AI expertise.
When data scientists and
subject matter experts work
in tandem, they are better
able to prioritize the right
business use cases to solve,
understand opportunities and
its relevance for the company
and consider all the
stakeholders - take into
account the data spread
across departmental silos,
and provide context to the
solution.
Usually the data scientists
tend to have less experience
of working on the actual
business concerns and
priorities for the company.
It will require a well-defined
mechanism to capture
feedback from users.
Companies will require a
program management team
which will prioritize and
incorporate the feedback in a
structured manner.
Many tools today make it
easy for non-technical people
can try their hands at the data
science wizardry.
Gartner coined the term
“citizen data scientists” to
refer to people from non data
background who are
groomed with the data skills
However, this does not mean
doing away with a dedicated
data science team altogether.
These experts, with thorough
grounding in math and
statistics are going to be
indispensable.
Subject matter experts might
not have the technical and
mathematical acumen to
assess the intricacies &
capabilities of AI models.
a machine learning model, they
would be able to optimize the
bid amount, time and targeting
of a particular ad on social
media
A data scientist would be able
to assess the feasibility of this
analysis by studying the
available data, technical
expertise available and what
they would need in order to
make it possible.

Data scientists will be able toOnce the AI system is up and

outline the bounded realities running, the role of subject
of AI to subject-matter matter experts don’t end.
experts. Subject matter experts can
provide valuable context to
They will be able to set determine if the AI system is
expectations for the features leading to insights that can
of a machine learning model: result in improved processes.
what it can and can’t do for a
business. This intricate Taking feedback from these
balancing act will only be subject matter experts in order
successful if both sides work to understand what their
together. For example, a expectations will lead to
marketer may expect that by adoption
deploying
 Case Study

For manufacturing companies, having continuous machine

health monitoring and pre-empting catastrophic failure of
equipment, are very important use case that can be done with
“intelligent machines” resulting in minimized machine
downtime, maximized productivity.

Pumps, fans, and motors in plant environment often have

problems such as lubrication, cavitation, looseness,
imbalance, as well as bearing issues. In this case,
accelerometers are used to monitor vibration and ultrasonic
energy. These critical measurements can sense problems in
rotating equipment.

For example, when problems occur on equipments, a

maintenance professional will create a work order and then
it will be queued up to be serviced. The question then
becomes whether or not that analysis can be leveraged on a
continual basis.

For example, in manufacturing predictive maintenance, an

equipment expert could identify what parameters are
fundamentally related to observing and making predictive
analysis..
 Case Study

A process expert could relate how different contextual

environments and their combinations of data such as
temperature, pressure, humidity, ambient temperature, etc.
might result in equipment failure.

An analytics expert could determine the best algorithm(s)

to model and predict the trend given the data size,
parameter set, dynamics, etc. The data scientists might
believe that the system is making accurate predictions on
the optimal maintenance schedule on the machines, but
they lack the necessary context about those machines.

A data scientist can’t interpret the numbers to figure out if

in fact one machine should be maintenance more often
than the predictions are calling for.

A domain expert at the manufacturing company who has

experience overseeing the machine maintenance has that
context. This would be valuable to the data scientist in
making the right adjustments in the weight of the features
that they include
 4. ROI – Cost Benefit Analysis
Any strategy is incomplete For example, in case of a
without estimating the pilot of predictive
budget it will require and the maintenance of machine
corresponding returns you setup, you can easily
expect to realize. compare the change in
uptime of the machine post-
In the preceding steps, you AI implementation.
have already discussed the
business use cases of AI, Only if the investment made
gaining SMEs support and against the underlying
the importance of setting up technology underweights the
a robust governance benefit accrued from
framework. reductions in maintenance
cost, you should go ahead
Each of these stages has a with the deployment.
cost attached to them. For
obtaining a clear picture you However, in the case of AI,
need to quantify the benefits calculating ROI is not
in terms of numbers. always straightforward.

Calculating the ROI during There are multiple factors

the pilot is a mandatory step acting at the same time
and helps in getting the making it complex to
green light for the quantify the benefits from
deployment. an AI solution.
In these cases, it becomes
difficult for the business
stakeholders without the
empirical results of
investment paybacks to air
their opinion in front of the
top management.
To calculate the ROI of an
AI implementation, the
stakeholders are required to
provide the returns from the
entire business unit.
with governance framework
need for AI and cost incurred
in setting up a data platforms
on cloud or on-premise,
equipment or software costs,
energy and data center cost,
training and extra manpower
cost as well.
If even after this exercise the
ROI is positive, it is indicative
of the right path of
deployment.

Since the pilots are done on AI solutions tend to deliver

a limited set of operations some intangible returns which
like if the packaging companies often realize in the
assembly line is automated long term.
but the rest of the processes
remain the same, the The AI champions should work
benefits of AI will be lost. with the finance team to
determine the ROI projections
So, in the initial phases, it is in the long run. There is always
important to set the an inherent risk involved while
company’s expectations for working on emerging
a single process only. technologies. Keeping this in
mind, it is always advisable to
However, in the long run, it factor in this risk and adding a
becomes important to factor cushion to the cost projections
in the cost associated while calculating ROI.
 Case Study

SR-Bank was looking to ramp up their customer service

need owing to growing customer base. They wanted to
reduce the cost associated with handling customer queries
and impart better experience.

Use Case: A secure Conversational AI Solution backed by

NLU & ML – Banki

SR-Bank wanted to achieve better control and provide a

superior experience to their customer in an efficient way.
They set up systems like Natural Language Understanding
(NLU) and Machine Learning (ML) to set up virtual agents
for customer queries redressal. The virtual agents were
able to resolve most of the queries, but advancements of
conversational AI presented them with some very exciting
opportunities.

Banki – an AI-enabled conversational solution was

developed. The results with Banki are so ground-breaking
that SR-bank has prioritized a ‘Chat First” strategy. Out of
approximately 25,000 monthly conversations, Banki is able
to recognize around 2,000 intents along with response time
and level accuracy that isn’t possible from human
personnel.
 Case Study

Also, the volume of customer queries handled by SR-Banks has

dramatically increased by nearly 150%. As per their
calculations, its capacity is close to 20 full-time employees. It
frees up human resources from the repetitive tasks allowing
them to focus on more creative tasks.

Banki has really delivered some great ROI in error handling

encountered while authorizing their e-banking solution. Users
typically get an error during a network outage; in such
incidents, the error code is redirected to Banki. It then pops up
and guides the customers by telling them to either try again in a
couple of minutes or contact customer service.

In March of 2018, Norway’s primary electronic identification

system, BankID, suffered some technical glitches disabling
customers from login into their accounts. During the outage,
Banki successfully fielded more than 4 000 conversations in a
single day. It couldn’t have been possible without the help of
Banki.
 Wrapping Up
This has been a decade where;
businesses have realised the potential
that AI holds. As we are entering a
new decade, technology gurus are
predicting it be a decade where we
will see AI coming of age and getting
adopted in day-to-day processes.
In light of these developments, this
series aims to ready enterprises to
ride this technology-led wave of
growth.
In part -1 of this series, we walked
you through the basics of AI. Then,
we dwell into the key aspects of
building an AI strategy from scratch.
We break it down for you into:
❑ Organizational
❑ Data Management
❑ Infrastructure
❑ Analytics
to measure your enterprise readiness
and formulate a comprehensive AI
strategy.
 Link to Part 1: AI Strategy
for Business
This part of the series presents you
with typical challenges companies
face while starting with their AI
strategy.
So we have broken it down into four
key pillars that could help you to
tackle them and garner the support of
business users. These are:
❑ Finding a Business Use Case
❑ Governance
❑ Subject Matter Expertise
❑ ROI – Cost Benefit Analysis
We have also included some case
studies to guide you along this
complex but rewarding journey.
You can also take some outside help
from companies who have
successfully done this for other
organisations.
At Polestar, we have helped
companies in their technology-led
transformation of business operations
and building a culture of innovation.
 Copyright © 2019 Polestar
Solutions & Services India
Pvt Ltd. All rights reserved.

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