AI in

Business Intelligence
RAHUL SINGHVI
Course Syllabus
Course
Syllabus
Location-Based Analytics for Organizations
• Applications that make use of static location data are usually called geospatial data.

• Analytics applications that are being developed by –

1. Organizations to make better decisions in managing operations, targeting customers,
promotions, and so forth.
2. Applications developed to be used directly by Consumers – that make use of location data
Geospatial Analytics
• Traditionally, management get data about the overall performance of their organization in form of
graphs, charts and tables, which sometimes could be overwhelming, confusing and cumbersome to
decode to take appropriate actions. There is a high risk of missing potential growth opportunities or
not identifying the “right” problematic areas as well.

• As an alternative to simply viewing reports, organizations employ visual maps that are geographically
mapped and based on the traditional location data, usually grouped by postal codes. These map-
based visualizations have been used by organizations to view the aggregated data and get more
meaningful location-based insights.

• The addition of location components based on latitudinal and longitudinal attributes to the traditional
analytical techniques enables organizations to add a new dimension of “where” to their traditional
business analyses, which currently answers the questions of “who,” “what,” “when,” and “how much.”

• Location-based data are now readily available from Geographic Information Systems (GIS), that are
used to capture, store, analyze, and manage data linked to a location using integrated sensor
technologies, global positioning systems installed in smartphones, or through RFID deployments
Geospatial Analytics
• By integrating information about the location with other critical business data, organizations are now
creating location intelligence that is enabling organizations to gain critical insights and make better
decisions by optimizing important processes and applications.

• Organizations now create interactive maps that further drill down to details about any location,
offering analysts the ability to investigate new trends and correlate location-specific factors across
multiple KPIs. Analysts can now pinpoint trends and patterns in revenue, sales, and profitability across
geographical areas.

• In addition, with location intelligence, organizations can quickly overlay weather and environmental
effects and forecast the level of impact on critical business operations. With technology
advancements, geospatial data is now being directly incorporated in enterprise data warehouses.

• Location-based in-database analytics enable organizations to perform complex calculations with

increased efficiency and get a single view of all the spatially oriented data, revealing hidden trends
and new opportunities.
Geospatial Analytics
Agricultural applications:

• By combining location, weather, soil, and crop-related data, very precise irrigation and fertilizer
applications can be planned. These applications combine GIS and the latest information collected
through drones, another emerging technologies.

Crime analysis:
• Superimposition of crime data including date, time, and type of crime onto the GIS data can provide
significant insights into crime patterns and police staffing.

Disease spread prediction:

• One of the first known examples of descriptive analytics is the analysis of the cholera outbreak in
London in 1854. Dr. John Snow plotted the cases of cholera on a map and was able to refute the
theory that the cholera outbreak was being caused by bad air. The map helped him pinpoint the
outbreak to a bad water well.
• The ability to track and then predict outbreaks of diseases, such as the flu, using GIS and other data
has become a major field in itself.
• In current times, social media data along with GIS data enables to pinpoint flu trends (ex: COVID)
Real-Time Location Intelligence
• Millions of consumers and businesses use location-enabled devices for finding nearby services,
locating friends and family, navigating, tracking assets and pets, dispatching, and engaging in sports,
games, and hobbies.

• The surge in location-enabled services has resulted in a massive database of historical and real-time
streaming location information. It is, of course, scattered and not very useful by itself.

• The automated data collection enabled through capture of cell phones and Wi-Fi hotspot access
points presents an interesting new dimension in nonintrusive market research, data collection, and, of
course, microanalysis of such massive data sets.

• By analyzing and learning from these large-scale patterns of movement, it is possible to identify
distinct classes of behaviors in specific contexts. This approach allows a business to better understand
its customer patterns and make more informed decisions about promotions, pricing, and so on.

• From massive amounts of high-dimensional location data, specific algorithms uncover trends,
meaning, and relationships to eventually produce human-understandable representations. It then
becomes possible to use such data to automatically make intelligent predictions and find important
matches and similarities between places and people.
Analytics Applications for Consumers
• The explosive growth of the apps industry for smartphone platforms and the use of analytics are
creating tremendous opportunities for developing apps where the consumers use analytics without
ever realizing it.

• These apps are meant for direct use by a consumer, as opposed to an organization that is trying to
mine a consumer’s usage/purchase data to create a profile for marketing specific products or
services.

• Analytics-based applications are emerging not just for fun and health, but also to enhance one’s
productivity

• For the consumer-centric apps, predictive analytics is beginning to enable development of software
that is directly used by a consumer.

• One key concern in employing these technologies is the loss of privacy. If someone can track the
movement of a cell phone, the privacy of that customer is a big issue. Some of the app developers
claim that they only need to gather aggregate flow information, not individually identifiable
information. Both users and developers of such apps have to be very aware of the deleterious effect
of giving out private information as well as collecting such information.
Recommendation Engine
• A recommendation engine is a type of data filtering tool using machine learning algorithms to
recommend the most relevant items to a particular user or customer. It operates on the principle of
finding patterns in consumer behavior data, which can be collected implicitly or explicitly.

• Netflix uses a recommendation engine to present viewers with movie and show suggestions. Amazon,
on the other hand, uses a recommendation engine to present customers with product
recommendations. While each uses one for slightly different purposes, both have the same goal: to
drive sales, boost engagement and retention, and deliver more personalized customer experiences.

• In the past, recommendations would come from a salesperson or friends and family. Today, we have
passed this task in the hands, or minds, of algorithms. As a marketing tool, you could say that these
machines are well-trained in the art of up-selling and cross-selling.
Recommendation Engine
Types of Recommendation Engines

• There are three main types of recommendation engines: collaborative filtering, content-based filtering –
and a hybrid of the two.

• Collaborative filtering

• Collaborative filtering focuses on collecting and analyzing data on user behavior, activities, and
preferences, to predict what a person will like, based on their similarity to other users.

• To plot and calculate these similarities, collaborative filtering uses a matrix style formula. An advantage
of collaborative filtering is that it doesn’t need to analyze or understand the content (products, films,
books). It simply picks items to recommend based on what they know about the user.
Recommendation Engine
Types of Recommendation Engines

• Content-based filtering

• Content-based filtering works on the principle that if you like a particular item, you will also like this other
item. To make recommendations, algorithms use a profile of the customer’s preferences and a
description of an item (genre, product type, color, word length) to work out the similarity

• The downside of content-based filtering is

that the system is limited to recommending
products or content similar to what the
person is already buying or using. It can’t go
beyond this to recommend other types of
products or content. For example, it
couldn’t recommend products beyond
homeware if the customer had only brought
homeware.
Recommendation Engine
Types of Recommendation Engines

• Hybrid model

• A hybrid recommendation engine looks at both the meta (collaborative) data and the transactional
(content-based) data. Because of this, it outperforms both.

• In a hybrid recommendation engine, natural language processing tags can be generated for each
product or item (movie, song), and vector equations used to calculate the similarity of products. A
collaborative filtering matrix can then be used to recommend items to users depending on their
behaviors, activities, and preferences. Netflix is the perfect example of a hybrid recommendation
engine. It takes into account both the interests of the user (collaborative) and the descriptions or
features of the movie or show (content-based).
Recommendation Engine
Benefits of the Recommendation Engine

• A recommendation engine can significantly boost revenues, Click-Through Rates (CTRs), conversions,
and other essential metrics. It can have positive effects on the user experience, thus translating to
higher customer satisfaction and retention.

• Let’s take Netflix as an example. Instead of having to browse through thousands of box sets and
movie titles, Netflix presents you with a much narrower selection of items that you are likely to enjoy.
This capability saves you time and delivers a better user experience. With this function, Netflix
achieved lower cancellation rates, saving the company around a billion dollars a year.

• Although recommender systems have been used for almost 20 years by companies like Amazon, it
has been proliferated to other industries such as finance and travel during the last few years.
Recommendation Engine
How Does a Recommendation Engine Work?

• A recommendation engine works using a combination of data and machine learning technology. Data
is crucial in the development of a recommendation engine – it is the building blocks from which patterns
are derived. The more data it has, the more efficient and effective it will be in making relevant revenue-
generating suggestions. Recommendation engines complete a standard four-step process:

• Step 1: Data collection

• The first and most important step for creating a recommendation engine is to gather data. There are two
main types of data to be collected:

• Implicit Data: This includes information collected from activities such as web search history, clicks, cart
events, search log, and order history.

• Explicit Data: This is information gathered from customer input, such as reviews and ratings, likes and
dislikes, and product comments.

• Recommendation engines also use customer attribute data such as demographics (age, gender) and
psychographics (interests, values) to identify similar customers, as well as feature data (genre, item type)
to identify product similarity.
Recommendation Engine
How Does a Recommendation Engine Work?

• Step 2: Data storage Once the data is gathered, it needs to be stored. Over time, the amount of data
will grow to be vast. This means ample, scalable storage must be available. Depending on the type of
data you collect, different types of storage are available.

• Step 3: Data analysis To be used, the data must then be drilled down into and analyzed. There are
several different ways in which you can analyze data. These include:

• Real-time analysis: Data is processed as it is created.

• Batch analysis: Data is processed periodically.

• Near-real-time analysis : Data is processed in minutes instead of seconds when you don’t need it
immediately.

• Step 4: Data filtering The final step is filtering. Different matrixes or mathematical rules and formulas are
applied to the data depending on whether collaborative, content-based, or hybrid model
recommendation filtering is being used. The outcome of this filtering is the recommendations.
Recommendation Engine
Web 2.0 and Online Social Networking
• Web 1.0 was seen as a one-to-many online platform where a few businesses, organizations and
individuals held a one-way dialog with people over the internet. They could pass on information in a
variety of ways, but the interaction was limited.

• Web 2.0 was seen as the next step for the web. Web 2.0 is all about reading, writing, creating, and
interacting with the end user. It was famously called the participative social web

• The main concept of Web 2.0 was many-to-many content. Individuals could set up their own websites
and blogs, post videos, and fill the web with user-generated content. Part of the Web 2.0 package
was an easier platform to work with. For the first time, people with little HTML experience could set up
a decent site through third-party software. In fact, many of these platforms were entirely web-based,
meaning that almost any computer would do.

• Then came social media, which fits neatly under the whole Web 2.0 evolution in that it centers around
easy-to-use platforms that allow users to generate content. What makes social media unique among
Web 2.0 innovations is the introduction of web-based sharing

• Social media is a Web 2.0 innovation not only because it encourages user-generated content, but
also because it extends the focus to the users by allowing them to curate other content to share
among their networks.
Web 2.0 and Online Social Networking
• Social media refers to the enabling technologies of social interactions among people in which they
create, share, and exchange information, ideas, and opinions in virtual communities and networks.

• It is a group of Internet-based software applications that build on the ideological and technological
foundations of Web 2.0 and that allow the creation and exchange of user-generated content

• Social media depends on mobile and other Web-based technologies to create highly interactive
platforms for individuals and communities to share, co-create, discuss, and modify user-generated
content.

• It introduces substantial changes to communication among organizations, communities, and

individuals.

• Since their emergence in the early 1990s, Web-based social media technologies have seen a
significant improvement in both quality and quantity. These technologies take on many different
forms, including online magazines, Internet forums, Web logs, social blogs, microblogging, wikis, social
networks, podcasts, pictures, video, and product/service evaluations/ratings.
Web 2.0 and Online Social Networking
• By applying a set of theories in the field of media research (social presence, media richness) and
social processes (self-presentation, self-disclosure), Kaplan and Haenlein (2010) created a
classification scheme with six different types of social media:

o collaborative projects (e.g., Wikipedia)

o blogs and microblogs (e.g., Twitter)
o content communities (e.g., YouTube)
o social networking sites (e.g., Facebook)
o virtual game worlds (e.g., World of Warcraft), and
o virtual social worlds (e.g. Second Life)
Cloud Computing and Business Analytics
• The National Institute of Standards and Technology (NIST) defines cloud computing as “a model for
enabling convenient, on-demand network access to a shared pool of configurable computing
resources (e.g., networks, servers, storage, and services) that can be rapidly provisioned and released
with minimal management effort or service-provider interaction.”

• It is a style of computing in which dynamically scalable and often virtualized resources are provided
over the Internet. Users need not have knowledge of, experience in, or control over the technology
infrastructures in the cloud that supports them

• In simple terms Cloud computing is the on-demand availability of computer system resources,
especially data storage (cloud storage) and computing power, without direct active management
by the user

• IBM defines Cloud computing as “on-demand access, via the internet, to computing resources—
applications, servers (physical servers and virtual servers), data storage, development tools,
networking capabilities, and more—hosted at a remote data center managed by a cloud services
provider (or CSP)”
Cloud Computing and Business Analytics
• A good general business example of cloud computing is
Amazon.com’s Web services.

• Amazon.com has developed an impressive technology

infrastructure for e-commerce as well as for BI, customer
relationship management, and supply-chain management. It
has built major data centers to manage its own operations.

• Cloud computing, like many other IT trends, has resulted in

new offerings in BI. These options permit an organization to
scale up its data warehouse and pay only for what it uses.
The end user of a cloud-based BI service may use one
organization for analysis applications that, in turn, uses
another firm for the platform or infrastructure.

• Though service-oriented architecture advocates "Everything

as a service" (EaaS or XaaS), cloud-computing providers offer
their "services" according to different models -Infrastructure as
a Service (IaaS), Platform as a Service (PaaS), and Software
as a Service (SaaS).
Cloud Computing and Business Analytics

• A conceptual architecture of a service-oriented decision support environment, that is, a cloud-based

analytics system.

• In service-oriented decision support solutions, (1) operational systems, (2) data warehouses, (3) online
analytic processing, and (4) end-user components can be obtained individually or bundled and
provided to the users as service. Any or all of these services can be obtained through the cloud.
Cloud Computing and Business Analytics

Data as a Service (DaaS)

• The concept of data as a service basically advocates the view that “where data lives”— the actual
platform on which the data resides—doesn’t matter !

• Data can reside in a local computer or in a server at a server farm inside a cloud-computing
environment.

• With DaaS, any business process can access data wherever it resides. Data as a service began with
the notion that data quality could happen in a centralized place, cleansing and enriching data and
offering it to different systems, applications, or users, irrespective of where they were in the
organization, computers, or on the network.

• This has now been replaced with master data management and customer data integration solutions,
where the record of the customer (or product, or asset, etc.) may reside anywhere and is available as
a service to any application that has the services allowing access to it.
Cloud Computing and Business Analytics
Software as a Service (SaaS)

• This model allows consumers to use applications and software that run on distant computers in the
cloud infrastructure.

• Consumers need not worry about managing underlying cloud infrastructure and have to pay for the
use of software only. All we need is a Web browser to connect to the cloud.

• Gmail, Picasa, and Flickr are examples of SaaS.

Platform as a Service (PaaS)

• Using this model, companies can deploy their software and applications in the cloud so that their
customers can use them. Companies don’t have to manage resources needed to manage their
applications in cloud-like networks, servers, storage, or operating systems.

• This reduces the cost of maintaining underlying infrastructure for running their software and also saves
time for setting up this infrastructure. Now, users can focus on their business rather than focusing on
managing infrastructure for running their software. Examples of PaaS are Microsoft Azure, Amazon
EC2, and Google App Engine.
Cloud Computing and Business Analytics
Infrastructure as a Service (IaaS)

• In this model, infrastructure resources like networks, storage, servers, and other computing resources
are provided to client companies.

• Clients can run their application and

have administrative rights to use these
resources but do not manage
underlying infrastructure. Clients have to
pay for usage of infrastructure.

• A good example of that is

Amazon.com’s Web services.

• Amazon.com has developed impressive

technology infrastructure that includes
data centers. Other companies can use
Amazon.com’s cloud services on a pay-
per-use-basis without having to make
similar investments.
Cloud Computing and Business Analytics
Essential Technologies for Cloud Computing

Virtualization is the creation of a virtual version of something like an operating system or server. A simple
example of virtualization is the logical division of a hard drive to create two separate hard drives in a
computer. Virtualization can be in all three areas of computing:

• Network virtualization: It is the splitting of available bandwidth into channels, which disguises
complexity of the network by dividing it into manageable parts. Then each bandwidth can be
allocated to a particular server or device in real time.

• Storage virtualization: It is the pooling of physical storage from multiple network storage devices into a
single storage device that can be managed from a central console.

• Server virtualization: It is the masking of physical servers from server users. Users don’t have to manage
the actual servers or understand complicated details of server resources.
Cloud Computing and Business Analytics
Cloud Deployment Models

• Cloud services can be acquired in several ways, from building an entirely private infrastructure to
sharing with others. The following three models are the most common

Private cloud:

• This can also be called internal cloud or corporate cloud. It is a more secure form of cloud service
than public clouds like MS Azure and Google BigQuery.

• It is operated solely for a single organization having a mission critical workload and security concerns.
It provides the same benefits as a public cloud-like service, scalability, changing computing resources
on demand, and so on.

• Companies that have a private cloud have direct control over their data and applications.

• The disadvantage of having a private cloud is the cost of maintaining and managing the cloud
because on-premise IT staff are responsible for managing it
Cloud Computing and Business Analytics
Cloud Deployment Models

Public cloud:

• In this model the subscriber uses the resources offered by service providers over the Internet. The
cloud infrastructure is managed by the service provider.

• The main advantage of this public cloud model is saving time and money in setting up hardware and
software required to run their business. Examples of public clouds are Microsoft Azure platform,
Google App Engine, and Amazon AWS.

Hybrid cloud:

• The hybrid cloud gives businesses great flexibility by moving workloads between private and public
clouds.

• For example, a company can use hybrid cloud storage to store its sales and marketing data, and
then use a public cloud platform like Amazon Redshift to run analytical queries to analyze its data.
Cloud Computing and Business Analytics
Cloud Deployment Models

Community Cloud:

• The community cloud operates in a way that is similar to the public cloud.

• There's just one difference - it allows access to only a specific set of users who share common
objectives and use cases.

• This type of deployment model of cloud computing is managed and hosted internally or by a third-
party vendor. However, you can also choose a combination of all three.
Cloud Computing and Business Analytics
Analytics as a Service (AaaS)

• Analytics and data-based managerial solutions—the applications that query data for use in business
planning, problem solving, and decision support—are evolving rapidly and being used by almost
every organization.

• However, enterprises are being flooded with information, and getting insights from this data is a big
challenge for them. Along with that, there are challenges related to data security, data quality, and
compliance.

• AaaS is an extensible analytical platform using a cloud-based delivery model where various BI and
data analytics tools can help companies in better decision making and get insights from their huge
• amount of data.

• The platform covers all functionality aspects from collecting data from physical devices to data
visualization.

• AaaS provides an agile model for reporting and analytics to businesses so they can focus on what
they do best. Customers can either run their own analytical applications in the cloud or they can put
their data on the cloud and receive useful insights.
Cloud Computing and Business Analytics
Analytics as a Service (AaaS)

• AaaS combines aspects of cloud computing with Big Data analytics and empowers data scientists
and analysts by allowing them to access centrally managed information data sets.

• They can now explore information data sets more interactively and discover richer insights more
rapidly, thus erasing many of the delays that they may face while discovering data trends.

• For example, a provider might offer access to a remote analytics platform for a fee. This allows the
client to use analytics software for as long as it is needed. AaaS is a part of SaaS, PaaS, and IaaS, thus
helping IT significantly reduce costs and compliance risk, while increasing productivity of users.

• AaaS in the cloud has economies of scale and scope by providing many virtual analytical
applications with better scalability and higher cost savings.

• With growing data volumes and dozens of virtual analytical applications, chances are that more of
them leverage processing at different times, usage patterns, and frequencies

• Data and text mining is another very promising application of AaaS. The capabilities that a service
orientation brings to the analytics world can also be used for large-scale optimization, highly complex
multicriteria decision problems, and distributed simulation models.
Impact of Analytics in Organizations
• Analytic systems are important factors in the information and knowledge revolution.

• Separating the impact of analytics from that of other computerized systems is a difficult task,
especially because of the trend toward integrating, or even embedding, analytics with other
computer-based information systems.

• Analytics can have both micro and macro implications.

• Such systems can affect particular individuals

and jobs, and they can also affect the work
structures of departments and units within
• an organization.

• They can also have significant long-term

effects on total organizational structures,
entire industries, communities, and society as
a whole
Impact of Analytics in Organizations
• Analytic systems are important factors in the information and knowledge revolution.

• Separating the impact of analytics from that of other computerized systems is a difficult task,
especially because of the trend toward integrating, or even embedding, analytics with other
computer-based information systems.

• Analytics can have both micro and macro implications. Such systems can affect particular individuals
and jobs, and they can also affect the work structures of departments and units within an
organization.

• Explosive growth in analytics, AI, and cognitive computing is going to have a major impact on the
future of organizations. The impact of computers and analytics can be divided into three general
categories: organizational, individual, and societal.
Impact of Analytics in Organizations
Organizational impact - New Organizational Units

• One change in organizational structure is the possibility of creating an analytics department, a BI

department, or a data science department in which analytics play a major role.

• Some large corporations have separate decision support units or departments. For example, many
major banks have such departments in their financial services divisions.

• Many companies have small data science or BI/data warehouse units. These types of departments
are usually involved in training in addition to consulting and application development activities.

• Others have empowered a chief technology officer over BI, intelligent systems, and e-commerce
applications.

• Many companies are embedding analytics/data science specialties within functional areas such as
marketing, finance, and operations.

• Growth of the BI industry has resulted in the formation of new units within IT provider companies as
well. For example, a few years back IBM formed a new business unit focused on analytics.
Impact of Analytics in Organizations
Redesign of an Organization through the Use of Analytics

• An emerging area of research and practice is employing the data science technologies for studying
organizational dynamics, personnel behavior, and redesigning the organization to better achieve its
goals

• Such analytics applications are known as “People Analytics.” For example, analytics are used by HR
departments to identify ideal candidates from the pool that submit resumes to the organization, or
even through broader pools such as LinkedIn

• Applications have been developed to identify the best candidates who will likely not leave the
organization. Retaining an employee is similar to retaining a customer, so minimizing “churn” internally
is equally important to an organization’s success

• A more interesting and recent application area relates to understanding employee behavior by
monitoring their movements within the organization and using that information to redesign the layout
or teams to achieve better performance
Impact of Analytics in Organizations
Analytics Impact on Managers’ Activities, Performance, and Job Satisfaction

• Although many jobs may be substantially enriched by analytics, other jobs may become more routine and
less satisfying

• If the routine and mundane work can be done using an analytic system, then it should free up the
managers and knowledge workers to do more challenging tasks

• The most important task of managers is making decisions. Analytics can change the manner in which many
decisions are made and can consequently change managers’ job responsibilities

• Another aspect of the managerial challenge lies in the ability of analytics to support the decision making
process in general, and strategic planning and control decisions in particular. Analytics could change the
decision-making process and even decision-making styles

• Enterprise information systems are extremely useful in supporting strategic management. Data, text, and
Web mining technologies are now used to improve the external environmental scanning of information. As
a result, managers can change their approach to problem solving and improve on their decisions quickly

• Analytics technologies tend to reduce the time required to complete tasks in the decision-making process
and eliminate some of the non-productive waiting time by providing knowledge and information.
Impact of Analytics in Organizations
The following are some potential impacts of analytics on managers’ jobs-

• Less expertise (experience) is required for making many decisions

• Faster decision making is possible because of the availability of information and the automation of some
phases in the decision-making process
• Less reliance on experts and analysts is required to provide support to top executives; managers can do it
by themselves with the help of intelligent systems
• Power is being redistributed among managers. (The more information and analysis capability they possess,
the more power they have.)
• Support for complex decisions makes them faster to develop and be of better quality
• Information needed for high-level decision making is expedited or even self-generated.
• Automation of routine decisions or phases in the decision-making process (e.g., for frontline decision making
and using ADS) may eliminate some managers.
In general, it has been found that the job of middle managers is the most likely job to be automated. Midlevel
managers make fairly routine decisions, which can be fully auto-mated.
Impact of Analytics in Organizations
Industrial Restructuring –

• Currently, AI, analytics, and cognitive computing has thrown many dimensions of the impact of the current
developments on industry and society

• There has been significantly more far reaching is that the technology is enabling many cognitive tasks to be
done by machines. And the speed of change is so radical that the likely impact on organizations and
society will be very significant and at times unpredictable

• As machines tend to be available at all hours and at all locations, an organization’s reach may increase,
resulting in easier scaling and thus greater competition between organizations

• These organizational impacts mean that yesterday’s top organizations may not remain at the top forever
because cognitive computing and automation can challenge established players.
Impact of Analytics in Organizations
Automation’s Impact on Jobs –

• Many knowledge worker’s tasks may now be doable by a machine and automated to the large extent.
However, at the same time, technology does not always lead to fewer people being employed

• Example - What happened is that the routine part of the job was being done by the ATM machines, and
the bank employees were better connected to customers and were now focused on cross-selling and up-
selling services

• Financial advising is typically considered a knowledge-intensive task. As data science technology provides
customized support for a specific scenario, the costs of such services will go down. This will lead to more
people opting to demand such services, and eventually needing more humans for advanced work.

• the automation due to cognitive computing and AI will accelerate what is called “polarization” of the labor
market in the future. This entails significant job growth in top and bottom tiers of the labor market, but losses
in the middle layer

• Jobs requiring low skills—janitorial services, personal care, food preparation, and so on, are continuing to
grow. Similarly, jobs that require very high skill levels—such as managerial, graphics design, and
computational work, are also growing. But jobs that require “middle skills”—specialized knowledge that was
applied over and over with some adaptation—are at the greatest risk of disappearing
Issues of Legality, Privacy, and Ethics
Legal Issues–

• The introduction of analytics may compound a host of legal issues already relevant to computer systems

• In addition to resolving disputes about the unexpected and possibly damaging results of some analytics,
other complex issues may surface

• Some examples of such issues leading to legal complications are –

o As self-driving cars become more common, who is liable for any damage or injury when a car’s sensors,
network, or the analytics fail to function as planned?
o What is the value of an expert opinion in court when the expertise is encoded in a computer?
o Who is liable for wrong advice (or information) provided by an intelligent application?
o What happens if a physician accepts an incorrect diagnosis made by a computer and performs an act
that results in the death of a patient?
o What happens if a manager enters an incorrect judgment value into an analytic application and the
result is damage or a disaster?
o Who owns the knowledge in a knowledge base?
o Can management force experts to contribute their expertise?
Issues of Legality, Privacy, and Ethics

Privacy –

• Privacy means different things to different people. In general, privacy is the right to be left alone and the
right to be free from unreasonable personal intrusions.

• Privacy has long been a legal, ethical, and social issue in many countries and right to privacy is recognized
today by many governments, across the world

• The definition of privacy can be interpreted quite broadly. However, the following two rules have been
followed fairly closely in past court decisions:
1. the right of privacy is not absolute. Privacy must be balanced against the needs of society.
2. the public’s right to know is superior to the individual’s right to privacy.

• These two rules show why it is difficult, in some cases, to determine and enforce privacy regulations. Privacy
issues online have specific characteristics and policies.
Issues of Legality, Privacy, and Ethics
Privacy – Collecting Information about Individuals

• The complexity of collecting, sorting, filing, and accessing information manually from numerous agencies
was, in many cases, a built-in protection against the misuse of private information. It was simply too
expensive, cumbersome, and complex to invade a person’s privacy.

• Technology has created an entirely new dimension of accessing and using data. The inherent power in
systems that can access vast amounts of data can be used for the good of society - by matching records
with the aid of a computer, it is possible to eliminate or reduce fraud, crime, government mismanagement,
tax evasion, employment of illegal workers, and so on

• However, what price must the individual pay in terms of loss of privacy so that the government can better
apprehend criminals?

• The implications for online privacy are significant. Location information from devices has been used to
locate victims as well as perpetrators in some cases, but at what point is the information not the property of
the individual?

• As a data science professional, you have to recognize that such issues can make a big difference in your
organization’s reputation
Issues of Legality, Privacy, and Ethics

Privacy – Collecting Information about Individuals

• Two effective tools for collecting information about individuals are cookies and spyware. Single-sign-on
facilities that let a user access various services from a provider are beginning to raise some of the same
concerns as cookies. Such services (Google, Yahoo!, MSN) let consumers permanently enter a profile of
information along with a password and use this information and password repeatedly to access services at
multiple sites.

• Critics say that such services create the same opportunities as cookies to invade an individual’s privacy.

• The use of AI technologies in the administration and enforcement of laws and regulations may increase
public concern regarding privacy of information. These fears, generated by the perceived abilities of AI, will
have to be addressed at the outset of almost any AI development effort.
Issues of Legality, Privacy, and Ethics

Privacy – Mobile User Privacy

• Many users are unaware of the private information being tracked through their smartphone usage.

• Many apps collect user data that track each phone as it moves from one cell tower to another, from GPS-
enabled devices that transmit users’ locations, and from phones transmitting information at Wi-Fi hotspots.

• Major app developers claim they are extremely careful and protective of users’ privacy, but it is interesting
to note how much information is available through the use of a single device

• Any analytics application developer has to keep privacy issues in mind.

• Apple claims to collect little to no information about its individual iPhone users. On the other hand, Google
collects a lot of usage information to be able to give the users proactive information about their calendar,
preferred restaurants, upcoming activities, and so on.
Issues of Legality, Privacy, and Ethics
Privacy – Security and Individual Privacy

• Analytics technologies such as mining and interpreting the content of telephone calls, taking photos of
people in certain places and identifying them, and using scanners to view your personal belongings are
considered by many to be an invasion of privacy.

• However, many people recognize that analytic tools are an effective and efficient means to increase
security, even though the privacy of many innocent people is compromised.

• Governments applies analytical technologies on a global scale in the war on terrorism

• Supermarket chains, home improvement stores, and other retailers voluntarily handed over massive
amounts of customer records to the law enforcement agencies, almost always in violation of their own
stated privacy policies.

• The law enforcement agencies now mines enormous amounts of data, looking for activity that could
indicate a terrorist plot or crime.

• Because the government is acquiring personal data to detect suspicious patterns of activity, there is the
prospect of improper or illegal use of the data. Many see such gathering of data as a violation of citizens’
freedoms and rights.
Issues of Legality, Privacy, and Ethics
Privacy – Recent Technology Issues in Privacy and Analytics

• Most providers of Internet services such as Google, Facebook, Twitter, and others depend on monetizing
their users’ actions. They do so in many different ways, but all of these approaches in the end amount to
understanding a user’s profile or preferences on the basis of their usage.

• With the growth of Internet users in general and mobile device users in particular, many companies have
been founded to employ advanced analytics to develop profiles of users on the basis of their device
usage, movement, and the contacts of the users.

• While some tech companies identify profile of a user basis their email ID, other tech company that aims
• to identify devices on the basis of their usage.

• All of these companies employ technologies such as clustering and association mining to develop profiles
of users. Such analytics applications definitely raise thorny questions of privacy violation for the users.

• Many of the analytics start-ups in this space claim to honour user privacy, but violations are often reported.

• Violations of privacy create fears of criminal conduct based on user information. This area is a big concern
overall and needs careful study
Issues of Legality, Privacy, and Ethics
Privacy – Recent Technology Issues in Privacy and Analytics

• While on one side the power of analytics in being able to learn more about target customers, on the other,
it also serve as a warning to analytics professionals about being sensitive to privacy and ethical issues

• Another application area that combines organizational IT impact, Big Data, sensors, and privacy concerns
is analysing employee behaviours on the basis of data collected from sensors that the employees wear in a
badge

• These sensors track all movement of an employee. Of course, this creates major privacy issues. Should the
companies be able to monitor their employees this intrusively?

• A major battle is brewing between automobile manufacturers and technology providers such as Apple
(CarPlay) and Google (Android Auto) on who owns the massive amount of data generated in a car (alogn
with the various sensors) and who can get access to this data?

• This is becoming more crucial because as cars become more self-driving, the driver/passenger in the car
could be a highly targeted prospective customer for specific products and services whose profile is very
well known to the organization who is able to create that profile.

• As a data analytics professional, be very aware of the legal and ethical issues involved in collecting
information that may be privileged or protected.
Issues of Legality, Privacy, and Ethics
Ethics in Decision Making and Support

Ethical issues that could be of interest in analytics implementations includes the following:
o Electronic surveillance
o Ethics in DSS design
o Software piracy
o Invasion of individuals’ privacy
o Use of proprietary databases
o Use of intellectual property such as knowledge and expertise
o Exposure of employees to unsafe environments related to computers
o Computer accessibility for workers with disabilities
o Accuracy of data, information, and knowledge
o Protection of the rights of users
o Accessibility to information
o Use of corporate computers for non-work-related purposes
o How much decision making to delegate to computers

• Personal values constitute a major factor in the issue of ethical decision making. The study of ethical issues is
complex because of its multidimensionality. Therefore, it makes sense to develop frameworks to describe
ethics processes and systems.