DATA

Sometimes “Small Data”

Is Enough to Create Smart
Products
by Praful Saklani
JULY 19, 2017

When thinking about practical applications for artificial intelligence in your business, it’s easy to
assume that you need vast amounts of data to get started. AI is fueled by data, and so it only makes
sense that the more data you have, the smarter your AI gets, right? Not exactly.

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 When it comes to extracting intelligence by applying AI to data, context matters. In other words, you
can build the biggest data lake imaginable, but if you don’t know what you’re trying to find and you
don’t have the right data to do it, then you’re not going to get where you want to go.

That’s because AI is not some magical black box that can ingest mountains of data and then just spit
out results. AI is a huge set of technologies, each with a specific, fine-tuned purpose. Companies that
can zero-in on the impact they want to see and focus on curating the right datasets mapping to those
goals have the best opportunity for generating really impactful results from AI.

Consider how the United States Postal Service (USPS) automates mail sorting. With the help of
machines and advanced optical character recognition (OCR) technology, the USPS can now read and
process 98% of all hand-addressed mail and 99.5% of machine-printed mail without human
assistance. By linking this technology with a relatively small and finite data set of U.S. zip codes and
cities, the USPS can now process upwards of 36,000 pieces of mail per hour. With the USPS facing
harsh financial challenges in recent years, the impact of this automation is immeasurable.

Another interesting example of small, high precision data being used to make big gains with AI can be
found in the airline industry. In 2015, Boeing launched the Aerospace Data Analytics Lab in
partnership with Carnegie Mellon University to develop AI technology for airlines. One such project
aims to dramatically reduce maintenance costs with AI by standardizing maintenance logs.

Every aircraft is required to keep highly-detailed maintenance logs. However, when planes travel
around the world, communication starts to breaks down. Basic language barriers are the first
stumbling block. From there, it only gets worse. Some logs are captured digitally; others are hand-
written. Some maintenance workers stay in the lines, others jot notes and abbreviations in the
margins. For the average maintenance worker, translating these variations on the fly can be next to
impossible. But with AI and a narrow data set of common aircraft maintenance terminology, it
becomes possible to capture and dynamically translate these logs in real time. By leveraging AI to
improve the speed and accuracy of the airline maintenance workflow, airlines stand to save billions.

These are but two examples of how AI powered by precise data can lead to outsized impact. How can
you put these ideas to work for your company? There are three main steps:

Set goals that tie back to business objectives. Setting goals with a cross-functional team that tie back
to business objectives is a critical step to any undertaking, and AI is no exception. AI is prescriptive
by nature; the more narrowly you can define the business objective, and the more contextually
precise your data set, the more likely you are to get some meaningful results.

What’s often overlooked is the importance of establishing a cross-functional team with visibility
across the organization. This is essential to determine where in the organization impact is most
needed. If you build a team that brings in operations, sales, finance, and the executive suite, you are

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 more likely to figure out where the real bottlenecks and opportunities are, and you are more likely to
come up with practical solutions that actually start solving them.

Tame data chaos. Every company has a data set with unique value to their business. Often, however,
there’s a disconnect between the data and the value. You’ve captured data, but it’s not clean, precise
or actionable. A useful framework for taming data chaos and extracting small high precision data is
focusing on the lifecycles of customers, partners, and suppliers. Following the lifecycle shows you all
of the steps, systems, and stakeholders involved. As you examine these lifecycles, you will find gaps
where you are leaking value. These are your opportunities to make a clear and measurable impact.
Focus on the key data surrounding these gaps and you will have more precise and actionable data.

Select the right technology for the job. There’s a lot of buzz right now about machine learning and AI
— and it’s justified buzz. These are amazing technologies with great promise for any level of
executive in any B2C or B2B company. They are also now available at a fraction of the cost compared
to even five years ago. Don’t hire a team of a hundred data scientists; look to the growing ecosystem
and pick the right tool for the job.

In the world of digital business, companies are always looking for big bang solutions — some
breakthrough that can give them an edge. But the reality is that when you get practical, you can start
racking up lots of smaller wins — and you can do it quickly. Over time, this accumulation can drive
massive outcomes.

This is the right way to think about AI. It’s not a magical black box — it’s a highly-specialized set of
tools. It’s not about shooting for the moon — it’s about winning the ground wars. And it’s not about
mountains of data — it’s about small, high-precision data.

Praful Saklani is CEO and co-founder of Pramata, which helps enterprises digitize information in contracts to help
extract value and make the most of customer relationships.

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