Section 5:

Artificial Intelligence in
Decision Making
Decision Making for Business
and Strategic Choices

Prepared by Teddy Bakhos

 Introduction to BI Analytics
What Analytics means?
• Analytics refers to a more systematical,
automated, and flexible process of data analysis
for revealing insights and decision support in
more extensive application areas (beyond
organizational contexts), like sports, disease,
network traffic, etc.

• Analytics initially referred to advanced statistical

modeling. Now, analytics refers to the entire
domain of leveraging information to make smarter
decisions. In other words, reporting and analysis.

• Analytics is geared more toward future

predictions and trends, while BI helps people
make decisions based on past data.
 Introduction to BI Analytics
What Analytics means?
• Both of Business Intelligence and Business
Analytics are data management solutions
implemented in companies and enterprises to
collect historical and present data, while using
statistics and software to analyze raw information,
and deliver insights for making better future
decisions.

• While Business Intelligence (BI) involves taking a

look at past, present and historic operations and
collecting data, Business Analysis (BA) is about
using data to identify the current challenges and
predicting future hardships and gearing business
towards better productivity and a more stable future.
 Introduction to BI Analytics
What Analytics means?
• Big data: – Big Data is not a system; it is simply a way to say that you have a lot of data.
– Big data covers various data formats including text, blob, multimedia, etc.

• Data science: – Processes and systems to extract knowledge or insights from data in various forms.
– Focus on advanced analytics and presentation models and methods.
– Using autonomous or semi-autonomous techniques and tools, typically
beyond traditional
BI to discover deeper insights, make predictions, or generate recommendation.

• All these new terms try to differentiate them from the traditional BI. However, if one considers BI is a
dynamic and evolving field, then all these new terms are just extensions/expansions of BI; they all still fall
under the umbrella of the general BI.

• In its comprehensive usage, BI is all of the systems, platforms, software, technology, and techniques that
are essential for the collection, storage, retrieval, and analysis of data assets within a given organization.
 Introduction to BI Analytics
What Analytics means?
 Introduction to BI Analytics
Business Analytics Applications Sample:

• Business Management: • Marketing and Sales:

– Strategic planning
– Performance management
– Process intelligence
– Competitive intelligence
• Human Resource / Capital:
– HR analytics
– Talent management
– CRM
– Customer behavior analysis
– Targeted marketing and sales strategies
– Customer profiling
– Campaign management
– Inventory management
 Introduction to BI Analytics
Business Analytics Applications Sample:

• IT Management: • Supply chain and Logistics:

– Web analytics – Supplier and vendor management
– App analytics – Shipping and inventory control
– Security management
• Education:
• Government: – Learning analytics
– City planning – Student engagement and success
– Traffic management – Institutional effectiveness
– Urban Analytics
– Power usage • Insurance
 Artificial Intelligence (AI)
What is Artificial Intelligence?

• Artificial Intelligence is the development of

computer systems that are able to perform tasks
that would require human intelligence.

• Examples of these tasks are:

− Visual Perception
− Speech Recognition
− Decision-Making
− Translation between languages
 Artificial Intelligence (AI)
What is Artificial Intelligence?
• AI refers to machine intelligence or a machine’s ability to replicate the cognitive
functions of a human being. It has the ability to learn and solve problems.

• In computer science, these machines are aptly called “Intelligent Agents” or “Bots”.

• Not all AI are alike. In fact, what is considered artificial intelligence has shifted as the
technology develops.

• Today, there are three recognized levels in the AI spectrum, all of which we can
experience today.
 Artificial Intelligence (AI)
What is Artificial Intelligence?

• Assisted Intelligence: This refers to the automation of basic tasks. Examples include
machines in assembly lines.

• Augmented Intelligence: There is a give and take with this one as an AI learns from
human input, then in turn we can make more accurate decisions based on AI
information: “There is a balance with augmented intelligence.”

• Autonomous Intelligence: This is AI with humans out of the loop. Think self-driving
cars and autonomous robots.
 Artificial Intelligence (AI)
What is Artificial Intelligence?

• Real life AI examples:

− Self Driving Cars
− Navigation Systems
− ASIMO (humanoid robot created by Honda)
− Chatbots (like Siri)
− Human vs Computer Games
− Boston Dynamics Products
− Many More…
 Artificial Intelligence (AI)
What is Artificial Intelligence?

• Weak AI:
Machines with weak Artificial Intelligence are made
to respond to specific situations, but can not think
for themselves.

• Strong AI:
A machine with strong AI is able to think and act just
like a human. It is able to learn from experiences.
Since there are no real life examples of strong AI
yet, the best representation would be how
Hollywood portrays robots.
 Artificial Intelligence (AI)
Benefits of Artificial Intelligence:

• The most important purpose of AI is to reduce human casualties in:

− Wars
− Dangerous Workspaces
− Car Accidents
− Natural Disasters

• Or to just make everyday life easier such as:

− Cleaning
− Shopping
− Transportation
 Artificial Intelligence (AI)
Benefits of Artificial Intelligence:

• Decision making is an inherently human activity that can

have significant impacts.

• It is perhaps not surprising that researchers have attempted

to improve the quality of decisions by developing computer
technologies to augment and extend human capabilities.

• Advances in Artificial Intelligence (AI) have made this goal a

reality in many applications.

• These AI-integrated decision making support systems, or

intelligent decision support systems (IDSS) for short, are
increasingly used to assist in corporates’ decision making.
 Artificial Intelligence (AI)
Artificial Intelligence in Decision Making:

• The term “Intelligent” is used to describe systems that

mimic human cognitive capabilities in some way. These
systems employ AI tools to reason, learn, remember,
plan and analyze.

• Many AI tools and software, when combined with

Decision Support Systems (DSS), can help a decision
maker in evaluating and selecting alternatives.

• Such systems are particularly helpful in complex

problems that involve uncertainty, large amounts of
data, and are not deterministic.
 Artificial Intelligence (AI)
Artificial Intelligence in Decision Making:

• Decision Support Systems (DSS) are a specific class

of interactive information computer systems that assist
decision makers to use data, models and knowledge
with the aim to solve complex problems and support
business and organizational decision making activities.

• There are many types of DSS specialized for different

types of users and problems, designated for one or
multiple decision makers.

• Since they are developed to solve common or specific

problems there are many different kinds of DSS.
 Artificial Intelligence (AI)
Artificial Intelligence in Decision Making:
What are Intelligent Decision Systems (IDSS)?
IDSS are DSS exhibiting some or all of the abilities that are indicative of “intelligent behavior”:
− Learn or understand from experience
− Make sense out of ambiguous or contradictory messages
− Respond quickly and successfully to a new situation
− Use reasoning in solving problems
− Deal with confusing situations
− Understand and deduce in ordinary and rational ways
− Apply knowledge to manipulate the environment
− Recognize the relative importance of different elements in a situation
 Artificial Intelligence (AI)
Artificial Intelligence in Decision Making:
According to architecture, sub technologies and decision support techniques used for decision making, five
relevant applications of DSS are separated:
− Model-driven DSS
− Data-driven DSS
− Communication-driven DSS
− Document-driven DSS
− Knowledge-driven DSS

Intelligent decision support systems (IDSS) are developed in response to the organizational need of
intelligent decision support. These systems are based on knowledge and generated as the combination
of DSS and AI.
 Artificial Intelligence (AI)
Artificial Intelligence in Decision Making:
• This approach adds value to business processes by applying expert system technology that can encapsulate
the knowledge of experts in the form of knowledge reasoning which helps in solving complex decision problems.

• A large number of various IDSS has been developed as support for decision making in enterprises, with different
architectures.

• General architecture model consists of four basic subsystems:

− Database Management Subsystem
− Model Management Subsystem
− User Interface Subsystem
− Knowledge Management Subsystem

…separated in different modules with feedback loops, according to tasks that have been done in decision making
process.
 Artificial Intelligence (AI)
Artificial Intelligence in Business:
• According to Dr. John Kelly: “The success of
cognitive computing will not be measured by
tests or a computer’s ability to mimic humans.

• It will be measured in more practical ways, like

return on investment, new market opportunities,
diseases cured and lives saved”.

• Yes, AI technology isn’t the end but only a means

towards effectiveness and efficiency, improved
innovative capabilities, and better opportunities.
And, we’ve seen this in several industries that
have begun to adopt AI into their operations.
 Artificial Intelligence (AI)
Artificial Intelligence in Business:
• Prior to the resurgence of AI and its eventual
commercial application, executives have had to
rely on inconsistent and incomplete data.

• With artificial intelligence, they have data-based

models and simulations to turn to.

• Today’s AI systems start from zero and feed on a

regular diet of big data.

• This is augmented intelligence in action, which

eventually provides executives with sophisticated
models as basis for their decision-making.
 Artificial Intelligence (AI)
Artificial Intelligence in Business:

• Arguably, there shouldn’t even be the more practical scare of losing people’s jobs to
machines. Experts say that AI can actually enhance people’s jobs and allows them to
work more efficiently.

• And surely, this rings true with respect to decision-making. When decision-makers and
business executives have reliable data analyses, recommendations and follow-ups
through artificial intelligence systems, they can make better choices for their business
and employees.

• You don’t just enhance the work of individual team members. AI also improves the
competitive standing of the business.