Business Intelligence, Analytics, Data
Science, and AI
Fifth Edition
Chapter 2
Artificial Intelligence,
Robotics, and Smart
Systems
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Learning Objectives (1 of 2)
2.1 Understand the concepts of artificial intelligence (AI)
2.2 Become familiar with the drivers, capabilities, and
benefits of AI
2.3 Describe human and machine intelligence
2.4 Describe the major AI technologies and some derivatives
2.5 Discuss the manner in which AI supports decision
making
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Learning Objectives (2 of 2)
2.6 Describe AI applications in accounting, banking and
financial services, and other business functions
2.7 Understand basics of robotics, history, and applications
2.8 Describe chatbots, the drivers, and capabilities of
chatbots and their use
2.9 Describe the use of chatbots as advisors
2.10 Discuss the major issues related to the implementation
of chatbots
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Opening Vignette (1 of 2)
Grant Thornton Employs Aisera Chatbot to Reduce IT Help
Desk Burden
• The problem
• The solution
• The results
– Auto-resolve support requests across channels
– Automatically assign and route tickets and cases to the right
agents
– Recommend next-best-actions for ticket and case resolution
– Automate knowledge resolution and ticket/case resolution
notes
– Agent coaching with AI-driven recommendations
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Opening Vignette (2 of 2)
Review Questions
1. Have you interacted with a Website where an online
chatbot provides answers? What has been your
experience in getting your questions resolved?
2. What type of learning will be needed by a chatbot to
understand a customer’s query?
3. What other examples of chatbot applications can you
find?
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Introduction to Artificial Intelligence
• CIO Insight projected that by 2035, intelligent computer
technologies will result in $5–$8.3 trillion in economic
value
• Definitions for artificial intelligence (AI)
– Many definitions of AI exist
– Relationship between AI and logic
▪
plato.stanford.edu/entries/logic-ai
• Major characteristics of AI machines
– From chess playing machine to ChatGPT/OpenAI
– Smarter computers/machines
– Web 3.0 – enhanced with AI
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The Foundations and Applications of
AI
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Artificial Intelligence (AI) (1 of 6)
• Many application of AI exists
– Answer customer questions; provide knowledge-
based advice; automate decisioning …
– Example: Pitney Bowes Is Getting Smarter with AI
• Major goals of AI
– Perceive and properly react to changes in the
environment that influence specific business
processes and operations
– Introduce creativity in business processes and
decision making
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Artificial Intelligence (A I) (2 of 6)
• Drivers of AI
– Interest in smart machines and artificial brains
– The low cost of AI applications
– The desire of large tech companies
– The pressure on management to increase productivity
– The availability of quality data
– The increasing functionalities and reduced cost of
computers in general
– The development of new information technologies,
particularly the cloud computing
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Artificial Intelligence (AI) (3 of 6)
• Benefits of AI
– AI has the ability to complete certain tasks much faster
– The consistency of the work
▪ AI machines do not make arbitrary mistakes
– AI systems allow for continuous improvement projects
– AI can be used for predictive analysis via its capability
of pattern recognition
– AI can manage delays and blockages in business
processes
– AI machines do not stop to rest or sleep
– Many more in the textbook …
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Artificial Intelligence (AI) (4 of 6)
• Examples of AI Benefits
– ISDA uses AI to eliminate tedious activities
– AI revolutionizing business recruitment
– AI is redefining management
– Help blind people experience the world around them
– Identify overlooked borrowers
– Predict customer expectation
– Startup AI companies are emerging in large numbers
– Most impactful: customer experience and enjoyment.
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Artificial Intelligence (AI) (5 of 6)
• Some limitations of AI Machines
– Lack human touch and feel
– Lack attention to non-task surroundings
– Can lead people to rely on AI machines too much
– Can be programmed to create destruction
– Can cause many people to lose their jobs
– Can start to think by themselves, causing significant
damage
▪ Hypothetically … no evidence of that!
– Some of these limitations are diminishing with time
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Artificial Intelligence (AI) (6 of 6)
• What AI can and cannot do?
– Limitations and economic justification
• Three flavors of AI decisions
– Assisted intelligence
– Autonomous intelligence
– Augmented intelligence
• Artificial brain
– A people made machine “as intelligent, creative, and
self-aware as humans”
– To date, no one has created such a machine
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Technology Insight 2.1
Augmented Intelligence
• Combining the performance of people and
machines [combining augmenting]
– Creating synergy
• Augmented AI can
– Extend human thinking abilities, not replace them
– Solve complex problems in specific domains
– Provide insights and recommendations/explanations
– Offer new solutions by combining existing ones
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Human and Computer Intelligence (1 of 4)
• What is intelligence?
– Measured by and IQ test?
• Types of intelligence:
– Linguistic and verbal, logical, spatial, body/movement,
musical, interpersonal, intrapersonal, naturalist
• Content of intelligence
– Reasoning, learning, logic, problem-solving,
perception, and linguistic ability
• Intelligence is not a simple concept!
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Human and Computer Intelligence (2 of 4)
• Capabilities of intelligence
– Learning or understanding from experience
– Making sense out of ambiguous, incomplete, or even
contradictory messages and information
– Responding quickly and successfully to a new situation
(i.e., using the most correct responses)
– Understanding and inferring in a rational way, solving
problems, and directing conduct effectively
– Applying knowledge to manipulate environments
– Recognizing and judging the relative importance of
different elements in a situation
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Human and Computer Intelligence (3 of 4)
• How intelligent is AI?
• Comparing human intelligence with AI
Table 2.1 Artificial Intelligence versus Human Intelligence
Area AI Human
Execution Very fast Can be slow
Emotions Not yet Can be positive or negative
Computation speed Very fast Slow, may have trouble
Imagination Only what is programmed Can expand existing
for knowledge
Answers to What is in the program Can be innovative
questions
Flexibility Rigid Large, flexible
• Many more, in the book …
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Human and Computer Intelligence (4 of 4)
• Measuring AI: Turing Test (by Alan Turing) – test of a
machine/computer for intelligent behavior.
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Major AI Technologies & Drivers (1 of 2)
• Intelligent agents
– Intelligent? Autonomous? Mobile? …
• Machine learning
– “Human learning embedded into machines”
– Deep learning
▪ A part of machine learning (see Chapter 7)
• Computer vision (machine vision)
– Automated face, scene, object recognition
• Video analytics
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Major AI Technologies (1 of 2)
Figure 2.3 The Major AI Technologies
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Major AI Technologies & Drivers (2 of 2)
• Natural language processing
– Natural language understanding
– Natural language generation
– Speech (voice) understanding
▪ An interesting application cs.cmu.edu/~./listen
– Machine translation of human languages
▪ Balel fish (babelfish.com)
▪ Google translator (translate.google.com)
▪ Example: Sogou’s travel translator
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Knowledge and Expert Systems (1 of 2)
• Knowledge sourced intelligent systems
– Knowledge acquisition
▪ Identifying experts
– Knowledge representation
▪ Converting human knowledge to computer
processible form – questions and matching answers
(Q&A)
– Reasoning from knowledge
▪ Process users’ requests and provide answers
▪ Use the knowledge acquired from experts
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Major AI Technologies (2 of 2)
Figure 2.4 Automated Decision-Making Process
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Knowledge and Expert Systems (2 of 2)
• Cognitive computing
– Knowledge derived from cognitive science (the study of the
human brain)
– Self learning algorithms (uses pattern recognition, NLP,
machine vision, and other AI technologies)
– Example: IBM Watson
• Augmented reality
– Augmentation: integration of digital information within the
user environment in real time (vision and sound)
– Real + virtual combined
– Virtual reality
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AI Support for Decision Making (1 of 3)
• AI support and/or automates decision making
•
Amamzon.com is AI in hundreds of applications
• AI can
– Solve complex problems that are perceived by humans
as unsolvable
– Make much faster decisions
– Find relevant information, very fast
– Make complex calculations rapidly
– Conduct complex comparisons and evaluations in real
time
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AI Support for Decision Making (2 of 3)
• Issues and factors in using AI in decision making
– Nature of the decision
▪ Simple v s complex/creative
ersu
– The method of support
▪ Expert systems, business rules, or others
– Cost-benefit and risk analyses
▪ Optimal balance of all three is needed
– AI algorithms
▪ Right choice, write inputs are needed
– Speed – how quick the decision need to be made
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AI Support for Decision Making
Process
• AI can support various steps of the decision-making
process
• AI supports Simon’s decision-making process
– Problem Identification
▪ Perhaps the most AI prone step where relevant
insight is discovered from data and knowledge
– Generating or Finding Alternative Solutions
– Selecting a Solution
▪ Identifying the best solution from many
– Implementing the Solutions
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AI Support for Decision Making (3 of 3)
• Intelligent and Automated Decision Support
• Early attempts were Expert Systems based
• New AI approaches are more ML based
• Automated decision support applications:
– Small loan approvals
– Initial screening of job applicants
– Simple restocking
– Dynamic pricing od of products and services
– Product recommendation
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Technology Insight 2.2
Schrage’s Models for Using AI to Make Decisions
• Models for AI to make autonomous business decisions
(MIT Sloan School of Business):
– The Autonomous Advisor (human makes the final
decision based on the advice)
– The Autonomous Outsource (necessary to create
crystal-clear rules and instructions)
– People–Machine Collaboration
– Complete Machine Autonomy (automating the entire
decision-making process)
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AI Applications in Business
Functions (1 of 2)
• AI in Accounting
– Both big and small accounting companies use AI
• AI in Financial Services
• AI in Banking
• AI in Insurance Services
• AI in Human Resource Management (HRM)
– Recruitment, training, evaluation, retention
• AI Marketing and Advertising
– Arguably the most common use of AI business
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AI Applications in Business
Functions (2 of 2)
• AI in Customer Relationship Management (CRM)
– Customizing customer experience (e.g., Alexa)
– Salesforce Einstein: an AI set of CRM technologies
• AI in Manufacturing
– Increase quality, reduce cost to compete
– Defective item sensing/detection and mitigation
• AI in Logistics and Transportation
– Realtime tracking and supply chain management
– Example: DHL Supply Chain
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Analytics In Action 2.1
How EY, Deloitte, and PwC Are Using AI
• The big accounting companies use AI to replace or
support human activities in tasks such as tax preparation,
auditing, strategy consulting, and accountancy services.
• Discussion Question:
1. What are the characteristics of the tasks for which AI
is used?
2. Why do the big accounting firms use different
implementation strategies?
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Introduction to Robotics
• Everybody has a different definition of a robot
• Robot is a machine or a physical device or software that
with the cooperation of AI can accomplish a responsibility
autonomously
– Sense and effect the environment
• Applications of robotics in our day-to-day lives have been
increasing
– Fourth Industrial Revolution
– Applications of robotics in manufacturing, health, and
IT
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Overview of Robots
• Robots are moving from automation (performing repetitive
tasks) to autonomy (self initiated executed tasks)
• Imaginative robots: R2D2 and C3-P O (Star Wars)
• Factories are using robots to automate routine tasks for
the last several decades
• Consumer focused robots
– Roomba (automatic vacuum cleaner)
– Walmart is using robots to properly stock shelves
• Self driving car! (robots that we have to trust)
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Analytics In Action 2.2 (1 of 2)
Robots Provide Emotional Support to Patients and
Children
Figure 2.5 A General Schematic of a Huggable Robot.
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Analytics In Action 2.2 (2 of 2)
Robots Provide Emotional Support to Patients and
Children
Questions for Discussion:
1. What characteristics would you expect to have in a robot
that provides emotional support to patients?
2. Can you think of other applications where robots such as
the Huggable can play a helpful role?
3. Visit the Website
https://www.universalrobots.com/case-stories/aurolab/
to learn about collaborative robots. How could such
robots be useful in other settings?
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History of Robots (1 of 4)
• Humans have been fascinated with the idea of machines
serving us for a long time
• First idea of robotics was conceptualized in 320 BC when
Aristotle, a Greek philosopher, stated
• “If every tool, when ordered, or even of its own accord,
could do the work that befits it, then there would be no
need either of apprentices for the master workers or of
slaves for the lords.”
• In 1495, Leonardo Da Vinci drafted strategies and images
for a robot that looked like a human
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History of Robots (2 of 4)
• Between 1700 and 1900, various automatons were
created
• Throughout the industrial revolution, robotics was
triggered by the advances in steam power and electricity
– As the demand increased so did the efforts for more
automation
• In 1893, “Steam Man,” a prototype for a humanoid robot
was proposed by George Moore
– Composed of steel and powered by steam engine,
and could walk autonomously at 9 miles / hr
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History of Robots (3 of 4)
• In 1913, the world’s first moving conveyor belt assembly
line was started by Henry Ford
• 1920, the term robot was coined by Karel Capek in his
play Rossum’s Universal Robots.
– Then a toy robot, Lilliput, was manufactured in Japan.
• 1950s, the first commercial robot arm, Planetbot, was
developed, and used by General Motors
• In 1960s, Ralph Mosher and his team created two
remotely operated robotic arms, Handyman and Man-mate
developed
– Used hydraulic and mimicked human spine
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History of Robots (4 of 4)
• New mobile robots came into the picture
– The first one built in 1963, named Shakey
– Could move freely, avoid obstacles in his path
– Had a radio antenna, vision center, and CPU …
• The space race started with Russia’s Sputnic
• In 1976, NASA sent Viking lander to Mars
• In 1986, the first LEGO produces released by Honda
• In 1994, CMU developed Dante II, eight-legged robot
• In the near future, 2.6M significant robots are expected to
make it to the real-world
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Illustrative Applications of Robotics (1 of 7)
• Changing Precision Technology
– A mobile production company in China
– Using robotic arms to produce parts for mobile phones
– Reduced number of workers from 650 to 60 (~ 90%)
– Productivity: up by 250%; defects down from 25% to 5%
• Adidas
– Automate factories: Speedfactory in Germany and the US
– Raw material products reduced from months to days
– Agile/fast manufacturing to catch or create trends
– Additive manufacturing, robotic arms, and computerized
knitting, …
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Illustrative Applications of Robotics (2 of 7)
• BMW
– Employs collaborative robots (cobot)
– Combining humans and robots for complex tasks
– Efficient production, modernized work environment
– 60 work side by side with humans in BMW’s SC plant
• Tega
– A social bot supporting preschoolers
– Storytelling, offering help with vocabulary, …
– Uses feedback from students via reinforcement learning
– Watch the video youtube.com/watch?v=16in922J Tsw
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Illustrative Applications of Robotics (3 of 7)
• San Francisco Burger Eatery
– Flipping burgers: from human to machine
▪ The burger-making machine
▪ Not a traditional moving robot
▪ Complete, end-to-end, burger prep device
– Two machines makes 20 burgers per hour.
▪ Has 350 sensors, 20 computers, and nearly 7,000 parts
• Spyce
– Budget-friendly, mostly robot enabled restaurant
– Founded by MIT engineering graduates
– End-to-end, form order taking to preparation and service
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Illustrative Applications of Robotics (4 of 7)
• Mahindra & Mahindra Ltd.
– Indian multinational firm working with Virginia Tech
– To improve the process of harvesting tabletop grapes
• Robots in the Defense Industry
– MAARS (Modular Advanced Armed Robotic System)
▪ An upgraded version of special weapons observation
reconnaissance detection system (SWORDS) robots
that were used by the U.S. military during the Iraq war
– SAFFIR (Shipboard Autonomous Firefighting Robot)
▪ A humanoid robotic structure that get into confined
spaces, more through narrow isles and can climb
ladders
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Illustrative Applications of Robotics (5 of 7)
• Pepper
– A semi-humanoid robot
– Manufactured by SoftBank Robotics
– Is about 4 feet tall, has three directional wheels attached,
enabling it to move all around the place
– Can understand human emotions
– Can walk autonomously, recognize individuals, and can lift
their mood through conversation, avoids collusions
– Supports commends in Japanese, English, and Chinese
– Can be used in service industries as well as homes
– Has its cons too (incompetence or security issues)
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Illustrative Applications of Robotics (6 of 7)
• Use of Pepper
– Nestlé Japan has employed Pepper to sell Nescafé
machines to enhance customer experience
– Courtyard by Marriott and Mandarin Oriental are
employing Pepper to increase customer satisfaction
and efficiency
– Central Electric Cooperative in Stillwater, Oklahoma,
has installed Pepper to monitor outages
– More in the book …
• AG RO BOT
– Developed in Spain
– Delicately pics strawberries when they are at their full
maturity (a difficult task compared to other fruits)
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Illustrative Applications of Robotics (7 of 7)
• Da Vinci Surgical System
– Use of robotics in surgeries is gaining popularity
– Da Vinci system has performed thousands of surgeries
▪ It is the most ubiquitous robot used in more units than
any other robot
– It is designed to perform nominally invasive operations, can
perform simple as well as complex/delicate surgeries
– Its critical components: surgeon console, patient side cart,
endowrist instruments, and vision system
▪ Has either three or four arms attached that the surgeon
controls using master controls
– Patients who have surgery that used the Da Vinci system
heal faster than those performed by traditional methods …
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Categories of Robots
• Preset Robots
– Preprogrammed to perform the same task
• Collaborative Robots or CoBots
– Collaborate with assists to humans
• Stand-Alone Robots
– Autonomously modifies behavior, learns, and acts
• Remote-Controlled Robots
– Human controlled robots to perform dangerous tasks
• Supplementary Robots
– Enhance the existing capabilities or replace
capabilities that a human has lost or does not have
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Autonomous Cars: Robots in Motion
• Self-driving cars
• Technical, behavioral, and regulatory challenges
• The future reality: self-driving cars everywhere
• Early version of self-driving-cars
– Researchers at Carnegie Mellon used neural networks
to control an autonomous vehicle, enabled by the radio
antenna developed in 1925
• Newer Enablers – mobile phone technologies, wireless
internet, computer centers in cars, navigation maps, AI
and deep learning
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Autonomous Vehicle Development
• The heart of an autonomous vehicle system is a laser
rangefinder (or light detection and ranging – lidar device)
– Sits on the vehicle’s roof; generated 3D image of the car’s
surroundings, and combines it with high-resolution world
maps
– The process is called: mapping and localization
• Sensors, such as the four radar devises on the front and back
bumpers to see far distances to make decisions
• A detailed and current map of the road
• Mcity – a city built for testing of autonomous cars
• Google’s Waymo – one of the early pioneers. Uber, Tesla, and
all other car manufacturer are in this race.
• DOT, NHTSA, and State level laws and rulings …
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Issues with Self-Driving Cars
• Challenges with technology
• Environmental challenges
• Regulatory challenges
• Public trust issues
• Self-driving trucks
– Massive impact on logistics
• Autonomous drones and air vehicles
– For commercial and governmental businesses
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Conversational AI Chatbots
• Chatbots (chat robots) emerged in the last decade
• A computerized service that enables easy conversations
between humans and humanlike computerized robots or
image characters
• Some chatbots are equipped with NLP capabilities for
better understanding, and some with AI/machine learning
for learning and improving
• Chatbot services are often available messaging services
such as Facebook Messenger or WeChat, and on Twitter
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Types of Bots
• Regular bots: These are essentially conversational
intelligent agents.
– They can do simple, usually repetitive, tasks for their
owners, such as showing their bank’s debits, helping
them to purchase goods online, and to sell or buy
stocks online.
• Chatbots: In this category, we include more capable bots,
for example, those that can stimulate conversations with
people.
• Intelligent bots. These have a knowledge base that is
improving with experience.
– That is, these bots can learn, for example, a
customer’s preferences (e.g., like Alexa and some
robo advisors).
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Chatbots
• Drivers
– Powerful tools to build chatbots
– The quality of conversations is improving
– Demand for chatbots are increasing (allowing rapid growth
without the need to hire many service personnel)
– Helps in appealing to younger customers
• Components
– A person (client)
– A computer, avatar, or robot (the AI machine)
– A knowledge base (often stored at the cloud)
– A human-computer interface (enabler of the dialog)
– NLP that enables machine to “understand” the user
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Process of Chatting with a Chatbots
Figure 2.6 The Process of Chatting with Chatbots
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Chatbots - Drivers and Benefits
• The need to cut costs.
• The increasing capabilities of AI, especially NLP and voice
technologies.
• The ability of conversing in different languages (via machine
translation).
• The increased quality and capability of captured knowledge.
• The push of devices by vendors (e.g., virtual personal
assistants such as Alexa from Amazon and Google Assistant
from Alphabet).
• Its use for providing superb and economic customer service
and conducting market research.
• Its use for text and image recognition.
• Its use to facilitate shopping and support of decision making.
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Chatbots - Examples
• Representative Chatbots from Around the World
– RoboCoke – party and music recommender
– Kip – shopping helper
– Walnut – skill finder, helper
– Taxi Bot – cheap taxi service finder
– ShopiiBot –product and cheap price finder
– Concerning desired trips – trip advior
– BO.T – Spanish/Bolivian conversational chatbot
– Hazie – career helper
– Green Card – helps with Green Card application
– For more, please see chatbots.org/ and botlist.co/bots/
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Analytics In Action 2.3
WeChat’s Super Chatbot
• Has 1.2B members in 2022 (China based)
• Can be used for a wide variety of activities
– “Hail a taxi” to “order food to be delivered”
– “Book a doctor appointment” to “pay your water bill”
• Discussion Questions:
1. Find some recent activities that WeChat does.
2. What makes this chatbot so unique?
3. Compare the bot of WeChat to bots offered by
Facebook.
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Enterprise Chatbots
• Enterprise Chatbots: Financial Services
– Banking - Chatbots can use predictive analytics and
cognitive messaging to perform tasks such as making
payments, inquiring account details, etc.
– Example: POSB of Singapore has an AI-driven bot on
Facebook Messenger
• Enterprise Chatbots: Service Industry
– Healthcare – robot receptionist, chatty companions, …
– Education – tutors, translators, …
– Government – dialog tool for use by the public
– Travel and hospitality – tour guides, customer service
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Chatbot Platforms
• Chatbots inside Enterprises
– use chatbots to automate tasks for supporting internal
• Industry-Specific Bots
– Communicates intelligently with industry specifics
• AISER A
– Specific chatbot development platforms
– Robotic Process Automation (RPA)
• Knowledge for Enterprise Chatbots
– Proprietary knowledge versus general knowledge
– Provide advice on security or compliance
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Virtual Personal Assistants (VPA) (1 of 2)
• Assistant for Information Search
• If You Were Mark Zuckerberg, Facebook CEO
– While Siri and Alexa were in development, he develop
his own personal assistant to help him run his home
and his work
• Amazon’s Alexa and Echo
– Alexa can do many things …
– Alexa can be taught and customized for individualized
skills
– Amazon Echo, Echo Dot, and Echo Tap
– Alexa for Enterprise …
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Virtual Personal Assistants (VPA) (2 of 2)
• Apple Siri
– Siri: Speech Interpretation and Recognition Interface
– VIV: developed in 2016, by Dag Kittlaus, the creator of
Siri, as “an intelligent Interface for everything”
• Goggle Assistant
– Developed as a competitor to Siri to fit Android
smartphones
• Other personal assistants
– Microsoft Cortana (in 2016 Cortana and Bing
combined)
– Alexa and Cortana can now work together
– Samsung Bixby
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Chatbots and Professional Advisors
(Robo Advisors)
• A special category of virtual personal assistants
• Designed to provide personalized professional advice in
specific domains, especially in investment and portfolio
management
– Robo Financial Advisors
• Evolution of Financial Robo Advisors
– Robo Advisors 2.0: Adding the Human Touch
• Quality of advice provided by robo advisors?
– It depends on their knowledge embedded within
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End of Chapter 2
• Questions/Comments
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