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DEFINITION

What is machine
learning and how does it
work? In-depth guide
By Linda Tucci, Industry
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Editor -- CIO/IT Strategy
Ed Burns

Machine learning (ML) is a

type of artificial intelligence
(AI) focused on building
computer systems that learn
from data. The broad range
of techniques ML
encompasses enables
software applications to
improve their performance over time.

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Machine learning algorithms are trained to find relationships and patterns

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in data. They use historical data as input to make predictions, classify
information, cluster data points, reduce dimensionality and even help
generate new content, as demonstrated by new ML-fueled applications
such as ChatGPT, Dall-E 2 and GitHub Copilot.
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Machine learning is widely

applicable across many
industries. Recommendation
engines, for example, are
used by e-commerce, social
media and news
organizations to suggest
content based on a
customer's past behavior.
Machine learning algorithms
and machine vision are a
critical component of self-
driving cars, helping them
navigate the roads safely. In
healthcare, machine learning
is used to diagnose and
suggest treatment plans.
Other common ML use
cases include fraud
detection, spam filtering,
malware threat detection,
predictive maintenance and
business process automation.

While machine learning is a powerful tool for solving problems, improving

business operations and automating tasks, it's also a complex and

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challenging technology, requiring deep expertise and significant

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resources. Choosing the right algorithm for a task calls for a strong grasp
of mathematics and statistics. Training machine learning algorithms often
involves large amounts of good quality data to produce accurate results.
The results themselves can be difficult to understand -- particularly the
outcomes produced by complex algorithms, such as the deep learning
neural networks patterned after the human brain. And ML models can be
costly to run and tune.

Ultimate Guide to Machine Learning (ML) for Businesses

Still, most organizations either directly or indirectly through ML-infused

products are embracing machine learning. According to the "2023 AI and
Machine Learning Research Report" from Rackspace Technology, 72% of
companies surveyed said that AI and machine learning are part of their IT
and business strategies, and 69% described AI/ML as the most important
technology. Companies that have adopted it reported using it to improve
existing processes (67%), predict business performance and industry
trends (60%) and reduce risk (53%).

TechTarget's guide to machine learning is a primer on this important field

of computer science, further explaining what machine learning is, how to

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do it and how it is applied in business. You'll find information on the

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various types of machine learning algorithms, the challenges and best
practices associated with developing and deploying ML models, and what
the future holds for machine learning. Throughout the guide, there are
hyperlinks to related articles that cover the topics in greater depth.

TechTarget Network
∙ Why is machine learning important?

Business AnalyticsMachine
CIO learning
Data has
Management played
ERP a progressively central role in human society Search the TechTarget Network
g Login Register

since its beginnings in the mid-20th century, when AI pioneers like Walter
News Features Tips Webinars 2023 IT Salary Survey Results Sponsored Sites More 5 Follow:  o   u
Enterprise
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Enterprise
AI AI Business
Pitts, AI Alan TuringAIand John von Neumann
Warren McCulloch, AI laid the AI More Topics 5
Strategies Careers Infrastructure Platforms Technologies CLOSE
groundwork for computation. The training of machines to learn from data
and improve over time has enabled organizations to automate routine
Tech Accelerator
u tasks that were previously done by humans -- in principle, freeing us up
for more creative and strategic work.
c Introduction

o ∙ Machine
Why learning also performs manual tasks that are beyond our ability
is machine
learning
to execute at scale -- for example, processing the huge quantities of data
important?
generated today by digital devices. Machine learning's ability to extract
i What are the
patterns and insights from vast data sets has become a competitive
different types of
n differentiator
machine in fields
learning? ranging from finance and retail to healthcare and
scientific discovery. Many of today's leading companies, including
How to choose and
Facebook,
build the right Google and Uber, make machine learning a central part of their
machine learning
operations.
model

Machine learning
As the volume
applications for of data generated by modern societies continues to
enterprises
proliferate, machine learning will likely become even more vital to humans
and are
What essential
the to machine intelligence itself. The technology not only helps
advantages and
us make sense of the data we create, but synergistically the abundance of
disadvantages of
data welearning?
machine create further strengthens ML's data-driven learning capabilities.

Importance of
What will come of this continuous learning loop? Machine learning is a
human-
interpretable
pathway to artificial intelligence, which in turn fuels advancements in ML
machine learning
that likewise improve AI and progressively blur the boundaries between
Machine
machine learning
intelligence and human intellect.
examples in
industry

What is the future

of machine
learning?

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k The four main types of machine learning and their most common algorithms.

∙ What are the different types of machine

learning?
Classical machine learning is often categorized by how an algorithm
learns to become more accurate in its predictions. There are four basic
types of machine learning: supervised learning, unsupervised learning,
semisupervised learning and reinforcement learning.

The type of algorithm data scientists choose depends on the nature of the
data. Many of the algorithms and techniques aren't limited to just one of
the primary ML types listed here. They're often adapted to multiple types,
depending on the problem to be solved and the data set. For instance,
deep learning algorithms such as convolutional neural networks and
recurrent neural networks are used in supervised, unsupervised and
reinforcement learning tasks, based on the specific problem and
availability of data.

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Machine learning vs. deep learning neural networks

Deep learning is a subfield of ML that deals specifically with neural networks
containing multiple levels -- i.e., deep neural networks. Deep learning models can
automatically learn and extract hierarchical features from data, making them
effective in tasks like image and speech recognition.

How does supervised machine learning work?

In supervised learning, data scientists supply algorithms with labeled
training data and define the variables they want the algorithm to assess
for correlations. Both the input and output of the algorithm are specified in
supervised learning. Initially, most machine learning algorithms worked
with supervised learning, but unsupervised approaches are becoming
popular.

Supervised learning algorithms are used for several tasks, including the
following:

Binary classification. Divides data into two categories.

Multiclass classification. Chooses between more than two types of

answers.

Ensembling. Combines the predictions of multiple ML models to

produce a more accurate prediction.

Regression modeling. Predicts continuous values based on

relationships within data.

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k Five types of regression algorithms in machine learning.

How does unsupervised machine learning work?

Unsupervised machine learning algorithms don't require data to be
labeled. They sift through unlabeled data to look for patterns that can be
used to group data points into subsets. Most types of deep learning,
including neural networks, are unsupervised algorithms.

Unsupervised learning algorithms are good for the following tasks:

Clustering. Splitting the data set into groups based on similarity using
clustering algorithms.

Anomaly detection. Identifying unusual data points in a data set using

anomaly detection algorithms.

Association rule. Discovering sets of items in a data set that

frequently occur together using association rule mining.

Dimensionality reduction. Decreasing the number of variables in a

data set using dimensionality reduction techniques.

How does semisupervised learning work?

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Semisupervised learning works by feeding a small amount of labeled

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training data to an algorithm. From this data, the algorithm learns the
dimensions of the data set, which it can then apply to new unlabeled data.
The performance of algorithms typically improves when they train on
labeled data sets. But labeling data can be time-consuming and
expensive. This type of machine learning strikes a balance between the
superior performance of supervised learning and the efficiency of
unsupervised learning.

Semisupervised learning can be used in the following areas, among

others:

Machine translation. Teaches algorithms to translate language based

on less than a full dictionary of words.

Fraud detection. Identifies cases of fraud when there are only a few
positive examples.

Labeling data. Algorithms trained on small data sets learn to apply

data labels to larger sets automatically.

How does reinforcement learning work?

Reinforcement learning works by programming an algorithm with a distinct
goal and a prescribed set of rules for accomplishing that goal. A data
scientist will also program the algorithm to seek positive rewards for
performing an action that's beneficial to achieving its ultimate goal and to
avoid punishments for performing an action that moves it farther away
from its goal.

Reinforcement learning is often used in the following areas:

Robotics. Robots learn to perform tasks in the physical world.

Video gameplay. Teaches bots to play video games.

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Resource management. Helps enterprises plan allocation of

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resources.

k Although the two disciplines are interconnected, data science and machine learning have
important differences.

∙ How to choose and build the right machine

learning model
Developing the right machine learning model to solve a problem can be
complex. It requires diligence, experimentation and creativity, as detailed
in a seven-step plan on how to build an ML model, a summary of which
follows.

1. Understand the business problem and define success criteria. The

goal is to convert the group's knowledge of the business problem and
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project objectives into a suitable problem definition for machine learning.

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Questions should include why the project requires machine learning, what
type of algorithm is the best fit for the problem, whether there are
requirements for transparency and bias reduction, and what the expected
inputs and outputs are.

2. Understand and identify data needs. Determine what data is

necessary to build the model and whether it's in shape for model
ingestion. Questions should include how much data is needed, how the
collected data will be split into test and training sets, and if a pre-trained
ML model can be used.

3. Collect and prepare the data for model training. Actions include
cleaning and labeling the data; replacing incorrect or missing data;
enhancing and augmenting data; reducing noise and removing ambiguity;
anonymizing personal data; and splitting the data into training, test and
validation sets.

4. Determine the model's features and train it. Select the right
algorithms and techniques. Set and adjust hyperparameters, train and
validate the model, and then optimize it. Depending on the nature of the
business problem, machine learning algorithms can incorporate natural
language understanding capabilities, such as recurrent neural networks or
transformers that are designed for NLP tasks. Additionally, boosting
algorithms can be used to optimize decision tree models.

Training and optimizing ML models

Learn how the following algorithms and techniques are used in training and
optimizing machine learning models:

Regularization.

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Backpropagation algorithms.
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Transfer learning.

Adversarial machine learning.

5. Evaluate the model's performance and establish benchmarks. The

work here encompasses confusion matrix calculations, business key
performance indicators, machine learning metrics, model quality
measurements and determining whether the model can meet business
goals.

6. Deploy the model and monitor its performance in production. This

part of the process is known as operationalizing the model and is typically
handled collaboratively by data science and machine learning engineers.
Continually measure the model for performance, develop a benchmark
against which to measure future iterations of the model and iterate to
improve overall performance. Deployment environments can be in the
cloud, at the edge or on the premises.

7. Continuously refine and adjust the model in production. Even after

the ML model is in production and continuously monitored, the job
continues. Business requirements, technology capabilities and real-world
data change in unexpected ways, potentially giving rise to new demands
and requirements.

∙ Machine learning applications for enterprises

Machine learning has become integral to the business software that runs
organizations. The following are some examples of how various
disciplines use ML:

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Business intelligence. BI and predictive analytics software use

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machine learning algorithms, including linear regression and logistic
regression, to identify significant data points, patterns and anomalies in
large data sets.

Customer relationship management. Key applications of machine

learning in CRM include analyzing customer data to segment
customers, predicting behaviors such as churn, making
recommendations, adjusting pricing, optimizing email campaigns,
providing chatbot support and detecting fraud.

k The business benefits of machine learning include

customer retention, revenue generation and cost
cutting.

Security and compliance. Advanced algorithms -- such as anomaly

detection and support vector machine (SVM) techniques -- identify
normal behavior and deviations, which is crucial in identifying potential
cyberthreats. SVMs find the best line or boundary that divides data into
different groups separated by as much space as possible.

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Human resource information systems. ML models streamline the

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hiring process by filtering through applications and identifying the best
candidates for an open position.

Supply chain management. Machine learning techniques optimize

inventory levels, streamline logistics, improve supplier selection and
proactively address supply chain disruptions.

Natural language processing. ML models enable virtual assistants

like Alexa, Google Assistant and Siri to interpret and respond to human
language.

∙ What are the advantages and disadvantages of

machine learning?
Machine learning's ability to identify trends and predict outcomes with
higher accuracy than methods that rely strictly on conventional statistics --
or human intelligence -- provides a competitive advantage to businesses
that deploy ML effectively. Machine learning can benefit businesses in
several ways:

Analyzing historical data to retain customers.

Launching recommender systems to grow revenue.

Improving planning and forecasting.

Assessing patterns to detect fraud.

Boosting efficiency and cutting costs.

But machine learning also comes with disadvantages. First and foremost,
it can be expensive. Machine learning projects are typically driven by data
scientists, who command high salaries. These projects also require
software infrastructure that can be expensive. And businesses can
encounter many more challenges.

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There's the problem of machine learning bias. Algorithms trained on data

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sets that exclude certain populations or contain errors can lead to
inaccurate models of the world that, at best, fail and, at worst, are
discriminatory. When an enterprise bases core business processes on
biased models, it can suffer regulatory and reputational harm.

k Businesses must overcome technical and risk mitigation challenges when they take on M

∙ Importance of human-interpretable machine

learning
Explaining how a specific ML model works can be challenging when the
model is complex. In some vertical industries, data scientists must use
simple machine learning models because it's important for the business to
explain how every decision was made. That's especially true in industries
that have heavy compliance burdens, such as banking and insurance.
Data scientists often find themselves having to strike a balance between
transparency and the accuracy and effectiveness of a model. Complex
models can produce accurate predictions, but explaining to a layperson --
or even an expert -- how an output was determined can be difficult.

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Careers in machine learning and AI

The global AI market's value is expected to reach nearly $2 trillion by 2030, and
the need for skilled AI professionals is growing in kind. Check out the following
articles related to ML and AI professional development.

How to build and organize a machine learning team

Prep with 19 machine learning interview questions and answers

4 popular machine learning certificates to get in 2023

∙ Machine learning examples in industry

Machine learning has been widely adopted across industries. Here are
some of the sectors using machine learning to meet their market
requirements:

Financial services. Risk assessment, algorithmic trading, customer

service and personalized banking are areas where financial services
companies apply machine learning. Capital One, for example,
deployed ML for credit card defense, which the company places in the
broader category of anomaly detection.

Pharmaceuticals. Drug makers use ML for drug discovery, in clinical

trials and in drug manufacturing. Eli Lilly has built AI and ML models,
for example, to find the best sites for clinical trials and boost the
diversity of participants. The models have sharply reduced clinical trial
timelines, according to the company.

Manufacturing. Predictive maintenance use cases are prevalent in the

manufacturing industry, where an equipment breakdown can lead to
expensive production delays. In addition, the computer vision aspect of

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machine learning can inspect items coming off a production line to

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ensure quality control.

Insurance. Recommendation engines can suggest options for clients

based on their needs and how other customers have benefited from
specific insurance products. Machine learning is also useful in
underwriting and claims processing.

Retail. In addition to recommendation systems, retailers use computer

vision for personalization, inventory management and planning the
styles and colors of a given fashion line. Demand forecasting is
another key use case.

∙ What is the future of machine learning?

Fueled by the massive amount of research by companies, universities and
governments around the globe, machine learning is a rapidly moving
target. Breakthroughs in AI and ML seem to happen daily, rendering
accepted practices obsolete almost as soon as they're accepted. One
thing that can be said with certainty about the future of machine learning is
that it will continue to play a central role in the 21st century, transforming
how work gets done and the way we live.

In the field of NLP, improved algorithms and infrastructure will give rise to
more fluent conversational AI, more versatile ML models capable of
adapting to new tasks and customized language models fine-tuned to
business needs.

The fast-evolving field of computer vision is expected to have a profound

effect on many domains, from healthcare where it will play an increasingly
important role in diagnosis and monitoring as the technology improves, to
environmental science where it could be used to analyze and monitor

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habitats, to software engineering where it's a core component of

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augmented and virtual reality technologies.

In the near term, machine learning platforms are among enterprise

technology's most competitive realms. Major vendors like Amazon,
Google, Microsoft, IBM and OpenAI are racing to sign customers up for
automated machine learning platform services that cover the spectrum of
ML activities, including data collection, data preparation, data
classification, model building, training and application deployment.

Amid the enthusiasm, companies will face many of the same challenges
presented by previous cutting-edge, fast-evolving technologies. New
challenges include adapting legacy infrastructure to machine learning
systems, mitigating ML bias and figuring out how to best use these
awesome new powers of AI to generate profits for enterprises, in spite of
the costs.
This was last updated in September 2023

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