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Issue 2

1 The Road to
Enterprise AI
1 2084
2 Shopping for
Enterprise AI The Road to Enterprise AI
3 Automation
through AI
4 Introducing
RAGE-AITM
5 Two Key RAGE-AITM
Innovations
5 The Significance of The Road to Enterprise AI
Context, Language,
Reasoning
6 AI Survey Results 2084
6 AI in the Enterprise
Gartner makes the following observations in
9 From the Gartner Files: its “Predicts 2017: Artificial Intelligence”
Predicts 2017: Artificial
Intelligence
research note.

17 About RAGE 1. By 2019, more than 10% of IT hires in


Frameworks customer service will mostly write scripts for
bot interactions.

2. Through 2020, organizations using cognitive


ergonomics and system design in new artificial
intelligence projects will achieve long-term
success four times more often than others.
driving change strategically and methodically,
3. By 2020, 20% of companies will dedicate outside of the hype zone.
workers to monitor and guide neural networks.
Wisely, Gartner’s predictions go out only three
4. By 2019, startups will overtake Amazon, years.
Google, IBM and Microsoft in driving the
artificial intelligence economy with disruptive On 25-Jan, 2017, sixty eight years after it was
business solutions. published, George Orwell’s dystopian 1984
became the number one best-selling book on
5. By 2019, artificial intelligence platform Amazon.
services will cannibalize revenues for 30% of
market-leading companies. Orwell’s Big Brother, omnipresent government
surveillance, Ministry of Truth that dispenses lies
In the same research note Gartner also provides or “alternative facts”, society at perpetual war,
a set of very helpful guidelines around navigating however dark, can still be conceptually grasped,
these early days of the resurgence of AI, and even if not understood. Extrapolating current
reality to paint a picture of the future so far
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away cannot possibly be easy, but may not have Our observations over the past couple of years,
seemed impossible at the time. Couple that with which is also backed by several industry watchers
great creativity and outstanding storytelling, and and analysts, is that Business and Technology
you had a bestseller then and now again, more leaders tend to ask questions along the following
than half a century later albeit a few decades lines, as they explore the market to seek out AI
behind schedule. Importantly, Orwell did not driven competitive advantages for their companies:
need to involve technology to paint the 1984
he imagined and did not have to deal with the • How do I sift through all the emerging AI
exponential nature of the expansion and influence technologies and the obtuse jargon of AI? How
of technology. do I understand my options?

Fast forward to today and imagine writing the • What AI technology should I bet on?
sequel “2084”. Even the bravest of authors and the
farthest seeing crystal ball gazers would admit that • Who does AI for the Enterprise? I read about
is simply not possible. The forces that our runaway self-driving cars, computers beating Gary
technological evolution will unleash by 2084 are Kasparov, and see Bob Dylan vouching for
way beyond the predictive powers of any budding IBM’s Watson’s ability to create music, but I
“How do I apply Orwell, Huxley or Nostradamus today. don’t need that to manage internal operations
technology to of my firm or design and manage customer
solve my business That however is not holding back the hype experience.
problem quickly, machinery. Futurists, analysts and even scientists
economically and in small numbers, are all contributing. Anything • Everyone else seems to be deploying AI. Am I
permanently (in is plausible in our post science fiction world. getting left behind?
a manner that is Celebrity entrepreneurs are taking pot shots with
responsive to future under-researched personal views, such as declaring All of these questions are AI centric. It presupposes
change)?” with conviction that we may all be living in a the answer. Artificial Intelligence, the ultimate magic
massive computer simulation! But even as the fine bullet of machine learning, deep learning, NLP, NLG,
line between Artificial Intelligence and the Real etc. The proverbial hammer looking for a nail. These,
Intelligence of sentient beings continues to get dear Business Leader, are “wrong questions”. You
blurred, how imminent is this brave new world and are suffering from a case of AI and Machine Learning
what should we do in the meantime? bandwagon effect. And you are not alone.

For those of us in the business of Business The right question to ask, it seems to us, is the
Technology, we will have to learn to do our thing one you have always asked, “How do I apply
against the backdrop of the hype and outrageous technology to solve my business problem
predictions and yes, some remarkable technology quickly, economically and permanently [in a
breakthroughs. How does one, distill fact from manner that is responsive to future change]?”
everything else, identify and apply emerging
technology to run our Enterprises more Try the following 10 questions. They are designed
effectively and efficiently? to help organize our technology shopping approach,
protect us from hype, and at the same time leverage
In this article we will explore a simple and the best that technology has to offer today.
effective approach to shopping for Enterprise AI
in this tricky emerging market, by first zeroing in 1. What is the business opportunity or problem I
on the right questions. This will help us arrive at a am trying to address, or how do I discover the
set of principles and guidelines to map the Road real problem or opportunity I should be going
to Enterprise AI for the next 5-10 years. Guidelines after?
that we believe will become the basis of most
Enterprise AI choices and selection during this …Growth, cost, compliance, customer
period. We will also introduce a solution built on satisfaction, responsiveness?
these principles that is already deployed in several
2. What is the business process transformation
Fortune 100 firms today.
that will solve my business problem?

Shopping for Enterprise AI …Automation of knowledge work, straight


through processing, automation of high
What are the characteristics of Business Technology variability processes, legacy modernization,
and AI we need to run the Enterprise today? others?
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3. Is there any emerging technology out there analytics systems, NLP, machine learning,
today that has solved similar problems? etc. in the same platform?

…Is it proven, is it deployed, who are the 10. How should I apply new and emerging
clients, what are they saying? What are technologies, like Machine Learning and AI?
analysts saying?
Explicit AI questions are at the end of the list. AI
4. Can my problem be solved completely / is an enabler not the destination. “AI enabled
fundamentally? Automation” or “Automation through AI” puts this
is perspective, i.e. the fundamental goal is still
…I am not interested in temporary, partial, intelligent automation.
band aid solutions like Robotic Process
Automation (RPA) or side-stepping the core Automation through AI
process challenges by simply outsourcing my
problem
Everything that can change will: decisions,
organization structures, regulations, business
5. Can my problem be solved within 90 days, so
requirements, technology standards, data
I can realize outcomes quickly?
standards, IT project priorities, internal systems,
…I am looking for true agility not IT external systems. These are the new table stakes.
development philosophies like Agile. In my
And complexity will continue to increase. And the
experience Agile and ideas like fail-fast take
rate of change will continue to increase.
the exact same time as traditional methods
to get to ultimate business outcome.
So whatever approach we adopt going forward
has to start with the idea of Flexibility or “The flip side of
6. How do I build a perpetually flexible and
Responsiveness. The flip side of the Flexibility
extensible solution that is responsive and can the Flexibility
coin is Speed…slow flexibility is the same as
adapt rapidly to change? coin is Speed…
unresponsiveness. We need both Speed and
Flexibility. slow flexibility
….I don’t want to revisit this again and again is the same as
as soon as something changes. Rather, I unresponsiveness.
The primary driver of inflexibility and sluggishness
would like to build further, go deeper, broader
in the world of Business Technology today is in the We need both
or do things differently. I want to start small
and extend, expand and iterate through new
very method we use to solve automation problems. Speed and
The software development lifecycle [SDLC] that we Flexibility.”
use cases at my pace. All without much fuss.
have had to adopt since the beginning, still stands
7. I need complete auditability. A traceable in between business need and realized solutions,
solution. separating these events by 12-24 months and
delivering rigid inflexible solutions. There are many
….Black boxes are not acceptable in my levels of translation from idea to solution, multiple
business. I need a full audit trail. hand-offs to different specialists, including
programmers, elaborate testing at every step. And
8. The solution needs to fit in seamlessly, non- the whole cycle has to be repeated with every
intrusively, into my technology environment. requirement change or fix, making the process
fundamentally slow and inflexible.
…. I need to preserve/leverage the
investments I have already made. The antidote for this decades-long, fundamental
and industry wide shortcoming is a model-
9. Can a single technology platform solve my driven automation framework where enterprise
problem end to end? applications can be assembled near real time,
where the distance from idea to realization is a
…Don’t push the burden of completing one-step journey, no translations, no programming.
incomplete solutions on me. I don’t want to No new code required or generated. All
have to choose from an inventory of systems applications, big or small, complex or simple, that
and deal with integration problems. I want is built on a fully model driven platform will add
everything required to solve my business no lines of code. All business logic resides as
problem, like workflow systems, ETL, metadata.
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The next task would be to ensure this model- Introducing RAGE-AITM


driven enterprise application development
platform, is broad enough to address and RAGE-AITM, from RAGE Frameworks, was designed
contain most process automation activities and built on the principles above. It enables
from data ingestion, processing, output generation real time AI powered Enterprise Application
and distribution, managing work orchestration development. It is designed to solve broad end-to-
and distribution, etc. And assembling a process end mission critical business problems quickly and
automation solution should be a simple visual flexibly. This is accomplished via a set of twenty
modeling exercise, requiring no specialized skills, building blocks or engines that intelligently
to ensure easy and fast development and rapid automate all/most business processes in their
implementation of changes. entirety. Solving a process automation problem in
its entirety is the key. Solving a part of it would be
“The RAGE- Finally, we need to integrate AI and machine
very sub-optimal, as stepping out of the solution
AITM platform learning capability, and deep learning technology
assembly framework would involve programming
is a pioneering that is fully traceable. If we could pull all of this
and the traditional SDLC and the speed and
platform, driving into a single platform we would have a very strong
flexibility advantages of a no-code model driven
the emergence affirmative response to every question on the
paradigm would be lost.
of intelligent shopping list above.
businesses.” Such a platform would be ideally positioned to
The RAGE-AITM platform is a pioneering platform,
driving the emergence of intelligent businesses.
enable Automation-through-AI, Analysis-and-
It is business process centric from the ground
Transaction Processing, Learning-and-Execution,
up. The platform fosters a business process
Work-and-Workflow, Speed-and-Flexibility, all on
oriented thinking. Because processes can be
the same platform.
institutionalized in and executed by intelligent
machines, it makes the whole debate around
functional vs process oriented organizational
design somewhat moot. You can be both.

FIGURE 1 RAGE-AI Platform

Source: RAGE Frameworks


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Intelligent machines will be the process glue in intelligence’ and integrate the insights with the rest
the organization. of the business in a systematic and meaningful way.

Two Key RAGE-AITM Innovations Most work on Big Data analytics today however
relies on computational statistical methods
and produces ‘black box’ solutions. While such
The RAGE-AITM platform embodies two key
approaches are likely to suffice for homogeneous
technology innovations – zero-code, model-driven
data sets, for many real world issues, we need
software development using highly abstract
to be able to trace the reasoning that machines
components, and traceable machine learning.
find and deploy. So executives can understand
Zero-code Model-driven Flexible Software ‘why’ and ‘how’. Black boxes won’t suffice. RAGE
Development: AITM has pioneered deep learning technology
based on linguistics and is attempting to elevate
Using RAGE-AITM, the entire software application natural language processing to natural language
development lifecycle can be reduced to a understanding.
modeling exercise using an extensive array of
abstract components. The platform has 20 abstract Intelligent machines built on RAGE-AI™ perform
components that together enable the rapid, data two functions: provide insight to humans to
driven implementation of end-to-end business enable the optimal design of intelligent business
processes including complex, knowledge intensive processes through continuous analysis of vast “In addition
tasks. Entirely new applications can be assembled amounts of data, and automatically execute to analyzing
rapidly and modified at will2. business transactions without human assistance complete data
based on an automated business process designed sets instead of
Using the platform, we can also create flexible by humans. Using AI methods, machines will
small samples
software frameworks. These frameworks are a acquire knowledge from continuous analyses of
of data, the
complete skeleton of a certain set of business vast amounts of data. Such knowledge and insight
will be provided to humans to create/refine their ability to analyze
processes and can be configured at any level unstructured text,
of granularity to suit a specific enterprise. For designs.
offers an exciting
example, the commercial lending framework
Several industry-first Intelligent Machines or opportunity
modeled on top of RAGE-AITM is one such
framework. It provides a default set of business solutions built on RAGE-AITM have been deployed for enterprises
processes out of the box but enables every aspect in Banking, Consulting, CPG, Manufacturing, High to become
of those business processes to be configured by Tech and Insurance industries. ‘intelligent’.”
clients without any programming. Zero-code,
The tag line for RAGE Frameworks Inc., “It’s
model-driven software development is a key
Possible”, attempts to say in a couple of words,
innovation which will unleash a significant number
what has taken years of continuous innovation to
of application level innovation in the years to
produce.
come. The benefits accrue from the model driven
architecture that such platforms will rely on.
The Significance of Context,
Traceable Machine Learning Language, Reasoning
There have been huge strides in the use of AI to Today, artificial intelligence (AI) is rapidly
analyze the vast amounts of digital information emerging out of R&D labs and into the
that has become available today. The excitement mainstream. Smart technologies are changing
here has to do with the ability to analyze large every aspect of our lives, from the way we work, to
data sets and let the machines discover patterns in health care, education, travel, and transportation.
the entire population instead of making arbitrary One example: the self-driving cars produced by
assumptions about how the data might behave in Google and Tesla. There are also many successful
the real world. In addition to analyzing complete applications in the computer vision space.
data sets instead of small samples of data, the
ability to analyze unstructured text, offers an But what about the non-vision applications of
exciting opportunity for enterprises to become AI: that is, areas including non-spatial data –
‘intelligent’. They can systematically automate most importantly, text and numbers? Because of
knowledge-intensive processes like ‘competitive AI’s revolutionary potential, its applications in
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non-vision problems have attracted tremendous The second challenge—understanding context—is


interest. There have also been attempts to related to the language problem, but is sufficiently
replicate what worked with spatial data and significant that it should be thought of as an
apply it to text (and numbers)… a blind rush of independent issue. Natural language text needs to
computational, statistically based approaches be processed in the right context. The right context
to process natural language. Such approaches can only be developed if the technology focuses
attempt to turn text into data and then look for on the language structure, not just on the words
deep patterns in that data. in the text, as most current technologies seem
to be doing, according to a 2014 article in IEEE
“AI technologies
AI technologies must overcome three challenges Computational Intelligence Magazine. Then there’s
must overcome to be successful in the non-vision world (and the third challenge: the traceability of reasoning
three challenges perhaps even in the vision world): language, that the solution deploys to reach its conclusion.
to be successful context, and reasoning.
in the non-vision Various technologies are attempting to address
world (and A recent MIT Technology Review article, “AI’s all three challenges today. Several successful
perhaps even in Language Problem,” eloquently points out the enterprise AI solutions deal with language,
the vision world): first challenge. Today’s AI technologies, including context, and reasoning transparency effectively.
language, context, those IBM Watson and Google Alpha Go, struggle
and reasoning.” to process language the way that humans do. To address the language challenge in AI, we have
That’s because the large majority of the current to understand the language by using its linguistic
implementations approach text as data, not as structure and the principles we have learned to
language. They apply the same techniques that express our thoughts. A deep understanding of the
worked on spatial data to text. linguistics structure in text would involve applying
several principles from computational linguistics
to decompose the text back into the concepts
and verbiage used to connect them in the text in
context. This is essentially reverse-engineering the
text back to its fundamental ideas to understand
how those ideas were connected together to form
FIGURE 2 AI in the Enterprise sentences and paragraphs.

RAGE-AITM applies deep linguistic learning and


natural language understanding to interpret text
in its context and keeping the reasoning visible
at all times. With the adoption of deep linguistic
learning, we can maintain full and complete
visibility to the reasoning.

AI Survey Results
RAGE conducted a survey with a targeted group to
get to the heart of what senior leaders would value
most in the AI solutions that they are looking
for. The survey included 132 senior business
executives, 67% of whom were C-level execs,
including CEOs, COOs, CIOs, and CTOs. 80% of the
respondents were from companies with greater
than $1 billion in annual revenues.

The survey topic was “Can artificial intelligence


deliver for today’s enterprise”.

The response to the question “What capabilities


Source: RAGE Frameworks are important to the AI solutions you would invest
in?” are shown below in Fig 2. Not surprisingly
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Context, Language and Reasoning, bubbled up The AI shopping list and RAGE-AITM
to the top.
1. What is the business opportunity or problem I
AI in the Enterprise am trying to address, or how do I discover the
real problem or opportunity I should be going
after?
RAGE has a set of widely deployed and ready-to-
deploy intelligent machines built on RAGE-AITM,
…Run AI enabled rapid diagnostics to zero in
providing Automation through AI in the Banking,
on areas of biggest opportunity, where they
Consulting, CPG, Manufacturing, High Tech and
are not already obvious.
Insurance industries. See Fig 3. In addition, a
broad range of custom solutions have also been 2. What is the business process transformation
developed on RAGE-AITM. that will solve my business problem?
As an example, RAGE’s Wealth Management ….Once you have a response to question #1,
solution, LiveWealthTM, is currently being used run further analysis on the process, using
by 3 of the top 5 global wire-houses for servicing RAGE-AITM to determine how best to solve the
their high net worth and institutional clients. This process problem
Intelligent Machine has three core modules. One that
aggregates data for assets held away with hundreds of 3. Is there any emerging technology out there
custodians, automatically dealing differences in form today that has solved similar problems? “RAGE-AI applies
and format in which the data is sent, often on paper. deep linguistic
The second is a performance analytics and flexible ….Yes. With broad deployment dealing with learning and
reporting module. The third module, Active Advising, leading edge AI challenges. natural language
has five intelligent agents that support the advisor
understanding
and enable them to be more effective at their job. One 4. Can my problem be solved completely / to interpret text
of these intelligent agents for example continuously fundamentally?
monitors portfolio performance and alerts the advisor in its context
on specific actions.  and keeping the
reasoning visible
at all times.”

FIGURE 3 RAGE Intelligent Machines

Source: RAGE Frameworks


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….Yes. AI driven intelligent and deep 10. How should I apply new and emerging
automation, work and workflow automation. technologies, like Machine Learning and AI?

5. Can my problem be solved within 90 days, so ….RAGE-AITM has industry leading AI technology
I can realize outcomes quickly? built in. It addresses most of the challenges of
prevalent AI technologies today in the context
….Yes. Enterprise scale mission critical of business processes.
solutions have been built on RAGE-AITM and
deployed in less than 90 days. The technology, the approach and the proof points
above are a good representation of the state-of-
6. How do I build a perpetually flexible solution the-art “AI in the Enterprise”
that is responsive and that can adapt rapidly
“RAGE-AITM has to external and internal changes? While perhaps less exciting than drones delivering
industry leading Amazon packages and driverless cars delivering
AI technology ….All solutions built on RAGE-AITM are take-out, the state-of-the-art AI in the Enterprise
built in. It fundamentally flexible. All process is now enabling us to automate things that were
addresses most configuration and behavior are stored as data, previously written off as automation proof.
of the challenges easy to set up and easy to change, at any
of prevalent AI time. So if one were to write a futuristic book today, not
as a sequel to Orwell’s 1984, but as a tentative
technologies
7. I need complete auditability. A traceable peek into the future of Business Technology, and
today in the solution. if it were titled 2025, then we could hazard a
context of guess that it will include several of the elements
business ….All analysis RAGE-AITM is fully traceable described here.
processes.“ to source and all solutions come with a
complete audit trail. By 2025 the execution of processes and
enterprises would be largely automated. They
8. The solution needs to fit in seamlessly, non- would be run on AI technology that simulates the
intrusively, into my Technology environment… nuances of human behavior [the sledgehammer
…RAGE-AITM solutions can be introduced of statistical algorithms would be relegated to
non-intrusively. For a legacy modernization lesser problems], that can understand language
exercise for example, RAGE-AITM solutions and context, a framework that can solve big
can be introduced in the cloud, or inside the problems in their entirety. As several Fortune
client’s firewall, while retaining all systems of 100 companies using RAGE-AITM are already
record, which can be gradually integrated into experiencing.
and/or replaced by the RAGE solution at the
pace desired by the client. Source: RAGE Frameworks

9. Can a single technology platform solve my


problem end to end?

….Yes. The twenty engines of RAGE-AITM


is broad enough to address most business
process automation problems.
9

From the Gartner Files:

Predicts 2017: Artificial Intelligence

Artificial intelligence is changing the way in Through 2020, organizations using cognitive
which organizations innovate and communicate ergonomics and system design in new artificial
their processes, products and services. Practical intelligence projects will achieve long-term
strategies for employing AI and choosing the right success four times more often than others.
vendors are available to data and analytics leaders
right now. By 2020, 20% of companies will dedicate workers
to monitor and guide neural networks.
Key Findings
• Chatbots driven by artificial intelligence (AI) By 2019, startups will overtake Amazon, Google,
will play important roles in interactions with IBM and Microsoft in driving the artificial
consumers, within the enterprise, and in intelligence economy with disruptive business
business-to-business situations. solutions.

• Smart machines need to be properly set up, By 2019, artificial intelligence platform services
maintained and continuously governed if they will cannibalize revenues for 30% of market-
are to be of maximum benefit to the enterprise. leading companies.

• Smaller “boutique” vendors are offering Analysis


chatbots targeted at specific industries and can What You Need to Know
perform niche tasks that the big-name players This year’s Predicts are gathered under the topic
— like Amazon, Google, IBM and Microsoft — of “artificial intelligence.” While we continue to
are not equipped to provide. use the term and notion of “smart machines,”
vendors and end-user organizations are familiar
• Large AI vendors must adjust their strategies with the term “artificial intelligence,” so we will be
to compete with the smaller, more-nimble increasingly applying that term in this research area.
competitors that are threatening to dominate
the market. Smart machines won’t run themselves, no matter
what the movies and TV have shown since Fritz
Recommendations Lang’s Metropolis. AI continues to drive change
Application leaders, data and analytics leaders and in how businesses and governments interact
strategists should: with customers and constituents. And our 2017
predictions show that the humans — as is always
• Find workers who excel at internal the case in computing change — are the pivot on
communications and articulating processes to which AI can turn.
lead bot scripting and development.
Organizations must plan through their adoption
• Seek out proposals from smaller AI vendors for of AI because such fundamental changes always
specific project needs. require agility.

• Establish skills programs for developers in Organizations must concentrate on:


algorithm testing, content acquisition and data
employment in artificial intelligence projects. • Identifying key roles, the workers that will fill
them and the metrics they will have to meet.
Strategic Planning Assumptions
• Considering smaller, disruptive vendors and
By 2019, more than 10% of IT hires in customer
service providers.
service will mostly write scripts for bot
interactions.
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• Implementing suitable methodologies for Chatbots are growing in popularity because


execution. AI systems can manage customer and worker
progress through a decision tree more effectively
• Planning tactical and strategic targets for than human direction can. The next generation
projects. of customer interaction chatbots will cause less
customer frustration. For example, machine
• Recognizing that AI may threaten core learning could effectively employ useful contextual
assumptions about revenue sources and data to skip a concern several levels in the service
volume. hierarchy more reliably than a worker could.

Excitement about artificial intelligence is growing Chatbots are just one category of AI applications
rapidly. Gartner analysts’ conversations with that will drive disruption in many businesses. To
clients have grown in number exponentially in the make AI opportunities a large-scale proposition
last two years. As can be seen in Table 1, there rather than isolated curiosities, companies will
were 14 inquiries with Gartner clients that used need to invest in AI programs.
the term “Artificial Intelligence in 2014.” In 2015,
there were 89, an increase of more than 500%. Agile enterprises will seek out AI vendors with
As of the end of the third quarter of 2016, Gartner the best solutions. Large vendors like Google
had fielded more than 290 queries about artificial and Amazon dominate, but smaller vendors
intelligence since January, representing a greater offering more-targeted AI products are on the rise.
than 200% increase only partway through the year. Enterprises should make sure they seek out these
smaller vendors when searching for AI solutions.
Implementing chatbots, for example, is a business
imperative for organizations with extensive Employing AI offers enterprises the opportunity
customer service needs. Chatbots will soon deliver to give customers an improved experience at
customer satisfaction at significantly lower cost every point of interaction, but without human
than human customer service agents. But building governance, the opportunity will be squandered.
and maintaining the neural networks required will
take dedicated workers with specific skills.

FIGURE 1 Inquiries to Gartner About Artificial Intelligence (AI)

Record Count
2,500

2,000

1,500

1,000

500

0
2014 2015 2016

Source: Gartner (November 2016)


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Strategic Planning Assumptions These bot scripters will also be able to handle
exceptions (where the bot cannot identify the
Strategic Planning Assumption: By 2019, more correct next step and has to hand the task to a
than 10% of IT hires in customer service will human operator).
mostly write scripts for bot interactions.
As chatbots get better at helping customers,
Analysis by: Martin Reynolds more calls will be handled automatically —
and with higher satisfaction. Customer service
Key Findings:
representatives will have time to deal with tougher
questions… and the tougher customers.
• Chatbots generate the best returns when
backed by well-scripted decision trees written
Over time, AI may lead us to new ways to support
by dedicated staff.
customers. However, the decision tree, because
of its high-quality results when it successfully
• The best scripters understand the business and
completes an interaction, will underpin bot
how customers interact with it.
services for some time to come.
• Programmers are not the best choice to design
By way of evidence, we have companies such
customer service interfaces.
as IPsoft, Nuance and x.ai building bot systems
that use the “human augmented” approach.
Market Implications:
Sometimes, bot agents open up with the question
Chatbots hold the potential — through natural- “tell me, in a few words, what you want to
language processing — to make the customer do.” This opening allows a smarter bot to start
experience easier, faster and more satisfying while interacting with a customer at a deeper location in
furthering business goals. Chatbots have access the tree.
to available knowledge about the customer and
It is also worth noting that, in China, WeChat
how similar customers responded. But they need a
public account chatbots are becoming the new
great “navigator” to deliver the best results.
face of commerce. It is critically important to build
The fundamental technology that underpins a customer-facing bot strategy now.
chatbots is not changing. It is a decision tree
Recommendations:
that leads the customer to the right result.
The tree structure gives good answers with
• Hire dedicated people to write bot scripts.
correct grammar. One AI transformation is the
introduction of highly reliable speech to text. The
• Interview the best employees in your call
text tags result in better navigation of the tree.
center as potential bot scripters.
Every enterprise has the opportunity to improve
its business incrementally by tapping into the • Recognize that good quality chatbots may
potential of chatbots. For the enterprise, investing significantly improve some informational
now to make such communication models work aspects of operations.
effectively will pay dividends for years.
Strategic Planning Assumption: Through
The key is hiring the right people to shape the 2020, organizations using cognitive ergonomics
knowledge tree to customer needs, and identifying and system design in new artificial intelligence
the customer keywords that drive the correct projects will achieve long-term success four times
moves within the tree. Programmers are typically more often than others.
not well suited to this task, as it requires both a
customer service touch, and in-depth knowledge of Analysis by: Kenneth F. Brant
the business.
Key Findings:
Instead, dedicated bot scripters are the answer. Call
center workers often have the needed skills to be • Gartner’s inquiries indicate that organizations
effective bot scripters. They understand the business are not approaching AI and smart machines
as well as how customers think when shopping holistically or as systems with implementation
for a product, making them effective at choosing challenges different from traditional IT.
keywords and linking nodes in the right way.
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• AI and smart machines are in the early stages This concept is important with respect to the
of innovation and commercialization; vendors ease of adding and updating content in smart
report they are subject to much greater “churn” machines, the ease of tuning the various
in the marketplace than traditional IT offerings elements of smart machines (such as the
and that end-user IT organizations struggle with optimum combination of content, algorithm(s)
new system requirements. and user interface), the ease of appending,
reformatting and expanding content, plus the
• Organizations investigating AI and smart ease of retraining the neural network.
machines have focused prematurely on
evaluating technology categories and/or Recommendations:
vendor evaluation selection before acquiring
the skills and methodologies for successful CIOs and enterprise architects must:
implementation.
• Balance their organization’s current focus
• Success in defining the “art of the possible” on the “what” and the “who” of artificial
and in tech-focused proofs of concept (POCs) intelligence to include more attention to the
for AI and smart machines is often followed by “why” and the “how” of implementations in
difficulties in scaling and maintaining system order to drive long-term value through human
performance. factors and design principles.

Market Implications: • Reskill their organizations to include holistic,


related competencies in content acquisition,
CIOs must evolve their workforce — and strategic preparation, updates, algorithm testing, training
partnerships with service providers — if they are to and retraining of neural networks, design for
achieve sustainable change in the disruptive era human acceptance and effectiveness, and
of smart machines. CIOs must reallocate budgets design for high-reliability systems.
and resources while acquiring new competencies
within their organizations. • Conduct POCs with the actual professionals
who will use the smart machine in order to gain
Deploying smart machines means that CIOs must insights into the human factors that will drive
take into account several factors that affect the usage and effective outcomes. The success
enterprise’s ability to both prove and sustain value of these POCs should not be based on the
in smart machines: conclusions of data scientists in a laboratory
environment.
• Cognitive Ergonomics: As defined by the
International Ergonomics Association, cognitive • Build the proven benefits of cognitive
ergonomics is concerned with “mental ergonomics and design for maintainability
processes, such as perception, memory, observed in human-centered POCs into their
reasoning, and motor response, as they affect change management programs for smart
interactions among humans and other elements machines.
of a system.” This is a subset of the larger field
of human factors and ergonomics. Strategic Planning Assumption: By 2020, 20%
of companies will dedicate workers to monitor and
Part of the human factors field, employing guide neural networks.
cognitive ergonomics ensures that the mix of
smart machines and human workers is effective Analysis by: Magnus Revang
and augments the intelligence of both in
problem solving and decision making. Key Findings:

• System Design for Maintainability: System • Many enterprises view smart machines as
design is the transformation of an idea into a magical investments that need neither tending
system that meets the designer’s requirements nor updating once they are deployed.
and the end user’s needs. Maintainability is the
degree to which the design can be easily and • While many enterprises have data scientists
economically repaired. doing dedicated work on advanced analytics
13

and machine learning in other parts of the neural network. Instituting a robust governance
company, there is little collaboration with IT structure establishes how responsibility is divided
and these systems are traditionally maintained among areas of the organization.
outside of the IT application portfolio.
Smart machines hold the potential to further
• Many CIOs have not prioritized the skills business goals through the use of neural networks,
needed to implement, maintain and update which are becoming more adept at creating
neural networks, leading them to either play models based on datasets than are their human
catch-up or cede that responsibility to other counterparts. At the same time, effective use of
parts of the enterprise. neural networks requires a change in thinking
and redeployment of IT staff. Resources currently
• Much of the hype around smart machines used for development will be needed to feed the
focuses on the relatively few places they are endless retraining loop that allows neural networks
employed in public and fails to consider the to maintain their value to the enterprise.
thousands of places artificial intelligence is
already used in the background systems of Recommendations:
enterprises.
• Completing POC exercises is imperative for
Market Implications: CIOs to show the value in the smart-machine
era.
The assumption that smart machines with neural
networks can be deployed as a finished project • CIOs must look outside of programmers to
— with no consideration to the challenges of hire data scientists and other staff members
continuously maintaining and monitoring the with the skills to create and maintain neural
implementation — will lead to failure for many networks.
enterprises. In reality, neural networks need to be
retrained constantly as data is collected. No longer • CIOs need to make the business case for neural
can models stand the test of time for two or three networks to ensure the project is properly
years like they did in the 1980s. Today’s models funded.
are only good until new information becomes
available. Strategic Planning Assumption: By 2019,
startups will overtake Amazon, Google, IBM and
An example of the retraining needed to keep Microsoft in driving innovation in the AI economy
neural networks working at their best can be seen with disruptive business solutions.
in the way modern automobiles adapt to their
drivers. A trip to the mechanic that results in an Analysis by: Jim Hare
adjustment to the gearbox causes the car’s “brain”
to restart the process of learning the driver’s Key Findings:
habits. It’s the same for any neural network that
receives new data. • Every software application (and business
process) is likely to become more intelligent as
CIOs need to understand that workers with new more vendors embed AI capabilities into their
skill and a new way of looking at problems solutions.
are needed for successful retraining of smart
machines. Developers, with their typical binary • CIOs must find the AI vendors that offer
approach (it works or doesn’t) have a difficult domain-specific solutions that best align with
time working with neural networks. People with their businesses to help automate and improve
different backgrounds — in design, data science decision making. The number of startups
and logic, for example — have the mindset to work offering AI solutions is accelerating. Research
with neural networks. firm CB Insights reported 140 AI startups in the
first quarter of 2016, up from 70 in all of 2011.
Separation of responsibilities for neural networks Other sources suggest there are now 2,000 to
will be split among different parts of the enterprise, 3,000 AI-related firms (see “Entering the Smart-
making it essential for CIOs to remain relevant by Machine Age”).
ensuring IT owns the platform that is running the
14

• Many startups are led by employees who often and marketing departments) to improve decision
previously worked on AI projects at big vendors making are also popular. Smart machines take
like Amazon, Google, IBM and Microsoft. data and send salespeople off to focus on the most
promising opportunities. CRM vendor Salesforce
Market Implications: has acquired a number of smaller AI-savvy
companies to take advantage of the possibility of
The explosion in the number of vendors offering more-effectively supporting its clients.
AI and machine-learning solutions has created a
gold rush with small startups threatening to grab The proliferation of industry- and domain-specific
most of the nuggets from the big vendors that get applications from specialist firms is an opportunity
most of the hype. The robustness of the AI economy for enterprises to use packaged “smart analytics”
is evident in the $1.5 billion in equity capital raised solutions to leverage increasing levels of data
by 200 startups, as reported by CB Insights. These and more-sophisticated analytics to improve
startups are focused on building businesses to solve and augment their decision-making processes —
difficult real-world problems with AI at the center. without the need to hire teams of data scientists.
Still, end-user organizations should be mindful of
Employees who learned the basics, and even built avoiding the risk of standardizing on just one or
the AI technologies at the big vendors, have moved two AI specialists given the acquisition euphoria
on to start their own firms. These small vendors offer underway and how fast the technologies are
products tailored to specific industries or lines of evolving.
work. Of course, many of these startups will likely
be acquired or try to stay independent to become Recommendations:
giants themselves. According to CB Insights, over
140 private companies working to advance AI • CIOs should analyze key business processes
capabilities have been acquired since 2011, with to locate the areas where AI could be applied
more than 40 acquisitions taking place in 2016. to augment and improve human decision
making, especially in underserved areas of the
While many startups are focusing on industries organization that lack access to analytics.
ripe for disruption like healthcare — for example,
to help discover drugs and offering care — any • Data and analytics leaders need to understand
industry that collects data that can be analyzed can both the benefits and limits of AI. The goal
benefit from the power of AI. The use of AI in retail, is to find the right way to blend humans
financial services, investment advising and call and machines. For example, AI capabilities
centers, among others, has proven its ability to help such as deep neural networks (DNNs) can
companies make smarter decisions in less time with perceive patterns that humans can’t detect.
more context, and to get to the next best action They can also “program” a model to classify
decision quicker than possible by a human alone. from large bodies of data and, under certain
circumstances, be more effective and efficient
For example, in healthcare, “computer assisted than other approaches. But if the available data
diagnosis” has been used to review the early falls below a threshold, no amount of artificial
mammography scans of women who later intelligence can solve the problem.
developed breast cancer, and the computer spotted
52% of the cancers as much as a year before the • CIOs should investigate and evaluate packaged
women were officially diagnosed. Many online AI solutions in the market before considering
news publishers like AP, Fox, and Yahoo use AI building a custom AI solution from scratch.
to write simple stories like financial summaries, There are new startups emerging almost every
sports recaps and fantasy sports reports. AI isn’t yet day focused on solving different business
writing in-depth investigative articles, but it has no problems. Packaged AI solutions can usually
problem with basic reports that don’t require a lot be deployed faster and require less technical
of synthesis. resources to support.

With data collection rising, the places where Strategic Planning Assumption: By 2019,
humans can match the ability of machines to artificial intelligence platform services will
make real-time decisions will be precious few. cannibalize revenues for 30% of market leading
Solutions to help lines of business (such as sales companies.
15

Analysis by: Frances Karamouzis including business intelligence, e-commerce, and


healthcare.4 Above and beyond these investments,
Key Findings: Baidu, the Chinese internet search giant, has
created a $200 million venture capital unit to
• From 2010 through 2015, funding in the AI invest in artificial intelligence projects.5
sector has multiplied nearly sevenfold.
These venture capital investments into startups
• Since 2000, 52% of large global companies and R&D initiatives within existing firms will
have gone bankrupt, have been acquired or certainly lead to a huge proliferation of new
have ceased to exist. business ideas that will cause significant
disruption to conventional products and services
• Many company failures have resulted from offered by the current market leaders. These new
companies that did not see the disruptive AI platform services will cannibalize revenues of
forces in their respective industries coming, the largest companies as they will be focused on
and/or failed to adapt and shift once a big tightly coupling products and services together to
disruption was upon them. create a customer experience that permeates for
a longer time, and is defined by new and different
Market Implications: commercial structures.
There is a series of studies that all reach similar The next big shift is convergence of technology
conclusions — market-leading companies that get products and services to create next-generation
disrupted or disintermediated face their demise. service offerings that will include AI platforms.
A landmark study showcased that, over the last More specifically, Gartner defines these next-
35 years, the rate of failure for leading global generation service offerings as “intelligent
companies is accelerating.1 The same study found automation” services that use one or more AI
that more than half of these companies have gone technologies (such as a cognitive-computing
bankrupt, have been acquired or have ceased to technology platform) as the basis of an offering’s
exist. core value proposition.
A study by Standard & Poor’s found that the average These AI platform services offerings include AI
life span of a company listed in the financial (or AI-related) technologies as part of their core
company’s index of leading U.S. companies has platform or underpinning. Such inclusion often
decreased by more than 50 years in the last century, requires R&D investment to achieve an aggregated
from 67 years in the 1920s to 15 years today, (tightly bundled) solution that ensures predictable,
according to Professor Richard Foster of Yale.2 reliable outcomes. This often results in a relatively
large portion of value being derived from IP,
John Chambers, former CEO of Cisco, was quoted accelerators and verticalization, as opposed to pure
as saying “More than one-third of businesses today labor or licensing.
will not survive the next 10 years. Companies
should not miss the market transition or business This notion of combining technology and services
model nor underestimate your competitor of the marks the key shift from labor-driven to IP-driven
future — not your competitor of the past.”3 offerings, and results in different commercial
terms, which are based on outcomes. In this
One of the leading causes of disruption is a variety structure, commercial terms are directly tethered
of artificial intelligence technologies. Some do not to distinctive business results (outcomes in the
fit the exact definition of AI, but employ various form of completed transactions or fully enabled
technologies such as deep neural networks, processes) where payment is triggered by delivery
machine learning or some type of cognition- of the AI platform service. This is juxtaposed
based functionality. In fact, the investment against more-conventional commercial terms,
community has recognized this and responded which are defined by licensing of software or
with record level investment. AI startups have services that are priced by labor hour, which places
raised an aggregate $967 million in funding since the focus on effort (input) rather than output.
2010, with investments going to companies
in 13 countries and 10 industry categories,
16

Recommendations: and is a prominent aspect of the Windows 10


operating system, as well as being part of a range
CTOs and CIOs should: of consumer applications. Cortana was announced
in 2014, and its integration to Office 365 was
• Take a strong lead in your industry by announced and previewed in 2015.
developing multidisciplinary, cross-functional
teams in order to track, adopt and execute Missed: 2012 Prediction — By year-end 2017,
POCs for AI platform services. 25% of workers will engage search in business
applications through natural expression at least
• Focus on multiple ideation workshops per five times daily.
year and many POCs to ensure you are part of
the successful companies that will engage in Analysis By: Whit Andrews
disrupting others rather than being disrupted.
We predicted in 2012 that by year-end 2017,
• Be dynamic and vigilant about iteratively 25% of workers would engage search in business
exploring the changing landscape of market applications through natural expression at least
offerings, provider investments, competitor five times daily. At the time, Siri’s effectiveness
adoption, and related regulatory, legal, ethical was improving and IBM Watson was impressing
and societal shifts. organizations with its effective deconstructions
of natural expression in popular demonstrations.
• Ensure this is an enterprisewide initiative Google Now also grew in prominence as Android
with CEO sponsorship and funding. There will incorporated it more broadly. However, APIs to the
be lots of small passionate teams across the VPAs did not emerge as swiftly as we expected
organization that are exploring and trying them to do (more have become available in the
new options. It’s important that everyone recent past, but notably, they are more accessible
is connected, coordinating and sharing. from consumer-only specialists such as Facebook,
While each team may be going at a different Alexa and WhatsApp). And only two in five of the
cadence and velocity, there should be periodic references for the 2015 Enterprise Search Magic
knowledge sharing and IP exchange. Quadrant indicated that their search vendor
supports natural-language question answering. We
A Look Back still expect this model to become stronger, largely
In response to your requests, we are taking a look through improved “autosuggest,” as APIs continue
back at some key predictions from previous years. to mature.
We have intentionally selected predictions from
opposite ends of the scale — one where we were Evidence
wholly or largely on target, as well as one we 1
“Startup Survival, Failure and Growth,” Kauffman
missed. Report.

On Target: 2013 Prediction — By 2016, 2


“Can a Company Live Forever,” BBC News.
Microsoft will offer virtual personal assistants in
Microsoft Office 365. 3
“Retiring Cisco CEO Delivers Dire Prediction: 40%
of Companies Will Be Dead in 10 Years,” Business
Analysis By: Whit Andrews Insider UK.

We predicted in 2013 that by 2016 Microsoft 4


“Baidu Launches $200 Million Venture Capital
would offer virtual personal assistants (VPAs) in Unit Focused on Artificial Intelligence,” South
Microsoft Office 365. We were correct, in that the China Morning Post.
Cortana (which had not yet been announced or
described at the time) now integrates to Office 5
“Deep Interest in AI: New High in Deals to
365. The product is not exclusive to or embedded Artificial Intelligence Startups In Q415,” CB
in Office 365, but it is key to Microsoft’s strategy Insights.
17

About RAGE Frameworks


RAGE Frameworks Inc. is a leader in knowledge-
based automation technology and services
providing AI for the Enterprise. RAGE-AI™ is a no-
code patented platform for end-to-end automation
of knowledge-based processes. RAGE-AI™ is
currently used by some of the largest banks,
manufacturers, consulting companies, high tech
firms, and logistics companies. Headquartered in
Dedham, Massachusetts with global operations
centers in Pune and Belgaum, India, RAGE offers
unprecedented speed, flexibility and insight in
solving today’s most complex, critical business
problems. Visit us at www.rageframeworks.com

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