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Risk Management
Other books by Archie Addo published by Business Expert Press
As part of the Business Law Collection, this book discusses general princi-
ples of law for the benefit of the public through education only. This book
does not undertake to give individual legal advice. Nothing in this book
should be interpreted as creating an attorney-client relationship with the
author(s). The discussions of legal frameworks and legal issues is not in-
tended to persuade readers to adopt general solutions to general problems,
but rather simply to inform readers about the issues. Readers should not
rely on the contents herein as a substitute for legal counsel. For specific
advice about legal issues facing you, consult with a licensed attorney.
10 9 8 7 6 5 4 3 2 1
Keywords
project management; construction management; program management;
skills development; risk; artificial intelligence; analytics; ML; mitigation;
performance review; data science, and business intelligence
Contents
Acknowledgments�����������������������������������������������������������������������������������ix
Chapter 1 Introduction���������������������������������������������������������������������1
Chapter 2 Introduction to Artificial Intelligence�������������������������������7
Chapter 3 Introduction to Risk�������������������������������������������������������37
Chapter 4 Knowledge Base��������������������������������������������������������������63
Chapter 5 AI Solutions for Risk������������������������������������������������������67
Chapter 6 Identify Risk or Threat Model����������������������������������������85
Chapter 7 Risk Categorization/Classification Model�����������������������97
Chapter 8 Predicting Risk Impact Score Model�����������������������������109
Chapter 9 Risk Probability Occurrence Model������������������������������123
Chapter 10 Risk Priority Model������������������������������������������������������129
Chapter 11 Conclusion�������������������������������������������������������������������131
References�������������������������������������������������������������������������������������������135
About the Authors�������������������������������������������������������������������������������145
Index�������������������������������������������������������������������������������������������������147
Acknowledgments
Our artificial intelligence (AI) and risk expert colleagues across the world
have worked in the corporate world to acquire knowledge and expertise.
AI and risk researchers and practitioners have had a profound impact on
our thinking and on the contents of this book. Subsequently, working
with many corporate customers and serving them has greatly influenced
the preparation of this material.
Thanks to our parents, Godson Addo, Mary (Vanderpuije) Addo,
Seetharaman Centhala, Thulasi Centhala, K. Shanmugam, and S. Saroja,
for encouraging us to get an education and work diligently in the field of
our work. We do not think we would have made it this far without their
support.
We would like to extend great thanks to our families—Louvaine
Addo, Mala Srini, Kavitha Muthu—and Archie’s and Srini children:
Koushik Seethula, Shashank Seethula, Srima Seethula—Muthu’s chil-
dren: Maanasa Muthu, Sarvesh Muthu—for their collective patience with
our busy schedules.
Thanks to Editide for copyediting. We would like to extend great
thanks to Venkat and everyone at Bizstats Technologies Pvt. Ltd. who
enabled us to be Software-as-a-Service (SaaS) BizStats.AI company, which
provided one of the major inputs to write this book.
CHAPTER 1
Introduction
• Target audience
• What you can get from this book?
• What this book covers
• This book’s mind map
• Organization of chapters
ºº Introduction to Artificial Intelligence (AI)
ºº Introduction to Risk
ºº Introduction to the AI Knowledge Base
ºº Business Use Cases
ºº AI Solutions for Risk
• Conclusion
• References
Chapter Outline
• Book Introduction
• Organization of the Book
• Chapter Introduction
Target Audience
This book mainly focuses on artificial intelligence (AI) and how manag-
ers can apply AI to risk management. This book follows current trends
in AI in the branch of Natural Language Processing , Natural Language
2 Artificial Intelligence for Risk Management
Organization of
What this book cavers
chapters
Introduction
AI for risk
Introduction to
Introdution to risk
Artificial Intelligence (AI)
Risk categories
Unsupervised Supervised
Data preparation
Data preprocessing
Publish/production
of the model
Especially when dealing with data that include data collection, data
preparation, data transformation, securing the data, using the data to
align organizational AI, use cases, and much more. Figure 1.1 provides a
Introduction 5
mind map to give the reader an idea of what is covered in this book and
the organization of the chapters.
Figure 1.2 provides a mind map of AI Solutions for Risk. This figures
gives the reader a sense of which risk areas are covered with AI solutions
in this book.
Index
AI. See Artificial intelligence CNN. See Convolution neural
Artificial intelligence (AI) network
capabilities, 9–10 Contract risk, 48
characteristics of, 8 Convolution neural network (CNN),
data to, 20–21 26–27
definition of, 8–9 Copeland, Jake, 8
distraction of, 17–20 Corporate risks, 48–49
horizontal, 11 Country risk, 48
mind map of, 3–5 Country-specific risks, 46
purpose of, 11
strong, 9 Data
superintelligence, 9 to artificial intelligence, 20–21
target audience, 1–2 definition of, 21
types of, 9 Data collection
vertical, 11 risk matrix and risk trend chart,
weak, 9 81–82
Artificial intelligence (AI) adoption risk register, 81
mass unemployment, 18 samples, 82–83
Data science, definition of, 21
total human control, impossibility
Decision tree algorithm, 35
of, 18–20
Deep learning, 25–27
Artificial intelligence (AI) projects
Deep Q network, 33–34
big data ecosystem, 14–15
Departmental risks, 47
business value vs. time, 13–14
definition of, 12
Eager learners, 35
negative risk of, 15–16
positive risk of, 16–17 Fully connected neural network
value proposition, 12–13 layers, 26
Artificial intelligence (AI) solutions Functional area risks, 47
background, 68
data collection, 80–83 General risks, 57–58
project plan, 68–73
purpose, 68 Horizontal artificial
risk process life cycle, 73–80 intelligence, 11
Human senses, 10–11
Big data ecosystem, 14–15
Business risk, 48 Industry-specific risks, 46–47
Business value, 13–14 Information technology
risk, 48
Classification, definition of, 34–35 Instance-based learning, 23
Classification modeling, 35 Intelligence, 7. See also Artificial
Closed risks, 81 intelligence (AI)
148 Index