Should Data Scientists be threatened by AlphaGo Zero?

Google unveils new AI that can "create knowledge itself"

The discussion amongst leading scientists concerning the cultural and social implications for artificial intelligence (AI) is in the daily news, resulting in a public, intellectual debate over whether AI will be a harmful, helpful, or benign influence on society. Notably among others, Stephen Hawking and Elon Musk represent the concerned thought leaders, and Mark Zuckerberg and Jeff Bezos advocate the benefits of continued AI investment.

In support of those advocates, humans face challenges in making efficient and rational decisions, specifically when a risky decision is made by an individual expert. Though we wouldn’t have conceived of this possibility five years ago, it’s now not too extreme to consider whether AI-enhanced decision-making platforms might address these challenges, leading to better outcomes in risk-laden situations like medical surgery, litigation, psychotherapy or military job placement. Recommended reading: Undoing Project by Michael Lewis; Never Split the Difference by Chris Voss.

I believe areas where machines are wonderful partners include:

  • 24-hour execution
  • Repetitive and tedious tasks
  • Tasks requiring rapid, detail-heavy calculations
  • Robust operational environments: because error adjustment is complicated
  • Detail orientation
  • Storage and retrieval
  • Collecting information from a large group of people in distributed manner

Areas where people are still necessary (and one might argue, always will be):

  • Making connections
  • Rendering and exercising judgment
  • Synthesis, interpretation, explanation, persuasion
  • Creating and being creative
  • Developing and nurturing relationships
  • Decision making and value assessments
  • Deciding when and when not to take action
  • Problem definition and resolution

With the above distinctions made, let’s take a look at whether it’s plausible for AI to replace decision scientists.  Below are the areas of decision science that require more than machine learning and AI to be successful:

  • Defining the process that generates the data
  • Designing and re-designing an analytics strategy
  • Building data integration and cleansing strategies (i.e., ETL and MDM), and specifically, making decisions about survivorship and business usage of recorded data
  • Integrating data sources and systems
  • Data cleansing, domain and rule definition
  • Optimizing the allocation of resources to customers based on analytic guidance
  • Changing the culture of the organization and how they use the result of data science to improve how the business performs and serves its customers

Despite recent advances, AI is not a new idea. With traditional, and long held concepts at its core, it’s my contention that what sets modern AI and machine learning apart is the dramatic expansion of certain data domains (i.e. speech, images, remote sensing etc.), and perhaps most importantly, the successful adoption by some practitioners with a tightly-focused investment, in a well-defined domain, to address a specific social or business challenge. Most recently, Alpha Go Zero and the OpenAI challenge in the DOTA2 game domain represent notable examples.

Regardless of much media hype, we believe the bottom line is, and always should be, how do new approaches and technologies lead to better action.  Otherwise, it’s all just an exercise in academic debate.

A Campaign Management Case Study

Credit Union takes advantage of member data to improve campaign effectiveness.

Businesses across the country are turning to data to gain a competitive advantage and improve profitability. But their success hinges on the ability to gain insights from that data – and from those insights, the ability to implement profitable change both strategically and technically across their organization.  The case of the credit union described below is the perfect example of data being collected, but not effectively utilized.

Challenge: The marketing division of this credit union had been wholly dependent on a marketing agency to run their campaigns, which as a result tended to be plain vanilla and treated most members as if their relationship with the credit unions were all equivalent. The credit union wanted to take advantage of their member data warehouse in segmenting and targeting campaigns, and in attributing responses to those campaigns in future efforts.

Solution: Corios automated the production of marketing campaigns for our client using their enterprise data warehouse as the primary data source augmented with data tables supplied by external data source providers, such as Experian. We replicated many of their campaigns in the new platform, trained them how to replicate and build new campaigns, how to modernize their campaigns using the new tool, and taught them how to use test-and-learn and analytics in their targeting strategy.

Result:This increased credit union usage by members, strengthen and deepen member access, provided real-time access to data, and increased cross-sell retention.

 

For analytics to be truly powerful, they must do more than simply process large amounts of data using a static set of statistical techniques. At Corios, we believe that powerful analytics should create new insights to be implemented and ultimately shape the decision making process.

Guided by “Competing on Analytics” – Corios’ Research on Analytics Maturity

“Competing on Analytics” was published 10 years ago, and is as relevant to business success today, as it was then.  At Corios, we wanted to build on the Davenport team’s important work by identifying: if a business enterprise finds itself in a particular rung of the analytics maturity ladder, what should it do to climb to the next rung?

Using the team’s analytic maturity tiers, we conducted our own qualitative and quantitative research in the field, based on decades of our own analytics practitioner and management consulting experience, gained through client engagements. We believe this provides a unique perspective, versus traditional approaches like survey research or interviews.

In partnership with The International Institute of Analytics, we developed an analysis of analytics maturity. We scored client cases on a range of measures, both qualitative and quantitative, in order to determine the characteristic qualities of companies at each tier of analytics maturity.

From a universe of over 200 engagements, we selected 60 engagements across 57 unique client organizations around the world (including the US, Canada, Europe and Australia). Once rated, we used statistical methods to assign each client into a cluster. We then analyzed the recommendations we delivered to each of these client engagements, and synthesized the similarities of those recommendations, and have summarized them here.

A: Competitive

  • Increase speed of deployment for models using transaction-level detail;
  • Increase alignment of IT with the business and analytics teams;
  • Increase alignment of analytics with business management, and between business teams;
  • Increase tech savvy of business teams

B: Capable

  • Build a larger analytics team
  • Build larger lists of more sophisticated models;
  • Develop a broader understanding of analytics among leadership, and a stronger alignment between analytics and decision making;
  • Develop the capability for real time scoring deployment

C: Aspiring

  • Drive cultural change to embrace analytics from the executive level down;
  • Repair the fractured relationships across business teams;
  • Move analytics from IT to the business, starting with a centralized team;
  • Develop a stronger alignment across customer strategy, and a more holistic use of analytics across products and strategies

D: Reactive

  • Increase analytics sophistication and capabilities, and grow the size of the analytics team, to maintain scale with business growth and demand for analytics;
  • Create stronger alignment between analytics and business, and among analytics teams throughout the enterprise;
  • Build a central analytics data repository;
  • Increase familiarity of business leadership with analytics capabilities

E: Aware

  • Build a customer analytics orientation from top-down;
  • Create visibility for the contribution of analytics towards revenue-contributing objectives;
  • Build an analytics data platform and company-wide initiatives to increase familiarity with analytics capabilities;
  • Modernize analytics skills among a centralized analytics team;
  • Increase IT agility in support of analytics and IT alignment with the business from the top down

To learn more, download our free book Skate Where the Puck is Headed.

Lessons Learned: Tying Operational Business Decisions to Model Scores

Data without decisions will not get you anywhere!

The typical output of a model, usually called a “score,” is essentially a ranking or estimation of the most likely business outcomes, such as the most likely customer behavior in response to a stimulus (or the absence of a stimulus).

A score is not a decision. A decision is the proactive response of the business to the prospective customer behavior, usually involving the expenditure of resources and the monitoring of the performance of this decision. In a financial services setting, examples of these decisions include marketing, sales and service contacts with customers, debt recovery activities, and financial crime prevention decisions. Outside of the financial services industry, comparable examples of decisions are markdown and assortment in the retailing market, pricing and contract design in the telecommunications industry, preventive care program development, and outreach in the health care provider industry.

Lessons learned tying model results to decisions:
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  • The best rules systems implement business rules based on judgment and experience, as well as rules that prescriptively advise the SME on the trade-offs between alternatives in pure dollars and cents terms.
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  • The best performing offers and treatments are not the ones you will issue tomorrow. Instead, they will be the offers that your organization has refined over multiple waves of disciplined, rigorous trials paired with conscientious measurement.
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  • Business teams that commit resources to decisions will require the most convincing about the veracity of the analytic model results. Ensure your analytic story about the findings and recommendations of the model are well suited to these groups. Explain the nuances of customer behavior in terms that resonate with your audience. Find a willing listener from that constituency to help you develop your explanations in advance of the big presentation.

Learn more by reading our Red Paper Model Deployment: The Moment of Truth.

4 factors to make direct marketing campaign processes more efficient

Transparency, consistency and speed

In this video, Corios is pleased to share a walk-through of a refined and more efficient marketing campaign process for a marketing team who is currently struggling with large number of campaigns, a high degree of decentralization, and a need to make all their campaign processes more agile and nimble.
By refining their processes, they hope to create greater consistency in their campaign processes, to reduce complexity and technical risk, to automate their campaign quality assurance processes, and to create greater transparency through change management.