Find business value with AI and machine learning | Baker Tilly
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Find business value with AI and machine learning
Feb. 11, 2025 · Authored by Matthew McKittrick, Austin Ulfers, Jesus Renteria
Machine learning (ML) and artificial intelligence (AI) are transforming industries by automating processes, enhancing decision-making, and providing valuable insights from vast amounts of data.
While AI is a growing buzzword, many associate it only with generative AI. However, machine learning, a subdivision of AI, focuses on analyzing data and learning from it to make predictions or decisions without being explicitly programmed. Typically, this is achieved through algorithms that identify patterns in data.
Successfully harness ML’s power to drive efficiency and innovation by understanding ML basics, its common implementation challenges, and how to identify suitable ML projects.
Machine learning categories
Machine learning can be divided into two main categories: supervised and unsupervised learning.
Supervised learning uses historical data to train models that predict future outcomes. It’s useful for classification, like detecting fraud, and regression tasks, such as forecasting sales.
Example. In fraud detection, supervised learning models use past records to identify patterns and predict fraudulent activities in new data.
Unsupervised learning focuses on finding patterns and relationships in data without predefined labels. It’s ideal for clustering similar data, like customer segmentation, and anomaly detection, like spotting outliers in market research.
Example: In customer segmentation, unsupervised learning can analyze customer data to identify distinct groups based on purchasing behavior.
Common challenges to address before implementation
Like any technology, leveraging ML successfully relies on identifying associated challenges and developing a plan to overcome them. Common ML challenges include:
Data quality and volume
One of the primary challenges in implementing machine learning is ensuring the quality and volume of data. High-quality, well-structured data is essential for training accurate models. Issues such as missing data, inconsistent formats, and errors can significantly impact model performance.
Supervised machine learning relies on historical data to predict future outcomes. This can be challenging if past data is incomplete or not representative of future conditions.
Unsupervised learning groups data into clusters without predefined labels, which can be useful for exploratory analysis but may lack clear, actionable insights.
Explainability and transparency
As machine learning models become more complex, explaining their decisions to stakeholders and regulatory bodies becomes challenging.
Data privacy and security
Collecting and processing large amounts of data raises concerns about privacy and security. Ensuring that data is stored and used securely, and in compliance with regulations, is crucial to avoid breaches and maintain trust.
Identifying good projects suitable for AI/ML
When considering which projects are suitable for AI and ML, it's crucial to identify opportunities where these technologies can deliver tangible business value.
Key factors include:
High data volume and quality
AI/ML models thrive on large datasets. Projects involving vast amounts of data with consistent quality are prime candidates for AI/ML. For example, automating customer behavior analysis across millions of transactions can reveal trends and insights that manual processes might miss.
High-quality data is essential for training accurate models and avoiding misleading outcomes. Verify the data is clean, well-structured, and relevant.
Repetitive and predictive tasks
Projects that involve repetitive tasks or require predictive analysis are ideal for AI/ML. For instance, automating the classification of support tickets based on historical data can significantly reduce manual effort and improve response times.
If historical data is available, AI/ML can be used to predict future outcomes, such as forecasting sales trends or identifying potential equipment failures before they occur.
Clear business objectives
Projects should align with clear business objectives, such as reducing operational costs, improving customer experience, or enhancing decision-making processes. The potential impact on the business should justify the investment in AI/ML.
Consider whether AI/ML fits within the broader strategic goals of the organization. Projects that support long-term objectives, such as improving competitiveness or driving innovation, are strong candidates.
Data privacy and security considerations
In projects where data privacy and security are paramount, such as in healthcare or finance, it's crucial to select models that comply with regulations and can be easily explained to stakeholders.
Evaluate the risks associated with data breaches or misuse and check that robust security measures are in place.
Potential for automation
Look for areas where AI/ML can automate routine processes, freeing human resources for more strategic tasks. For example, automating the extraction of data from multiple sources can streamline reporting and analysis.
Projects that require scaling operations, such as handling an increasing volume of customer inquiries, can benefit significantly from AI/ML-driven automation.
Monitoring and continuous improvement
AI/ML projects should include a plan for continuous monitoring and model validation. This helps the models remain accurate and effective over time, adapting to changes in data patterns or business needs.
Be prepared to refine models based on feedback and performance metrics, allowing the AI/ML solutions to continue to deliver value as the business evolves.
Effective ML implementation approaches
Once suitable ML projects are identified, create an effective implementation by incorporating the following best practices.
Identify Suitable Use Cases. Look for key indicators, such as high data volume and repetitive tasks, where ML can enhance efficiency. For example, machine learning can streamline the process of extracting and analyzing data from multiple Excel sheets.
Leverage Historical Data. Use historical data to train models for predictive tasks. For instance, historical records with known instances of fraud can be used to predict and identify future fraudulent activities.
Focus on Data Privacy, Security, and Compliance. Prioritize safeguarding the data used for training models. Use models that are explainable and compliant with regulations. Simple models, like regression, may be preferred in regulated environments where understanding the decision-making process is crucial.
Continuously Monitor and Validate Models. Regularly assess ML model’s performance and accuracy. Be prepared to handle false positives and adapt models as necessary to maintain their effectiveness.
Plan for Long-Term ML Strategy. Develop a strategic approach to integrating AI into your business. Consider how AI can provide a competitive advantage and improve long-term business outcomes.
