Role	Entity
Author	Joseph Byrum
Collection Name	The Intelligent Enterprise
Publishers	– MIT Sloan Management Review – IISE – INFORMS OR/MS Today – INFORMS Analytics
Years Published	2018-2024
Main Subject of the Series	Intelligent Enterprise
Has Parts	– Leading the Intelligent Enterprise – Progress Towards the Intelligent Enterprise – Engineering the Intelligent Enterprise – How the Intelligent Enterprise will Drive Innovation – The Intelligent Enterprise – AI: The Path to the Intelligent Enterprise – Winning as the Intelligent Enterprise – Lockdown Lessons for the Intelligent Enterprise

Published at IISE (Joseph Byrum) and re-published at BINUS University (Joseph Byrum)

Science fiction writers say the businesses of the future will be run by self-aware robots. After all, these devices can make intelligent decisions unclouded by fear or other emotions. They will work 24/7 without the need for pay, break time, unionizing or vacation. Such an enterprise would outperform the fallible human competition at least until the last act of the story, when the robots inevitably go rogue.

While last minute twists are critical to an entertaining plot, more sober researchers in the artificial intelligence field explain that we are far from achieving the general intelligence needed for a robot-run enterprise to become reality.

So the question then becomes: How do we extract the greatest performance out of what we know today is possible with man and machine? The starting point must be to distinguish the strengths and weaknesses of each.

Northwestern University psychology professor Paul Reber, Ph.D., estimates human have a memory capacity roughly equivalent to 2.5 petabytes of storage, though direct comparisons are obviously difficult. Whatever the exact figure, human memory is finite, though one can always add more storage arrays to ensure a machine will never “forget.”.

Mankind, on the other hand, can perform some impressive mental feats. Rajveer Meena, who can recite pi to 70,000 digits in 10 hours, Scott Flansburg, who add a randomly selected two-digit number to itself over and over 36 times with only 15 seconds, and Vikas Sharma, who calculated 15 large number roots in one minute. These demonstrations, recognized by Guinness World Records as the height of human ability.

While the most talented human can’t come close to competing against machines in arithmetic and memory, don’t take the logical leap to conclude that machines are better at reasoning. The increasingly ubiquitous digital assistants are as deeply frustrating as they are impressive, with quite a way to go before they can be considered replacements for humans.

The reason for this is straightforward. The assistants rely upon preprogrammed responses and Wikipedia entries to generate answers to expected questions. This makes them more like digital parrots with a large vocabulary than intelligent AI systems with a grasp of language and nuance. To say they lack critical thinking abilities is not to deny their usefulness. Rather, it is a recognition of the inherent limits of the underlying technology used in these machines.

Humans excel at judgment and creativity. We can take ideas, mix them together and think outside the box to create works that are truly new. Constrained by logic, machines cannot come up with responses that aren’t preprogrammed. Everything they do is, by definition, programmed. They can only simulate spontaneity.

Sure, AI has made art, movies, poetry and music. The AI creates what passes for art by sampling a range of different examples of paintings, movies, poems and songs. It uses learning algorithms to extract the various elements common to each, then generates and recombines those elements in a “new” way using pseudo-random number generation.

This output has the appearance of creativity without the inspiration. There is no emotional connection to the subject matter any more than there is an understanding of the meaning of the brush strokes or musical notes. Where the machines fall short, humans excel. Likewise, the qualities humans most lack can be supplemented by machines. The intelligent enterprise recognizes this and pairs the most powerful aspects of machines – analysis and memory – with the most powerful aspect of humans – judgment and creativity.

Machines are not excel in judgment and creativity because causal reasoning is not easily reduced to mathematical calculation. As the work of UCLA computer scientist Judea Pearl has shown, mining statistics and then applying a few calculations to a data set cannot come close to creating an AI capable of matching wits with a human. Pearl has done outlining the mathematical models of causation necessary to assist machines to answer the question “Why?”

He describes what he means using a classic example of causal inference in The Book of Why that he co-authored with Dana Mackenzie: “A fire broke out after someone struck a match, and the question is ‘What caused the fire, striking the match or the presence of oxygen in the room?’ Note that both factors are equally necessary, since the fire would not have occurred absent one of them. So, from a purely logical point of view, the two factors are equally responsible for the fire. Why, then, do we consider lighting the match a more reasonable explanation of the fire than the presence of oxygen?”.

This problem can be reduced to the form of a counterfactual expression, revealing that the probability that lighting the match caused the fire is greater than the probability the presence of oxygen. This form of reasoning provides an insight not available from simple statistics that can only point us toward associations.

The ability to distinguish correlations that matter from those that don’t can unlock crucial analytical capabilities. A cognitive engine that can perform some level of causal evaluation can excel at sorting data in terms of its importance, separating the noise, likely a coincidence, from the signal – information that reveals significant trends.

Knowing “why” something is the case extends the power of AI far beyond mere imitation. Technology approaching the qualities of human intelligence still is not capable of replacing the human mind. Today’s cognitive engines have nowhere near the level of self-awareness created by sci-fi writers for generations. They are merely tools; what we can do with them is make the most of business processes that can benefit from causal analysis.

Even armed with causal reasoning, a cognitive AI system is not particularly effective by itself. There is only so much that can be accomplished by processing data, evaluating the most relevant factors and simulating potential actions. When experienced human users took output and spots data that conventional methods would have overlooked, the value of augmented intelligence became clear. Such systems allow humans to act on better intelligence, making choices informed by a solid understanding of probable outcomes.

AI in the form of augmented intelligence assists human experts in completing tasks with greater efficiency. With causal inference, an AI system can, for instance, better target marketing efforts by understanding which groups are truly interested in a product and avoid spurious correlations. Civil engineering schools won’t waste efforts marketing their graduate programs to mozzarella cheese lovers, but more important uses are taking shape in the healthcare sector.

variant is a company that helps large hospitals optimize marketing efforts by predicting patients’ upcoming needs by analyzing medical data. At first, the company hand-coded each algorithm it used, devising a new solution for each customer. Then it realized there was a better way. It turned to DataRobot, a firm that offered a system to sort through hundreds of algorithms and find the one for each particular application that would be statistically reliable and valid. This was not a replacement for Evariant’s data scientists; rather, the system took over mundane and routine coding tasks, freeing experts to perform more effectively.

The benefits of augmented intelligence extend beyond marketing departments and data science teams. Even enterprise lawyers can now take advantage of systems like Klarity, which reads through standard contracts to decide if it’s worth the time for an attorney to review the terms or if it’s just the usual boilerplate with no real risks. The system draws out all the important terms of the agreement so they can be reviewed at a glance and checked in detail when necessary. The tool helps bypass the legal bottleneck and speed up the approval of important deals.

Combining the analytical power of machines with the judgment and creativity of a human is an arrangement I compare to an “Iron Man” suit. In the movies and the comics, Tony Stark is just an ordinary man when it comes to physical ability. Once he dons his AI-powered suit, his overall effectiveness grows as the suit makes suggestions and manages the small details. The fictional example shows us the value of pairing the human’s best abilities with the best abilities of the machine.

For the role of AI in business, it wouldn’t be a physical suit but a software suite that endows a financial analyst, factory manager or CEO with powers that exceed those of ordinary humans. The enhanced judgment would deliver better optimized performance, and a business built around such technology would rightly be called an intelligent enterprise. Though augmented intelligence does not make for as entertaining a story, it does make for a profitable company. Considering the competitive edge that augmented intelligence can provide, most future businesses will likely become intelligent enterprises. All the rest won’t be works of fiction; they’ll be works of history.