Why In-House Artificial Intelligence Projects Fail

Companies all over the world, from giant corporations to start-ups, are keen to cash in on the vast value of Artificial Intelligence. With an intent to capture as much of that value as possible, many spend millions on in-house AI solution development rather than outsourcing to address their most critical business challenges. In a world where there’s a feasible DIY solution for almost everything, Artificial Intelligence is most often the outlier. The complexity and cost of AI solution development demands experience to reduce financial risk and ensure speed to benefit, especially in highly competitive sectors.

Think of your business as a human body, and your business challenges as illnesses of varying severity. Some challenges, like some illnesses, are treatable with over the counter medications, while others require a visit to the doctor, prescriptions, long-term treatment or intensive care. If you had an illness that required extensive medical attention, you wouldn’t hesitate to seek out the best medical team for treatment. Should you treat your business any differently?

In deciding whether to go in-house or outsource, it is important to consider how a strategic AI implementation will impact your business. If it’s done right, it will reduce costs, increase revenue and enhance competitive advantage. If it’s done wrong, to what extent is your business at risk?

Financial opportunity from AI abounds across sectors (see the figure below), and there is both margin opportunity and market share on the table for the businesses that harness AI to tackle their strategic challenges first. In other words, getting your AI implementation done fast and right matters, and you must weigh your decision to go in-house or outsource accordingly.

Artificial intelligence (Al) has the potential to create value across sectors. 
Al impact, 
$ billion 
700 
500 
400 
Healthcare systems 
and services 
Public and social sectors 
300 
Advanced electronics/ 
semiconductors 
Retail 
Transport and logistics 
Travel 
Consumer packaged goods 
Automotive and assembly 
Banking 
Basic materials 
Insurance 
Media and 
entertainment 
High tech 
O Oil and gas 
100 
20 
Telecommunications 
Pharmaceuticals 
and medical 
products 
30 
Chemicals 
Agriculture 
Aerospace and defense 
40 
50 
60 
McKinsey&Company 
Share of Al impact in total impact derived from analytics, % 
Source: McKinsey Global Institute analysis

With competitive advantage on the line and the clock ticking, corporations place their bets on whether to navigate the AI journey alone or with partners. Instinctively, they are hesitant to collaborate, tantalized by the prospect of minimizing solution costs, while building their own innovative capacity and owning the resulting IP outright.

Logically, they then look to market outcomes and learn why in-house AI solution development efforts fail more often than not, even in the Fortune100 and at tech companies.

Without experience developing and delivering AI solutions, many corporations fail understand the costs, resources, processes, stakeholders, and even the objectives involved from the onset. As a result, in-house projects often lack a clear and viable design and delivery strategy, roadmap and KPIs, dramatically reducing the speed to benefit if not inhibiting benefit delivery altogether. Program costs and timelines become a driving force for failure. With little transparency into which aspects of the solution will drive the most value, there is no clear way to prioritize spending. Costs either spiral out of control, or corners are consecutively cut in design, development, testing and delivery, resulting in piecemeal solutions that impair data quality, promote bias and diminish solution accuracy, functionality, utility and outcomes.

More often than not, successful AI adopters partner with proven providers on a combination of off-the-shelf solution tailoring, ground-up solution design and solution delivery. How do they decide to partner rather than go it alone?

First, they recognize the competitive imperative for AI—the opportunity cost of following rather than leading in their market—along with the direct costs of failure, and their lack of in-house knowledge and experience with AI solution design and delivery. Second, they find a provider with a successful track record in similar or analogous environments. Third, they develop trust with that provider by laying the groundwork for a happy marriage in contracting. Then they see it through. From the leadership level-down, they commit to the partnership and collaborate from end-to-end to ensure project success.

Strategic AI implementations are broad in scope, capturing data and impacting activities across corporate ecosystems. This complexity is readily apparent in industry, where AI not only provides data-driven direction for decision-making at every step of the value chain and in every organizational department, but directly informs control and automation strategies in production, testing, packaging, distribution and even purchasing.

In recognition of the immense value and complexity of AI in industry, and the competitive need for speed in adoption, the World Economic Forum, in collaboration with McKinsey & Company, has published a toolkit of “practical recommendations” for industrials to accelerate their AI journey at scale. Appearing in The Next Economic Growth Engine Scaling Fourth Industrial Revolution Technologies in Production, this toolkit advocates the adoption of proven AI solutions and related technologies through a partnership and acquisition approach rather than in-house development.

Figure 6: Industry toolkit for accelerating adoption of technology 
Value delivery engine 
Intelligence 
• Predictive maintenance 
• Machine learning-supported, 
root-cause problem-solving 
for quality claims 
Connectivity 
Augmented reality-guided 
assembly operations 
Real-time IOT-based 
performance management 
Flexible automation 
• Robots to automate 
challenging tasks 
• Real-time product release 
39 high-impact digital applications ready for deployment 
Scale-up engine 
Mobilize 
Mobilize the 
Organization 
Strategize 
Set the vision and the 
value to capture 
Innovate 
Spark innovation by 
demonstrating the 
value at stake 
Scale up 
Capture full value 
& Company, Fourth in With the World

With more and more data available for exploit across industries, the opportunities for its monetization through AI are greater and increasingly complex. So too is the risk of getting your implementation wrong.

Can your business afford the DIY approach?


Challenge us to solve your unsolvable business quandaries.


Processing…
Success! You're on the list.

Alexa, How are you using my data?

Smart Home technology is a well saturated market with technology that just a short few years ago many thought could not be possible. We have long talked about voice assistants and video enabled devices but now technology that was once thought to be futuristic has arrived, seemingly omnipresent in many households around the global. Not only are Artificial Intelligence enhanced video enabled devices now available but they come in many varieties, from home protection to two-way video chatting with your pet.


Video “chat” with a pet?….

When did animals start chatting?


With these ever present devices in so many households – cameras, digital assistants, smart TVs, smart thermostats and more – are we enhancing our physical privacy or actually putting it in jeopardy? Are the benefits, such as automation, smart phone remote capabilities and more, worth the risk of data privacy?

Are you taking advantage of Smart Tech, or is it taking advantage of you?

So what’s the big deal if your smart home has data that’s making your life easier? Amazon’s Alexa can make it easier for you to order more household items. Google Home can integrate with Google Nest to allow you to control your A/C by simply telling it to change the temperature. All great features that help make things a little bit more convenient in our day to day, but what exactly are these companies doing with our data?

Amazon is pretty transparent in regards to the voice data Alexa is storing, a quick look on their website tells us that. But what about Google, their biggest competitor in the Smart Home space? Google is fairly transparent as well, though as previously mentioned in the intro post, changing your privacy settings may impact your service. Google’s privacy policy website tells us that they are mostly using your saved data to improve searches and targeted ads, see this video below:

These are great examples of transparency from these corporations and they outline relatively mundane uses for your data but it’s still important to understand. The future consequences of these corporations having your stored data should be the biggest concern. Google’s CEO Eric Schmidt said in 2010:

“One of the things that eventually happens … is that we don’t need you to type at all,” later adding: “Because we know where you are. We know where you’ve been. We can more or less guess what you’re thinking about.”

Eric Schmidt

Adapt that quote to the Smart Home and eventually Google doesn’t need you to speak to Google Home, rather the A/C just changes to suit your pre-determined preferences when you arrive home because of patterns in your stored data combined with Artificial Intelligence. Alexa doesn’t need you to tell her to order paper towels, they just show up because all of your stored data has told them it’s time for another shipment.

While these specific examples of transparency regarding data storage are promising, consider how much you’re willing to give away and where the line is with your data privacy. Consider the fact that these devices are always listening and while the corporations behind them may be simply using this data to “train” their AI, the government or third party apps could be using this data for other reasons.

In 2018 law enforcement subpoenaed Amazon for Amazon Echo data as evidence in a criminal trial for murder. The lines between privacy, technology and criminal justice are changing daily. Amazon is not the only tech company that has had this happen, Fitbit and Apple have run into similar situations.  While most technology companies are quick to defend consumer privacy the question still stands:


How much of your personal privacy are you willing to
give away?


Letting AI into our daily lives is not something to fear but maintaining control over data and privacy should be a top concern. There’s many ways to protect your privacy, or at least limit your exposure, while utilizing the benefits of Smart Home tech. Awareness is the first step in achieving enhanced privacy. Visit 101 Data Protection Tips for a comprehensive list of ways to attempt to protect your privacy.


Up next: Data Privacy Part Four


Processing…
Success! You're on the list.


Robotics: Automation or Artificial Intelligence?

The rise of robotics – a long touted seismic shift in human existence, the day an inanimate creature is brought to life.  A scary reality in the minds of many conspiracy theorists, and a reality many tech leaders would have us believe is already upon us.  But how close are we to engineering a robotic race?

“Who controls the past controls the future. Who controls the present controls the past.”

George Orwell, 1984

It’s difficult to not think about physical robots tackling common human tasks when we see the word robotics, but now robotics refers to a much larger application of technology and rising industry. Robotics refers to a focus on creating efficiency and replicating mundane tasks, a world that exists beyond purely physical robots, giving rise to automation bots.

Robotic Process Automation (RPA) is an example of an automation bot operating in a digital world. You may be thinking, obviously it’s automation, it’s even in the name, but what is RPA? Used to perform simple, repetitive tasks, such as data entry, RPA is a programmable “bot” that automates a process in order to free up more time for humans that would otherwise be doing these mundane tasks. RPA cannot be considered Artificial Intelligence as it does not have the ability to understand the implications of the tasks it is performing, or predict future scenarios arising from the performance of these tasks.

Amazon Scout

In contrast, Amazon’s Scout is out on the streets in California, a physical robot, making package deliveries.  This Scout robot may be physical and operate in the real world but similarly to RPA it is another example of automation, lacking human intuition. Just like RPA this Scout robot is programmed to deliver a package straight to your door, removing this repetitive task, lessening the burden on man and machine, but the bot is not capable of modifying the delivery location to the back door under the overhang when rain is predicted, unless the delivery instructions are explicitly programmed to do so.  Far from artificial intelligence, the Scout is simply a machine programmed to automate a repetitive human function.

While individuals commonly mistake robotics as artificial intelligence, it’s important to understand why RPA and delivery robots are not examples of true artificial intelligence. Are they intelligent bots? Maybe. They certainly process and execute complicated instructions and factor many variables, but they lack inherent cognitive function.  Humans are constantly concerned about the demise of humanity as robots are brought to life, but because artificial intelligence still lacks the ability to replicate common sense, the rise of the robotic race will still remain in the halls of science fiction.



Processing…
Success! You're on the list.

Data Privacy Series

When’s the last time you read the terms and conditions before clicking “accept” as you downloaded the hottest new app to your smartphone? Do you really know what companies are doing with your data from your search history, the pictures on your phone, or even your personal health records?

How our data,
personal details and digital patterns, is being used by the scores of apps,
programs, and devices we interact with on a daily basis remains a mystery. When
we click “Accept” on the terms and conditions page, usually in a
hurry, we are blindly 
“choosing” to opt in to whatever data collection and privacy
infringements the developer has built into the technology. What’s more, most
companies use vague statements on their websites regarding what they are doing
with your data and even threaten to impact your service if you decide not to
share your data.

For example, this snippet comes directly from Nest’s FAQ’s:

Nest FAQs

How important is that app or device?  Is it worth signing over your digital rights?


Join the
SolvetheUnsolvable team this month to explore how private your data really is…

Facial Recognition,
friend or foe? Family Heritage Mapping, a key to the past or losing control of
your future?… Who else is checking in on grandma? The hidden dangers in Smart
Home technology. Are you using your cell phone, or is it using you?

Check back in on
Wednesdays this October to learn more about data privacy…

Up next: Data Privacy Part Four


Processing…
Success! You're on the list.


Chatbots, Influencer Bots, Gaming Bots, Oh my!

As it becomes
increasingly difficult to get the attention of executives and consumers through
email and advertisements, many companies are turning to Artificial
Intelligence. But the real question remains, what are the ethics behind
corporations using bots to promote their goods and services?

Chatbots have shown
real ROI to many businesses and at times have proven more effective than an
under-trained salesforce. An
Oracle survey
has shown that Chatbots could save $174 Billion across
Insurance, Financial Services, Sales, and Customer Service. With vast
abilities, including the ability to chat with actual human dialogue it’s no
wonder companies are so eager and quick to turn to this advancement in AI.
Should a company be ethically responsible to share with consumers that they are
chatting with a bot? Is this on the consumer to “beware” of bots? Do
we as a society care? Should we care?

Influencer Bots, like LilMiquela and Shudu, use CGI and are run by companies specializing in Artificial Intelligence to blend the lines between reality and robot. These two influencer bots have amassed almost 2 million followers and “LilMiquela” is touted as “Musician, change-seeker, and robot with the drip💧💖” in her Instagram Bio. These bots are influencing the purchases we make, the culture we enjoy and now even the music industry. Lil Miquela’s profile is at least honest that she is a bot but Shudu’s bio vaguely states: “The World’s First Digital Supermodel.”


In a world where social media is influencing so many consumer purchasing decisions, especially in younger demographics, is it even ethical to create an influencer bot?


Gaming bots, when
used as intended, can often enhance the gaming experience. For example,
Fortnite has upped their bots’ ability in order to maintain an enjoyable
experience for new comers in their vast online community. However, most gamers
know that bots have often been abused since the idea of using an algorithm to
replace a human online became a reality. Many have used the bot technology to
their advantage and there are companies out there doing something about it.
Niantic, creator of one of the most popular cell phone apps ever, Pokemon Go,
has been extremely strict on bots and gamers trying to cheat the system, going
so far as to take
legal action
.

With bots becoming
one of the most common Artificial Intelligence interacted with daily we need to
start questioning the ethical implications. How are AI empowered bots improving
our daily lives? What are the implications of influencer bots like Lil Miquela
and Shudu on the future of our society? How aware are you that Artificial
Intelligence is impacting your purchasing decisions?


Processing…
Success! You're on the list.

Data Bias on the Daily

Our upcoming September Blog series is Data Bias on the Daily: How Data Bias in Artificial Intelligence is Impacting You. This series will focus on data bias in various forms encountered daily and the goal is to educate consumers on how bias can enter algorithms, knowingly and unknowingly. It is important to define bias:

Bias: The systematic favoritism that is present in the data collection process, resulting in lopsided, misleading results.

How to Identify Statistical Bias

Bias in Artificial Intelligence and algorithms is sometimes intentional, can be caused by a number of things including, but not limited to, sample selection or data collection, and can be avoidable, if that is the desired outcome. (Many corporations want to write their algorithms with bias, in order to increase their bottom line.)

Maybe you’re a woman searching for a STEM job, but the data is biased against your application? Perhaps, your Amazon search is biased towards products and brands that will only increase Amazon’s bottom line? Data bias is even entering our judicial system, is it possible that algorithmic “advancement” is simply confirming long standing racial bias?


Stay tuned to learn more about how Data Bias impacts our daily lives by checking in with us on Mondays in September (9/16, 9/23 and 9/30).



Processing…
Success! You're on the list.