ACHARYA INSTITUTE OF TECHNOLOGY

Affiliated to Visvesvaraya Technological University, Belagavi, Govt. of Karnataka.

Approved by AICTE, New Delhi and Accredited by NBA (AE, BT, CSE, ECE, ME and MTE)
Department of Artificial Intelligence & Machine Learning
and
Computer Science & Engineering (Data Science)

MODULE 1
Chapter 2: An Overview of Business Intelligence, Analytics, Data
Science, and AI

Artificial Intelligence - Concepts, Drivers, Major Technologies, and Business

Applications

Major AI Technologies and Some Derivatives

Artificial Intelligence comprises several core technologies and their derivatives, which form the
foundation of modern AI applications.

1. Machine Learning (ML)

 Enables computers to learn from data without explicit programming.

 Includes supervised, unsupervised, and reinforcement learning.

 Example: Predicting loan defaults using past customer data.

2. Deep Learning (DL)

 Subset of ML based on artificial neural networks.

 Excels at image recognition, speech processing, and natural language tasks.

 Example: Face recognition systems like Apple’s Face ID.

3. Natural Language Processing (NLP)

 Focuses on enabling machines to understand and generate human language.

 Applications: chatbots, voice assistants, text summarization, sentiment analysis.

 Example: Siri, Alexa, and Google Assistant.

4. Computer Vision

Acharya Dr. Sarvepalli Radhakrishnan Road, Soladevanahalli, ACHIT Nagar P. O., Bangalore-560 107
[Link] Ph.: 080 22555555
 ACHARYA INSTITUTE OF TECHNOLOGY
Affiliated to Visvesvaraya Technological University, Belagavi, Govt. of Karnataka.
Approved by AICTE, New Delhi and Accredited by NBA (AE, BT, CSE, ECE, ME and MTE)
Department of Artificial Intelligence & Machine Learning
and
Computer Science & Engineering (Data Science)

 AI systems that can analyze and interpret images/videos.

 Used in autonomous vehicles, healthcare imaging, and security.

 Example: Detecting tumors in MRI scans.

5. Robotics and Intelligent Agents

 Robotics integrates AI for autonomous decision making and control.

 Intelligent agents can operate in dynamic environments (e.g., warehouse robots).

6. Expert Systems

 Knowledge-based systems that use rules and reasoning to make decisions.

 Example: Medical diagnosis support systems.

Derivatives

 Speech recognition & synthesis (voice-based control).

 Recommendation engines (Netflix, Amazon).

 Edge AI (running AI models on devices rather than cloud).

AI Support for Decision Making

AI supports decisions at all organizational levels — operational, tactical, and strategic.

Key Contributions

1. Automation of Routine Decisions

o AI can replace repetitive, rule-based tasks.

o Example: Automated credit scoring in banks.

Acharya Dr. Sarvepalli Radhakrishnan Road, Soladevanahalli, ACHIT Nagar P. O., Bangalore-560 107
[Link] Ph.: 080 22555555
 ACHARYA INSTITUTE OF TECHNOLOGY
Affiliated to Visvesvaraya Technological University, Belagavi, Govt. of Karnataka.
Approved by AICTE, New Delhi and Accredited by NBA (AE, BT, CSE, ECE, ME and MTE)
Department of Artificial Intelligence & Machine Learning
and
Computer Science & Engineering (Data Science)

2. Enhanced Decision Quality

o AI provides data-driven insights, reducing human bias.

o Example: AI in medical diagnosis improving accuracy.

3. Speed and Efficiency

o Real-time processing enables faster responses.

o Example: Fraud detection during online transactions.

4. Handling Complexity

o AI can analyze large-scale, multidimensional data beyond human capacity.

Technology Insight 2.2: Schrage’s Models for Using AI to Make Decisions

Michael Schrage proposed models of AI-supported decision making:

1. AI as a Decision Support Tool

o AI provides recommendations, but human makes the final decision.

o Example: Doctor using AI diagnostic suggestions.

2. AI as a Decision Partner

o Human and AI collaborate, sharing responsibility.

o Example: Stock traders using AI predictions with human judgment.

3. AI as a Decision Maker

o AI makes independent decisions in defined contexts.

o Example: Autonomous vehicles navigating traffic.

Acharya Dr. Sarvepalli Radhakrishnan Road, Soladevanahalli, ACHIT Nagar P. O., Bangalore-560 107
[Link] Ph.: 080 22555555
 ACHARYA INSTITUTE OF TECHNOLOGY
Affiliated to Visvesvaraya Technological University, Belagavi, Govt. of Karnataka.
Approved by AICTE, New Delhi and Accredited by NBA (AE, BT, CSE, ECE, ME and MTE)
Department of Artificial Intelligence & Machine Learning
and
Computer Science & Engineering (Data Science)

Implication: Organizations must carefully choose which model suits their risk, ethics,
and accountability framework.

AI Applications in Various Business Functions

AI is applied across multiple business domains, enhancing efficiency, profitability, and

customer experience.

Analytics in Action 2.1: How EY, Deloitte, and PwC Are Using AI

 EY (Ernst & Young):

o Uses AI for auditing and fraud detection.

o AI reviews contracts and identifies anomalies.

 Deloitte:

o Uses cognitive AI systems for tax compliance and regulatory checks.

 PwC (PricewaterhouseCoopers):

o Uses AI for risk assessment, financial analysis, and client advisory.

Outcome: Big Four firms demonstrate AI’s role in accounting, auditing, and
compliance.

AI Applications in Financial Services

1. Fraud Detection

o AI detects unusual transaction patterns.

Acharya Dr. Sarvepalli Radhakrishnan Road, Soladevanahalli, ACHIT Nagar P. O., Bangalore-560 107
[Link] Ph.: 080 22555555
 ACHARYA INSTITUTE OF TECHNOLOGY
Affiliated to Visvesvaraya Technological University, Belagavi, Govt. of Karnataka.
Approved by AICTE, New Delhi and Accredited by NBA (AE, BT, CSE, ECE, ME and MTE)
Department of Artificial Intelligence & Machine Learning
and
Computer Science & Engineering (Data Science)

o Example: Banks flagging suspicious credit card use.

2. Credit Risk Assessment

o AI models evaluate borrower profiles and predict default risk.

3. Algorithmic Trading

o High-frequency trading with AI predicting stock trends.

4. Customer Service

o AI chatbots provide 24/7 banking support.

AI in Marketing, Advertising, and CRM

1. Personalized Marketing

o AI recommends products based on customer data.

o Example: Amazon’s product recommendations.

2. Targeted Advertising

o AI analyzes user behavior to serve customized ads.

o Example: Google Ads and Facebook Ads.

3. Customer Relationship Management (CRM)

o AI integrates with CRM systems (like Salesforce) to analyze customer sentiment,

predict churn, and suggest actions.

4. Brand Engagement

o Chatbots, sentiment analysis, and social media AI monitoring customer opinions.

Acharya Dr. Sarvepalli Radhakrishnan Road, Soladevanahalli, ACHIT Nagar P. O., Bangalore-560 107
[Link] Ph.: 080 22555555
 ACHARYA INSTITUTE OF TECHNOLOGY
Affiliated to Visvesvaraya Technological University, Belagavi, Govt. of Karnataka.
Approved by AICTE, New Delhi and Accredited by NBA (AE, BT, CSE, ECE, ME and MTE)
Department of Artificial Intelligence & Machine Learning
and
Computer Science & Engineering (Data Science)

Conversational AI — Chatbots

What Is a Chatbot

 A chatbot is a computer program that simulates conversation with human users,

especially over the Internet.

 It uses Natural Language Processing (NLP) and AI to understand queries and provide
responses.

 Chatbots can be rule-based (scripted answers) or AI-powered (learn and adapt).

 Examples: Amazon Alexa, Google Assistant, Apple Siri, customer support chatbots on
websites.

Chatbot Evolution

1. Early Chatbots

o 1960s: ELIZA (one of the first chatbots, mimicked a psychotherapist).

o 1970s: PARRY (simulated a patient with schizophrenia).

2. 2000s

o Rule-based chatbots for customer service (scripted, keyword-driven).

3. Modern AI-Powered Chatbots

o Use NLP, machine learning, and cloud AI platforms.

o Capable of context-aware, multi-turn conversations.

Acharya Dr. Sarvepalli Radhakrishnan Road, Soladevanahalli, ACHIT Nagar P. O., Bangalore-560 107
[Link] Ph.: 080 22555555
 ACHARYA INSTITUTE OF TECHNOLOGY
Affiliated to Visvesvaraya Technological University, Belagavi, Govt. of Karnataka.
Approved by AICTE, New Delhi and Accredited by NBA (AE, BT, CSE, ECE, ME and MTE)
Department of Artificial Intelligence & Machine Learning
and
Computer Science & Engineering (Data Science)

o Integrated into messaging apps, mobile apps, and enterprise systems.

Components of Chatbots and the Process of Their Use

1. User Interface – Web, mobile app, or messaging platform (WhatsApp, Slack).

2. Input Processing (NLP) – Converts user’s speech/text into structured data.

3. Dialog Manager – Controls conversation flow and maintains context.

4. Knowledge Base/Backend Integration – Provides responses using databases, APIs, or

AI models.

5. Response Generation – Text, voice, or action (booking a ticket, processing payment).

Process:

 User sends a query → NLP processes input → Dialog Manager interprets intent →
System fetches information → Response delivered.

Drivers and Benefits

Drivers (Why Businesses Adopt Chatbots)

 24/7 availability

 Instant response to customer queries

 Cost reduction in customer service

 Ability to handle high volumes simultaneously

Benefits

 Improved Customer Engagement – Faster, personalized responses.

Acharya Dr. Sarvepalli Radhakrishnan Road, Soladevanahalli, ACHIT Nagar P. O., Bangalore-560 107
[Link] Ph.: 080 22555555
 ACHARYA INSTITUTE OF TECHNOLOGY
Affiliated to Visvesvaraya Technological University, Belagavi, Govt. of Karnataka.
Approved by AICTE, New Delhi and Accredited by NBA (AE, BT, CSE, ECE, ME and MTE)
Department of Artificial Intelligence & Machine Learning
and
Computer Science & Engineering (Data Science)

 Operational Efficiency – Automates repetitive tasks (FAQs, order tracking).

 Scalability – Serves millions of users without extra human staff.

 Data Insights – Collects customer interaction data for analytics.

 Revenue Growth – Increases conversions via personalized recommendations.

Representative Chatbots from Around the World

 Amazon Alexa – Smart home and personal assistant.

 Google Assistant – Voice-controlled AI assistant.

 Apple Siri – Mobile and smart device assistant.

 Cortana (Microsoft) – Enterprise productivity assistant.

 Mitsuku (Kuki) – Conversational chatbot that won the Loebner Prize Turing Test
multiple times.

 Banking Bots – HDFC EVA, Bank of America’s Erica.

 E-commerce Bots – Sephora Virtual Assistant, Domino’s Pizza Bot.

Acharya Dr. Sarvepalli Radhakrishnan Road, Soladevanahalli, ACHIT Nagar P. O., Bangalore-560 107
[Link] Ph.: 080 22555555