4 PILLARS FOR

CREATING A
WINNING AI
STRATEGY
FOR BUSINESS
Steps for an AI Ready Enterprise

Polestar Solutions & Services India Pvt Ltd

 Introduction

Businesses are rapidly preparing Therefore it will be necessary to

themselves for this new paradigm. constantly revisit the whole program.
But for this to work effectively, they A fine balancing act needs to be done
need get their house in orders. to devise a flexible roadmap.
Lay out crystal-clear specific and Companies also need to figure out
general objectives from the how their competitors are using AI.
program, plan the roadmap, set This will help them better understand
milestones, gauge the hard and soft how AI can actually improve their
costs associated with the program. business as well as discover the right
Identify the stakeholders who will IT partners who can help them in
be impacted and figure out how they their journey.
are going to measure the ROI of the Companies must avoid pitfalls that
whole initiative. may jeopardize the initiative.
Incorporate the expectations from Business leaders must take measures
stakeholders with regard to the so that their employees are educated
whole AI program by taking into on the benefits from AI.
account their feedbacks in a
In order to derive optimal benefits
structured manner.
from the technology, companies need
It might get difficult to set the to audit their whole IT set-up.
project roadmap in stone at the
They need to analyze if they need to
beginning since the program might
upgrade their infrastructure to cope
need to incorporate multiple
up with the increased memory &
feedback as the program progresses.
processing
 Companies need to consider few
important points to ensure the success
with their AI Strategy

Data - AI systems will require a large quantity of

clean, usable and relevant data input - does the
infrastructure have the capability to integrate
more data sources

The Need to Start Small - Analyze a specific use

case & KPIs rather than investing heavily into
multiple areas is going to be a good way to start
with the initiative- It will convince the
stakeholders by giving them quick visibility into
the results and benefits

Cost Analysis - Calculating ROI from the

initiatives, understanding budget constraints and
the total cost of ownership
Nowadays, AI is the talking point across
every industry.

But, should this be the reason why you are

jumping into AI?

The answer should be 'No’.

According to a McKinsey Global

Survey On Artificial Intelligence,
companies cited the most common
constraints to AI as the following –
1) Lack of clear AI strategy
2) Lack of appropriate talent
3) Functional silos that constrain end-
to-end AI solutions
4) Lack of leaders who demonstrate
ownership and commitment to AI.
 Key Pillars for
your AI
Implementation
Plan
 1. Finding a Business
Use Case
Like any other solution, Mostly because AI is often
the first thing for you is to linked with complex outcomes.
identify a 'Need' for your But this is not true, and it
business. It can be related would be a good practice
to a problem in your starting with a smaller
operations or optimizing implementation.
your workforce or finding
patterns in unstructured Like automating a repetitive
data sets or something task that is prone to human
entirely new for your error. Once you show the value
business. that AI solutions can deliver,
you will have buy-in from the
The road to an AI senior executives.
implementation would
seem rocky and many After gaining your
times the whole effort organization's trust, you can
would come into question. chalk out an AI roadmap with
all the stakeholders in your
A defined outcome works company. It should be aligned
as a guiding light at the with achieving the long-term
end of a dark tunnel. The goal of your business.
turnaround time or payoff
time with AI is going to be
longer.
 Case Study

Carlsberg, the fourth-largest brewing company in the world

adopted AI. They always aim to bring in innovation and
disruption in the brewing industry. In AI, they have found the
right technology to keep pushing their boundaries and push
new beer flavors to market faster.

Use Case: AI to transform their brewing

process and predict flavors.
Carlsberg have embedded AI as an integral part of their
brewing research process. Traditionally, identifying flavors
required samples to be created for tasting which required
resources and time. Carlsberg has significantly optimized this
process by installing sensors.

They brew microliters of hundreds of different beers every

day. This small volume is not testable by the human senses.
 “So we realized that if we had sensors that could tell us at the
outset if the yeast is really going to be usable later in large-
scale beer production — and that could recognize the
chemicals and flavor compounds to predict what a beer will
taste like — that would really help our research a lot.” – says
Jochen Förster, the director and professor of yeast and
fermentation for Carlsberg Research Laboratory.

They use Microsoft AI Solutions with machine learning

algorithms, to analyze the signals coming from these sensors
to measure the flavors and aromas created by the yeast and
different varieties of ingredients.

The timeline for this project is three years and is still into
progress, but they have already realized some great results.
The system is already able to differentiate between lagers.
Researchers are trying to make it friendlier for technicians
to use it in their day-to-day work. Once, the system gets
completely optimized, it will help Carlsberg reduce the time
to research flavors by a third. Ultimately it is aligned with
the long-term goal of - more distinct beer to market faster.
 2. Governance

Defining a proper governance A governance system

framework is going to be manages and defines the rules
extremely crucial to oversee a for data access and
meticulous change collaboration, allowing
management programme. organization to maintain
control over their data assets
A program management in a proactive and responsible
office (PMO) comes useful manner.
here that can define the roles
& rights, provide maker- Does your organization have
checker role and strong the capability to assess the
monitoring of the entire risks? Organizations must
process. have a coherent and clear AI
strategy.
It is important to have well-
defined governance Many companies are still not
framework in place for mature in identifying and
regulating the AI-usage. formulating a well-defined
governance mechanism
The accuracy of AI system around this technology.
depends upon the quality of
data input. It is important to Data that is shared must not
have active support from all get misused and the integrity
the stakeholders. of the data is maintained.
 "As organizations move from optimization and
automation to innovation and beyond AI, they
may want to ask different kinds of data-centric
questions such as, ‘What are the boundaries
for using data to perform analytics?’ ‘How are
those boundaries impacted by AI?’ ‘Who are
the stakeholders in these conversations?’,”
- Deborah Adleman, Director, EY LLP

Rapidly evolving regulatory frameworks require

companies to constantly rethink their data protection
policy.

Many times, everyone at the company may be

unaware about the nuances of such regulations and
this may prove dangerous. Hence, it is important to
have effective guardrails and to communicate these
details effectively throughout the organization.

And this is bound to affect the effectiveness of AI

algorithm which demands the-greater-the-better access
to data for making more accurate predictions.
 Case Study

For example, when the civic administration of Espoo,

Finland’s second largest city, wanted to devise an intelligent
social welfare system that would deliver the right benefit to the
right citizen at the right time, they took on the help of
Microsoft to build an AI system that would process over 500
millions of rows of data and not only deliver the civic
authorities a holistic overview of the system, but also help it
optimize the utility, infrastructure, educational, cultural,
health, and social welfare services for its constituents.

But before developing the AI system, Espoo needs to address

significant security, data privacy, and regulatory concerns.
Current GDPR rules require data to be anonymized to protect
citizen privacy, but that would reduce the effectiveness of the
AI algorithms to make predictions.

The city is also working with international organizations and

government and business partners in Finland to establish
globally recognized standards and rules for the ethical and
transparent use of AI in the public sector.

“Our citizens want to know how their information is used, so

we have responded by creating and communicating ethical
rules for AI,” says Päivi Sutinen, Director for City as a
Service Development at the City of Espoo.
3. Subject Matter Experts Need to be
Involved in AI

AI strategy will be successful Usually the data scientists

if it is linked to real business tend to have less experience
use case for the company. For of working on the actual
this, company would require business concerns and
input and active support from priorities for the company.
its business leaders.
It will require a well-defined
Companies also need subject mechanism to capture
matter experts to work feedback from users.
closely for successful Companies will require a
development of AI expertise. program management team
which will prioritize and
When data scientists and incorporate the feedback in a
subject matter experts work structured manner.
in tandem, they are better
able to prioritize the right Many tools today make it
business use cases to solve, easy for non-technical people
understand opportunities and can try their hands at the data
its relevance for the company science wizardry.
and consider all the
stakeholders - take into Gartner coined the term
account the data spread “citizen data scientists” to
across departmental silos, refer to people from non data
and provide context to the background who are
solution. groomed with the data skills
However, this does not mean a machine learning model, they
doing away with a dedicated would be able to optimize the
data science team altogether. bid amount, time and targeting
These experts, with thorough of a particular ad on social
grounding in math and media
statistics are going to be
indispensable. A data scientist would be able
to assess the feasibility of this
Subject matter experts might analysis by studying the
not have the technical and available data, technical
mathematical acumen to expertise available and what
assess the intricacies & they would need in order to
capabilities of AI models. make it possible.

Data scientists will be able toOnce the AI system is up and

outline the bounded realities running, the role of subject
of AI to subject-matter matter experts don’t end.
experts. Subject matter experts can
provide valuable context to
They will be able to set determine if the AI system is
expectations for the features leading to insights that can
of a machine learning model: result in improved processes.
what it can and can’t do for a
business. This intricate Taking feedback from these
balancing act will only be subject matter experts in order
successful if both sides work to understand what their
together. For example, a expectations will lead to
marketer may expect that by adoption
deploying
 Case Study

For manufacturing companies, having continuous machine

health monitoring and pre-empting catastrophic failure of
equipment, are very important use case that can be done with
“intelligent machines” resulting in minimized machine
downtime, maximized productivity.

Pumps, fans, and motors in plant environment often have

problems such as lubrication, cavitation, looseness,
imbalance, as well as bearing issues. In this case,
accelerometers are used to monitor vibration and ultrasonic
energy. These critical measurements can sense problems in
rotating equipment.

For example, when problems occur on equipments, a

maintenance professional will create a work order and then
it will be queued up to be serviced. The question then
becomes whether or not that analysis can be leveraged on a
continual basis.

For example, in manufacturing predictive maintenance, an

equipment expert could identify what parameters are
fundamentally related to observing and making predictive
analysis..
 Case Study

A process expert could relate how different contextual

environments and their combinations of data such as
temperature, pressure, humidity, ambient temperature, etc.
might result in equipment failure.

An analytics expert could determine the best algorithm(s)

to model and predict the trend given the data size,
parameter set, dynamics, etc. The data scientists might
believe that the system is making accurate predictions on
the optimal maintenance schedule on the machines, but
they lack the necessary context about those machines.

A data scientist can’t interpret the numbers to figure out if

in fact one machine should be maintenance more often
than the predictions are calling for.

A domain expert at the manufacturing company who has

experience overseeing the machine maintenance has that
context. This would be valuable to the data scientist in
making the right adjustments in the weight of the features
that they include
 4. ROI – Cost Benefit Analysis
Any strategy is incomplete For example, in case of a
without estimating the pilot of predictive
budget it will require and the maintenance of machine
corresponding returns you setup, you can easily
expect to realize. compare the change in
uptime of the machine post-
In the preceding steps, you AI implementation.
have already discussed the
business use cases of AI, Only if the investment made
gaining SMEs support and against the underlying
the importance of setting up technology underweights the
a robust governance benefit accrued from
framework. reductions in maintenance
cost, you should go ahead
Each of these stages has a with the deployment.
cost attached to them. For
obtaining a clear picture you However, in the case of AI,
need to quantify the benefits calculating ROI is not
in terms of numbers. always straightforward.

Calculating the ROI during There are multiple factors

the pilot is a mandatory step acting at the same time
and helps in getting the making it complex to
green light for the quantify the benefits from
deployment. an AI solution.
In these cases, it becomes with governance framework
difficult for the business need for AI and cost incurred
stakeholders without the in setting up a data platforms
empirical results of on cloud or on-premise,
investment paybacks to air equipment or software costs,
their opinion in front of the energy and data center cost,
top management. training and extra manpower
cost as well.
To calculate the ROI of an
AI implementation, the If even after this exercise the
stakeholders are required to ROI is positive, it is indicative
provide the returns from the of the right path of
entire business unit. deployment.

Since the pilots are done on AI solutions tend to deliver

a limited set of operations some intangible returns which
like if the packaging companies often realize in the
assembly line is automated long term.
but the rest of the processes
remain the same, the The AI champions should work
benefits of AI will be lost. with the finance team to
determine the ROI projections
So, in the initial phases, it is in the long run. There is always
important to set the an inherent risk involved while
company’s expectations for working on emerging
a single process only. technologies. Keeping this in
mind, it is always advisable to
However, in the long run, it factor in this risk and adding a
becomes important to factor cushion to the cost projections
in the cost associated while calculating ROI.
 Case Study

SR-Bank was looking to ramp up their customer service

need owing to growing customer base. They wanted to
reduce the cost associated with handling customer queries
and impart better experience.

Use Case: A secure Conversational AI Solution backed by

NLU & ML – Banki

SR-Bank wanted to achieve better control and provide a

superior experience to their customer in an efficient way.
They set up systems like Natural Language Understanding
(NLU) and Machine Learning (ML) to set up virtual agents
for customer queries redressal. The virtual agents were
able to resolve most of the queries, but advancements of
conversational AI presented them with some very exciting
opportunities.

Banki – an AI-enabled conversational solution was

developed. The results with Banki are so ground-breaking
that SR-bank has prioritized a ‘Chat First” strategy. Out of
approximately 25,000 monthly conversations, Banki is able
to recognize around 2,000 intents along with response time
and level accuracy that isn’t possible from human
personnel.
 Case Study

Also, the volume of customer queries handled by SR-Banks has

dramatically increased by nearly 150%. As per their
calculations, its capacity is close to 20 full-time employees. It
frees up human resources from the repetitive tasks allowing
them to focus on more creative tasks.

Banki has really delivered some great ROI in error handling

encountered while authorizing their e-banking solution. Users
typically get an error during a network outage; in such
incidents, the error code is redirected to Banki. It then pops up
and guides the customers by telling them to either try again in a
couple of minutes or contact customer service.

In March of 2018, Norway’s primary electronic identification

system, BankID, suffered some technical glitches disabling
customers from login into their accounts. During the outage,
Banki successfully fielded more than 4 000 conversations in a
single day. It couldn’t have been possible without the help of
Banki.
 Wrapping Up

This has been a decade where; This part of the series presents you
businesses have realised the potential with typical challenges companies
that AI holds. As we are entering a face while starting with their AI
new decade, technology gurus are strategy.
predicting it be a decade where we
will see AI coming of age and getting So we have broken it down into four
adopted in day-to-day processes. key pillars that could help you to
tackle them and garner the support of
In light of these developments, this business users. These are:
series aims to ready enterprises to
ride this technology-led wave of ❑ Finding a Business Use Case
growth. ❑ Governance
❑ Subject Matter Expertise
In part -1 of this series, we walked ❑ ROI – Cost Benefit Analysis
you through the basics of AI. Then,
we dwell into the key aspects of We have also included some case
building an AI strategy from scratch. studies to guide you along this
We break it down for you into: complex but rewarding journey.

❑ Organizational You can also take some outside help

❑ Data Management from companies who have
❑ Infrastructure successfully done this for other
❑ Analytics organisations.

to measure your enterprise readiness At Polestar, we have helped

and formulate a comprehensive AI companies in their technology-led
strategy. transformation of business operations
and building a culture of innovation.

 Link to Part 1: AI Strategy

for Business
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