1. Chapter 12: Intelligent Systems in Business
Introduction to Information Technology 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
Chapter 12:
Intelligent Systems in Business
Prepared by:
Roberta M. Roth, Ph.D.
University of Northern Iowa

2. Chapter Preview In this chapter, we will study:
What is meant by artificial intelligence
How expert systems are developed and how they perform
How AI has been applied to other arenas, such as natural language processing and neural computing
The concept and usefulness of intelligent agents
Ethical and legal issues posed by AI

3. ‘Intelligent’ Systems?
Conventional computer systems do not possess ‘intelligence.’ They simply follow step-by-step instructions to complete a task
If a computer system had ‘intelligence,’ it would…
Deal successfully with complex situations
Learn from experience
Adapt to new situations quickly
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

4. Why do we want ‘Intelligent’ Systems?
To capture and represent human knowledge permanently
To perform tasks requiring intelligence repetitively, consistently, and capably
To document the performance of a task
To conveniently disseminate knowledge and expertise to others
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

5. Artificial Intelligence
Branch of computer science that
Studies human intelligent behavior
Attempts to replicate that human intelligent behavior in a computer system
Employs symbolic processing of knowledge and heuristics
Does not really enable computers to ‘think’
Does enable creation of systems with some human-like behaviors
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

6. Applications of Artificial Intelligence
Expert Systems
Natural language technology
Speech understanding
Robotics
Computer vision
Intelligent computer-assisted instruction
Machine learning
Handwriting recognition
Intelligent agents
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

7. What is an Expert System?
Computer system that solves a problem as successfully as a human expert
Incorporates human expertise
Acquires facts about the problem
Applies its stored knowledge and expertise to the problem facts to derive a solution
Makes recommendations
Can explain its reasoning and logic
Successful commercial application of AI
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

8. Key Expert System Terms
Knowledge acquisition – the process of obtaining knowledge and expertise from human experts
Knowledge representation – the method used to represent human knowledge and expertise in the computer system
Knowledge inferencing – the process of applying stored expertise to the facts about the problem to draw conclusions
Knowledge transfer and use – the communication of the problem solution and its justification to the system user
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

9. More Expert System Terms
Knowledge base – stored facts and methods of how to solve a problem
Heuristic – rule of thumb that can be applied in a problem solution
Inference engine – processing logic stored in the system that correctly applies the stored knowledge to the problem to develop a solution
Domain expert – one or more humans who have achieved a high level of expertise in solving a problem
Knowledge engineer – person who develops expert systems
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

10. How is an Expert System Created?
Knowledge engineer works with domain expert to extract domain knowledge
Knowledge engineer encodes domain knowledge in knowledge base using appropriate knowledge representation
Knowledge engineer tests system on sample problems and refines system knowledge with help from domain engineer
Refinement continues until system is solving problems with human expert capability
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

11. How Does an Expert System Perform?
System asks user a series of questions to gather facts about the problem
System uses inference engine to form conclusions from the facts, including a measure of certainty about the conclusions
System displays its recommendation or solution to the problem
If asked, the system can display its reasoning and logic as to how it arrived at the conclusion
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

12. Expert System Structure

13. More on Expert Systems Strengths Limitations
Rapid, consistent problem solutions
Ability to justify and explain reasoning
Easy to replicate and distribute to non-expert users
Limitations
Can only solve problems in a narrow domain
Can only be applied to certain problem types
Cannot learn from its experience
Hard to acquire knowledge from human expert

14. Other Intelligent Systems
Natural Language Processing
The ability to communicate with a computer in your natural language
Voice (speech) recognition and speech understanding – system recognizes spoken words and understands their meaning
Voice synthesis – computer produces natural language voice output that sounds ‘human’
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

15. Other Intelligent Systems
Neural Computing
A computer model that uses architecture that mimics certain brain functions
Performs pattern recognition well
Can analyse large data sets and discover patterns where rules were previously unknown
Can ‘learn’ by analysing new cases and updating itself
Many potential business applications
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

16. Other Intelligent Systems
Case-Based Reasoning
Uses solutions from similar problems and adapts them to new problems
Useful in solving very complex cases
Fuzzy Logic
Enables systems to effectively deal with uncertainty
Often use in combination with other technologies to improve productivity
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

17. Intelligent Agents
Software agent that autonomously performs tasks on behalf of a user with certain goals or objectives
Can tirelessly perform repetitive tasks over a network
Includes knowledge base and ability to learn
Can be static (on the client only) or mobile (move throughout a network)
Often used to facilitate search and retrieval on the Internet and to assist in e-commerce tasks
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

18. Virtual Reality
Simulation of a physical environment in a highly realistic way
Useful for communication and learning
Many potential business applications, especially marketing
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

19. Intelligent Systems Concerns
Potential to use the power of intelligent systems in unethical ways
Who will be accountable for decisions made by intelligent systems?
Who ‘owns’ knowledge and expertise? Can an expert be ‘forced’ to reveal his/her expertise?
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

20. Chapter Summary
Artificial intelligence has produced a variety of approaches to simulating some aspect of human behavior
Expert systems have been most successful in business applications
Natural language processing capability is improving
Intelligent agents are very powerful tools in many of today’s systems
AI brings many ethical and legal concerns
Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of and fax messages through a single communication system.

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