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Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
CHAPTER 11
INTELLIGENT SYSTEMS
IN BUSINESS
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
2
Learning Objectives
 Describe artificial intelligence and compare it to
conventional computing
 Identify the characteristics, structure, benefits,and
limitations of expert systems
 Describe the major characteristics of natural
language processing and voice technologies
 Describe neural computing and its capabilities
 Define intelligent agents and their role in IT
 Describe virtual reality
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Chapter Overview
Artificial Intelligence
and Intelligent Systems
•Artificial Intelligence
and Intelligent Behavior
•Comparing Artificial
and Natural
•Conventional versus
Al Computing
•Commercial Artificial
Intelligence Systems
Intelligent Agents
•Characteristics of
Intelligent Agents
•Applications of
Intelligent Agents
Other
Intelligence Systems
Expert Systems
•Concepts of Expert Systems •Natural Language
•Benefits and Limitations of Processing and
Expert Systems
Voice Technology
•Processes and Components •Neural Computing
of Expert Systems
Card-Based
•Illustrative Applications
Reasoning
•Expert Systems and the
•Fuzzy Logic
Internet/intranets
Virtual Reality: An
Emerging Technology
•What is Virtual Reality?
•Applications of Virtual
Reality?
Ethical and Global Issues
of Intelligent Systems
•Ethical and Social Issues
•Legal Issues
•Global Aspects of
Intelligent Systems
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Case: Analog Devices Uses
Intelligent Systems to Support Sales
 The Problem
 faced a problem of matching
products to customers efficiently in
the very competitive ICs industry
 The Solution
 using an intelligent technology call case-based reasoning
to improve the customer-company communication
 The Results
 quality of the service makes the difference in
this competitive market
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Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
Case (continued…)
What have we learned from this case??
 how an intelligent system solved a
difficult business problem by improving
the communication and collaboration
between the company and its customers
 the intelligent system solution was integrated with
other information technologies (CD-ROM, Internet,
extranet, search engine) as well as with a DSS
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Intelligent Systems and
Artificial Intelligence
Artificial Intelligence (AI)
 the branch of computer science that deals with ways of
representing knowledge, using symbols rather than
numbers, and heuristics, or rules of thumb, rather than
algorithms for processing information
 involves studying the thought processes of humans
 deals with representing those processes via machines
 objectives:
 to make machines smarter
 to understand what intelligence is
 to make machines more useful
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Comparing Artificial and
Natural Intelligence
AI’s commercial advantages
over natural intelligence
• more permanent
• less expensive
• consistent and thorough
• can be documented
• ease of duplication and
dissemination
Natural intelligence’s
advantages over AI
• creative
• enables people to benefit
form and directly use
sensory experience
• enables people to recognize
relationships
• enables people to make use
of a wide context of
experiences
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Conventional vs. AI Computing
Dimension
Processing
Nature of
input
Search
approach
Explanation
Focus
Maintenance
and update
Reasoning
capability
Artificial Intelligence
Include symbolic
conceptualization
Can be incomplete
Conventional Programming
Primarily algorithmic
Frequently uses
rules and heuristics
Provided
Knowledge
Relatively easy changes
can be made in selfcontained modules
Yes
Frequently based on
algorithms
Usually not provided
Data, Information
Usually difficult
Must be complete
No
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Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
Commercial AI Systems
Expert systems (ESs)
Natural language technology
Speech (voice) understanding
Robotics and sensory systems
Computer vision and scene recognition
Intelligent computer-aided instruction (ICAI)
Machine learning
Handwriting recognizers
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Expert Systems
Expertise is
transferred
from an expert
to a computer
and it is stored
there
Users can
call on the
computer for
specific
advice as
needed
The computer program
advises the nonexperts and
explains, if necessary, the
logic behind the advice
The
computer
can make
inferences
and arrive at
a conclusion
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Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
Benefits of Expert Systems
 Increased output and productivity
 Increased quality and reliability
 Capture of scarce expertise
 Ability to operate in hazardous environment
 Improved customer service
 Human-like intelligence
 Fault tolerance
 Complex problem solving and decision making
 Training capabilities
 Reduction of cycle time and downtime
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Limitations of Expert Systems










Limited expertise
No single correct solution
Natural cognitive limits
Narrowly defined subject areas
Occasional incorrect recommendations
Limited vocabulary or jargon
Cost
Lack of trust by end users
Biases
Liability issues
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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The Process of ES
Consultation Environment
User
Facts about the
specific incident
Development Environment
Knowledge bases
Facts:What is know about the
domain area
Rules: Logical reference
User
interface
Knowledge
engineer
Explanation
facility
Recommended
action
Knowledge
acquisition
Inference engine
draws conclusions
Blackboard
(workplace)
Expert and
documented
knowledge
Knowledge
refinement
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Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
The Components of ES
The knowledge base contains knowledge necessary
for understanding, formulating, and solving problems
The Blackboard is an area of working memory set
aside for the description of a current problem
The inference engine is essentially a computer
program that provides a methodology for reasoning and
formulating conclusions
The user interface in ES allows for user-computer
dialog usually presented as questions and answers, and
sometime supplemented by graphics
The explanation subsystem can trace responsibility
for conclusions to their source
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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ESs and the Internet/Intranet
Expert
Systems
provide knowledge
and advice to large
numbers of user
Support
Support
Net
provide the
opportunity to
disseminate expertise
and knowledge to
mass audiences
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Other Intelligent Systems
Natural Language Processing (NLP)
 Communicating with a computer in English or
whatever language you may speak, instead of
commands
Voice Technology
 Voice (speech) recognition and understanding
 allows users to communicate with a computer by
speaking to it
 Voice synthesis
 the technology by which computer ‘speak’
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Other Intelligent Systems
(continued …)
 Neural Computing or
Artificial Neural Network (ANN)
 emulates a biological neural network
 receives information from other neurons or
from external sources, transform the
information, and pass it on to other neurons or
as external outputs
 value : useful for pattern recognition, learning,
and the interpretation of incomplete inputs
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Other Intelligent Systems
(continued …)
Case-Based Reasoning (CBR)
 basic idea: adapt solutions that were used to solve
old problems and use them to solve new problems
 an extremely effective approach in complex cases
 used by itself or it can be combined with other
reasoning paradigms
 used to facilitate and expedite knowledge acquisition
and information system development, enhance
learning and training, and generate explanations to
users of systems
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Other Intelligent Systems
(continued …)
 Fuzzy Logic
 deals with uncertainties by simulating the
process of human reasoning, allowing the
computer to behave less precisely and logically
than conventional computers do
 rationale : not always a matter of true or false or
black and white
 creative decision-making processes are often
unstructured, playful, contentious, and rambling
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Intelligent Agents (IA)
Characteristics of Intelligent Agents





capability to work on their own (autonomy)
exhibition of goal-oriented behavior
transportable over networks (mobility)
dedication to a single repetitive task
ability to interact with humans, systems, and
other agents
 inclusion of knowledge base
 ability to learn
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Applications of IA
Application
User interface
agents
Operating
systems agents
Spreadsheet
agents
Workflow and
task management
agents
Software
development
agents
Description
Monitor usage and suggest
improvement.
Add accounts, do group management,
manage access, add/remove programs
and devices, monitor licenses.
Offer suggestions for improvements.
Can tutor novice users.
Administer workflow management monitor activities, alert, and remind.
Assist in routine activities such as
data filtering.
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Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
Virtual Reality (VR) :
Emerging Technology
 What Is Virtual Reality (VR)?
 most common definitions : interactive, computergenerated, three-dimensional graphics, delivered
to the user through a head-mounted display
 technical definitions : environment and/or
technology that provides artificially generated
sensory cues sufficient to engender in the user
some willing suspension of disbelief
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Applications of VR
Application
Manufacturing
Transportation
Finance
Architecture
Military
Medicine
Marketing
Description
• Worker training
• Design, testing, and virtual prototyping
of products and processes
• Engineering and ergonomic analysis
• Simulation of assemble, production, and
maintenance
• Virtual aircraft mock-ups
• New-car design and testing of cars in virtual
accidents
• View stock prices and characteristics
• Display of building and other structures
• Training and battlefield simulation
• Training of surgeons and planning surgeries
• Planning physical therapy
• Store and product display
• Electronic shopping
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Ethical and Global Issues
Ethical and Society Issues Related to
Intelligent Systems
 The Laws of Robotics
 Hal and Dave
 computer may refuse human orders
 Virtual Reality
 peoples’ behavior in a world where the distinction
between the real and the virtual is unclear
 Privacy
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Ethical and Global Issues
(continued …)
Legal and ethical Issues
 what is the value of an expert opinion when the
expertise is encoded in a computer?
 who owns the knowledge in a knowledge base?
 should royalties be paid to experts who provide
the knowledge to ES, and if so how much?
 can management force experts to contribute
their expertise?
 who is an expert? what if several experts
disagree?
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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Ethical and Global Issues
(continued …)
Global Aspects of Intelligent Systems
 Foreign trade
 Advising companies on how to exploit opportunities related
to the NAFTA agreement
 Foreign exchange transactions
 FS System advises on trading currencies of various nations
 Employee training
 Intelligent systems cut the time to train employees online
before they go to a foreign country
 Weather forecasting
 Climatic expert systems provide long-range climate forecasts
 Automatic language translations
 Intelligent systems translate languages, including voice in
telephone conversations
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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What’s in IT for Me?
For Accounting
 Intelligent systems are used extensively in
auditing to uncover irregularities, uncover
and prevent fraud
For Finance
 Intelligent systems can facilitate the use of
spreadsheets and other computerized systems
used in finance; and can help in reducing
fraud in credit cards, stocks, and other
financial markets
Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
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What’s in IT for Me? (continued …)
 For Marketing
 Intelligent systems are partially useful in mining
customer databases and predicting customer
behavior
For Production/Operations Management
 Expert systems were developed for tasks ranging
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Introduction to Information Technology
Turban, Rainer and Potter
Chapter 11 Intelligent Systems in Business
What’s in IT for Me? (continued …)
 For Human Resource Management
 Intelligent agents can find resumes of
applicants posted on the Web and sort them to
match needed skill and can facilitate training
and to manage fringe benefits programs
 Expert systems are used in evaluating
candidates
 Neural computing is used to predict employee
performance on the job and to pre
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