By Steve Cox, Group Vice President, ERP and EPM Product Marketing, Oracle
Everybody’s talking about artificial intelligence lately. It’s one of the hottest buzzwords in the technology hype cycle. But few SMB leaders—particularly in finance—understand what AI really is. And even fewer understand how to use it within their business.
Allow me to demystify it for you.
There are various categories of AI; most people, when they think of it, tend to imagine the robots of Star Wars or the android-like “replicants” of Blade Runner. (And yes, I’m dating myself by citing these films.) Scientists and engineers are working on such technology, but it’s still some years in the future.
Of more immediate concern is something done by computers, called “machine learning.” This is here now, and it has enormous implications for the way companies do business—even (or perhaps, especially) small to medium business.
McKinsey defines machine learning as “based on algorithms that can learn from data without relying on rules-based programming.” In the past, business analysts would develop business rules, so that if an algorithm encountered a certain condition, it would automatically trigger a specific response.
My colleague Rich Clayton gives a simple example: your credit card company might detect a transaction under the amount of $5. Then, within 10 minutes, it detects another transaction for $200. The company’s systems might be programmed to identify that pattern as fraud. That is a business rule that a person programmed into the application.
Machine learning takes this a step further, using existing data to compare the pattern to past instances of fraud. While running these comparisons, the algorithms might discover that fraudulent transactions are more likely to (a) be processed in separate locations, and (b) take place in stores where the credit card holder has never shopped before.
Once they uncover this new information, the algorithms add these criteria to the definition of “fraud,” learning from the data just uncovered. They continue to do this each time they encounter a potential instance of fraud, uncovering new trends and getting smarter (and more accurate) with each iteration.
In order to learn this new information, machines must have existing data to learn from. Unfortunately, very few of today’s finance teams make the best use of the data they have—especially in SMBs, where resources are much more limited than among large enterprises.
But I have good news for you. You don’t need to hire computer scientists to build machine learning technologies into your finance applications. You don’t even need to mine your own data. You can lease these services from established providers in the cloud—at a cost that even SMBs can afford.
As a company that started in the database business 40 years ago, Oracle knows data. We offer anonymized data stores to our clients in the form of Data as a Service. When combined with your own data, we provide AI-enabled insights to finance and other lines of business across your SMB.
Here’s how it works.
Drawing on Oracle DaaS, Oracle is embedding adaptive intelligence into its portfolio of cloud applications (finance, supply chain, HR and customer experience). These Adaptive Intelligent Applications learn from our data and yours—providing recommendations for the best payments terms to your suppliers, the best freight value for shipping, the best candidates to fill job openings, or the most relevant offers to your customers.
The algorithms learn continuously as you use them, providing up-to-date recommendations and offering users the best outcomes.
For finance professionals in particular, Oracle Adaptive Intelligent Applications will amplify Oracle ERP Cloud to help them negotiate the best supplier terms and optimize cash flow—especially during high-volume periods such as end-of-quarter. These recommendations are presented in context while your employees use Oracle ERP Cloud. Imagine the business impact of always enjoying the best available discounts!
The benefit of this approach to machine learning is that you don’t need to develop the algorithms yourself. They are already available within Oracle Cloud Applications. All you need to do is turn them on.
This approach is the future of AI, according to Dave Schubmehl, research director of cognitive systems and content analytics for IDC.
“Within the foreseeable future, every enterprise application will be a smart application that intuitively learns from interactions with an enterprise’s data,” said Schubmehl. “Oracle’s new Adaptive Intelligent solutions take this value proposition a step further. They are set apart from others by allowing the intelligent applications to learn from billions of anonymized consumer and business profiles available from Oracle.”