Assessment of the Commercial Applicability of Artificial Intelligence in Electronic Businesses

Diplomarbeit von Thomas Kramer

Abstract:

Artificial intelligence has already been applied to many areas since its official birth in 1956, but most of the applications ended up in great disappointments as the benefits they reaped were very low. Due to this reason the vast interest in applying this relatively young technology to business calmed down in the late seventies when scientists recognized that the current intelligent systems were not yet plug-and-play solutions, hence mature enough to fully meet the business needs and requirements at that time. However, the limited commercial applicability of artificial intelligence in the past has to be rethought today as with the significant progress in artificial intelligence research and the growth of electronic commerce conducted over the World Wide Web new opportunities for business applications of artificial intelligence have emerged consequently.

Nowadays horizontal and vertical electronic commerce is significantly driven by intelligent applications. Their employment in electronic businesses „may well generate huge returns on investments, providing a technology-based response to increasing competition, the volatility of business models, and the pace of technology change”. Despite the wide assumption that artificial intelligence will have a major impact on Internet-related businesses today and especially in the next years to come, it is uncertain to what extent it performs and will perform that way. The purpose of this thesis is to analyse, assess and evaluate the potential of commercial applications of artificial intelligence in electronic businesses. Therefore the main research question of this paper is whether artificial intelligence is reasonably applicable in Internet-related businesses, first in terms of effectiveness and second in terms of efficiency. In the assessment the application of artificial intelligence in electronic businesses is represented by the employment of intelligent agents.

In harmony with the major research question emphasized above, the paper provides a thorough discussion about the economic impact of the most common and relevant application types of intelligent agents on electronic commerce environments. In addition the driving underlying technologies of intelligent agents are analysed with respect to artificial intelligence techniques and methods, and current standardisation efforts. The assessment itself constitutes of theoretical and practical instruments that measure the commercial applicability of artificial intelligence in electronic businesses. First, the effectiveness of employing intelligent agents will be measured with a cost-benefit analysis to prove whether it is the right thing to do for an electronic business. Second, the efficiency of such an application will be assessed with a detailed SWOT-Analysis in order to determine whether employed agents do their job right. Finally, the results from a range of expert interviews with dominating developers in the field of intelligent systems technology will be integrated into the assessment. Expert interviews as a research method seem to be appropriate for this assessment as they investigate the phenomenon within its real-life context. Furthermore they extend experience or add strength to what is already known through previous research.

In a final summary and evaluation the answer to the given research question is provided. By the end of the thesis, the reader should have gained a strong comprehension of the linkages between electronic commerce and intelligent agents and should understand the resulting implications of the technology’s application on electronic businesses.

Table of Contents:

1.	Introduction	1
1.1	Problem Statement	1
1.2	Scope of the thesis	1
1.3	Course of the investigation	2
2.	Intelligent Electronic Business	2
2.1	The need for intelligent system technologies	3
2.2	Mediators in traditional and electronic markets	4
2.3	Consumer and buyer behaviour in electronic commerce	6
3.	Artificial Intelligence in Electronic Commerce	7
3.1	Artificial Intelligence	8
3.1.1	Theories of human intelligence	8
3.1.2	The "Artificial" Intelligence	9
3.1.3	Intelligence in computers	10
3.2	Intelligent Agents: Embedding Artificial Intelligence in e-businesses	11
3.2.1	Software Agents	12
3.2.2	The agents' intelligence	13
3.2.3	A taxonomy for intelligent agents	14
3.2.4	Agent interactivity according to the Consumer Buyer Behaviour stages	15
3.2.5	Mediating agents in the electronic business scenarios	16
4.	Technology and Business Application Analysis	19
4.1	Business Application Areas in Electronic Commerce	19
4.1.1	Individualization through Recommendation	20
4.1.2	Intelligent Partnering	22
4.1.3	Online Bargaining	23
4.1.4	Ontology-based product content management	25
4.1.5	Intelligent Customer Relationship Management	27
4.2	Current state of Intelligent Agent Technology	29
4.2.1	The technologies employed by Intelligent Agents	29
4.2.2	Agent communication and protocol standards	31
5.	Assessing the commercial applicability of Intelligent Agents	32
5.1	Cost-Benefit-Analysis for Intelligent Agents	32
5.1.1	Cost analysis: A quantitative and qualitative approach	32
5.1.2	Benefit analysis: The Return on Intelligence	34
5.1.3	A discussion of social, ethical and legal issues and dilemmas	35
5.2	SWOT-Analysis for Intelligent Agents in electronic businesses	38
5.2.1	Strengths	38
5.2.2	Weaknesses	39
5.2.3	Opportunities	40
5.2.4	Threats	41
5.3	Real-world practices of Intelligent Agents: Expert interviews	42
6.	Conclusion	45
6.1	Summary	45
6.2	Evaluation	47
6.3	Outlook	48
	Appendixes	49
	References