Setting the Right Thresholds - The Crucial Step for Business Leaders to Maximize Value from AI
-
AI relies on machine learning models to make predictions and drive operational decisions, but first a business must set a decision threshold to determine which predictions lead to action.
-
The decision threshold draws the line between yes and no, determining how aggressively to act on the model's predictions.
-
Tuning the threshold involves tradeoffs between competing objectives like blocking more fraud while inconveniencing fewer legitimate customers.
-
The choice of threshold has a major influence on the business value delivered, more so than tweaks to the model itself.
-
To collaborate effectively on AI initiatives, business leaders need a pragmatic understanding of how ML models drive decisions in operations.