AI as the Engine

not the Product

AI History

Machine Learning used as early as the 1950s
(models trained for very specific use cases)

Imagined for much longer by Computer Science pioneers such as Alan Turing

Has been a common theme in science fiction for a long time (100+ years)

Transformer architecture changed everything

Attention Is All You Need (2017)

Beyond Prompting

Enhance personal AI usage with tools (💘MCP)
(web browser, computer access, any API!)

How do we move beyond personal use of AI?

We incorporate AI as a system component!

AI as a System Component

Most software isn't AI-based and shouldn't be

Q: When does AI make sense as a system component?

A: Whenever you need a skilled system user behind an API

Benefits of AI as an Engine

Domain expert access

Rapidly testable component

Easily upgraded (reference a new model)

AI as a system user

Treat AI as a non-human system user, capable but non-deterministic

Apply robust architecture and engineering patterns around your system users

Use validation, guardrails, clear communication

AI Architecture

Human user: user(wait) → frontend → backend

System user (AI): backend → system user(prompt)

Combined: human → frontend → backend → AI

Future state? human → AI → backend 🤔

Data Architecture Template (I-P-P-R-R)

Ingest: Gather the necessary data

Process: Transform data into usable format

Prompt: Construct effective prompts + tools

Record: Store results and metadata

Report: aggregate/summarise results, iterate!

AI as the Engine: System Architecture

3 Real World Examples

None of them are AI products

Startups through to enterprise

All used AI as a key system component

Contract Compliance

Problem: Large insurance provider needed validation for aging claims system

Solution: Take a large anonymised snapshot, follow I-P-P-R-R to gather meaningful insights

Tech: OpenAI model on Azure

Outcome: An automated review tool that could be powered by non-technical staff

Key Lessons

Operating on complex/messy data is much harder than AI integration
(database was optimised for storage limits of the 1970s)

There is no substitution for deeply understanding a problem domain to craft an effective solution

At one stage a single execution could have spent up to $50,000,000 (500x our budget)
Big O notation matters!

Medical Billing

Problem: billing provider needed data from 1000s of pages, with skilled human oversight

Solution: AI-powered OCR as an automated form-prefill

Tech: Claude via Bedrock & Poppler (PDF library)

Outcome: Higher quality OCR than dedicated OCR teams were able to offer

Key Lessons

Combination of printed and (mostly doctor 😅) handwriting is not easy to work with

Pre-filling can be more valuable than complete automation

AI can build its own guardrails! We scraped all the MBS (Medicare Benefits Schedule) rules, over 13k

Forward Planning Schedule

Problem: Multi-month schedule (1000s of transport events), 100s of soft/hard constraints

Solution: Create rule structures, get AI to fill them in with human approval

Tech: Bedrock, rules engine

Outcome: AI as a rule generator rather than a rule executor

Key Lessons

Context window limits and token usage needs to be considered carefully

Non-deterministic actors can build great deterministic solutions

Human users reviewing system users is a great synergy

Takeaways

AI as a system component is API + tools + strong communication

Improve your personal and system AI with tools
(MCP: model context protocol)

Ingest, Process, Prompt, Record, Report

Humans are at the heart of what we do, AI should empower rather than replace them

Use AI pragmatically, avoid the hype

Thank you for your time!

Questions?

simon@terem.com.au

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