Your Integrated AI Operating Model
A few weeks ago, I started a series of conversational pieces exploring what Artificial Intelligence (AI) could mean for organisations in this day and age.
This new posting on the challenges facing organisations introducing the use of AI in their ways-of-working builds on last week's posting on AI Maturity. It also builds on an article I wrote a few years ago on digitisation and the requirement that even in this new age, you still need to get the basics right.
Why do we need to talk about an Operating Model?
The way I suggest thinking about the basics is to describe how a business works in terms of the Operating Model. The term Operating Model means many things to many people.
For this piece, I would like to use the definition as used by Gartner.
An operating model is the blueprint for how value will be created and delivered to target customers. An operating model brings the business model to life; it executes the business model.
This is a helpful definition, but we can express this in multiple ways.
The purpose of this article is to provide a way to represent an Operating Model and to see what that means for adopting AI, or, to state it in another way: how it could help our thinking about an Operating Model help us in the move up the AI Maturity curve?
A multidimensional view
It is very important to see that the blueprint, in the definition above, needs to represent an integrated view across our business. For that purpose, we usually propose to use an 8-dimensional model. But, depending on your business, that could involve more or less dimensions (we have used a maximum of 10 dimensions with our clients). For instance, some business may have 'The Customer' as a separate dimension, for instance when evolving our target customer base is an important part of our business model.
Let's look at our proposed model.
Important to understand is that when we choose to change one of these dimensions, we naturally need to think about how we need to change any other dimension to maintain our organisational integrity and ability to deliver value.
A very common example.
If we decide to design and build a new Enterprise Resource Planning (ERP) solution and want to get any business benefits out of this (often very costly) programme, we would have to consider how this new technology changes our business processes, our people organisation design, risk & controls, etc. If we fail to do that, we end up with an incoherent organisation that at best does not use the newly available technology to get the best results, or at worst results in a failed, very expensive (often career ending) programme.
In my experience, it is remarkable how many organisations fail to consider an integrated operating model transformation journey properly up front.
What we suggest is to consciously think what our operating model should look like along the various stages of our AI Maturity journey.
Questions to ask are:
What competence do we need in our organisation at each level of the maturity curve?
What strategic partnerships do we need to ensure we can stay abreast of technology challenges that might hit us?
How do I evolve our internal and external governance to ensure we can control the new risks we can see emerge?
How can we create an adaptable data model?
And so on and so forth.
What does your spider look like?
A good way to represent this conscious evolution is by looking at it conceptionally in a spider diagram.
In the work that we do with our clients, we facilitate the conversation on how these dimensions will be coherent and implementable. Ensuring that each level is (a) achievable and (b) stable enough to run coherently without the obligation to have to move to the next level when we are not yet ready amongst one or more of these dimensions.
We suggest that an important message is that:
Artificial Intelligence is more than a technology solution. It is an coherent, integrated part of your evolving operation model that warrents careful planning and strategic and operational considerations.
Some interesting questions come to mind:
What conversations do you have in your organisations around operating models?
Does artificial intelligence feature in those conversations?
What dimensions are missing for your business in the proposed operating model?
Have you had any conversations around how an integrated operating model could evolve over time to meet your strategic and operational objectives?
What other questions come to mind when you think about AI and operating models?