AI takes more than technology

Organisations face two challenges at once. They want to benefit from AI while maintaining and modernising the complex set of applications that underpin their business. Many still treat modernisation as an IT project. Christa van den Elzen, an agile transformation expert at PA Consulting, sees it as a question of how leaders want to run the business.

‘Where do you stand out from your competitors? Where do you need flexibility? And what can you standardise and scale?’ she asks. The answers belong in the boardroom and can change how the whole organisation operates.

Use AI where it adds value

Many organisations consider themselves ready for AI because their employees use tools such as Copilot. Paul Heij, a supply chain expert at PA Consulting, says that focus can lead organisations to improve individual tasks while missing opportunities to redesign and improve the core processes those tasks are part of.

A modern technology foundation makes that work easier. Enterprise resource planning systems such as SAP and Oracle hold large volumes of data and support critical business processes. They form one part of a wider set of applications.

‘The better your processes and data are organised, the easier it is to introduce new technology,’ says Heij. He advises leaders to use AI where it adds value and to tackle weaknesses in their underlying systems directly.

Make decisions together

Organisations can experiment with AI while they modernise. ‘Experiment with AI to find out what’s possible,’ says Van den Elzen. ‘At the same time, develop an organisation-wide view of how you want to manage your processes and data and make decisions.’

Where AI fits depends on what the process needs to do. Heij sees particular value in AI when a process involves large volumes of data, high complexity or outcomes that vary. When a process must produce the same result every time, a standard system may be the better fit. Business and IT leaders need to make those choices together, guided by the organisation’s strategy.

Give IT a seat at the board table

Technology increasingly shapes business strategy as well as helping organisations deliver it. That shift calls for executives who understand what technology makes possible and can work with IT leaders to set direction.

It also creates a role for people who can connect strategy, processes and technology. A business integration manager, for example, can translate what the business needs into something its systems can deliver. ‘You need people who understand the business and know what the systems can do,’ says Van den Elzen.

Involve employees from day one

During one international implementation, a technical solution failed to account for regional differences. Business teams lost confidence and put the project on hold. ‘We brought both sides together and worked with the leadership team to revisit the design principles,’ says Heij. The project could then move forward.

For Van den Elzen, the experience shows how much changes during a transformation. Alongside processes and technology, leaders change who is responsible for what, who makes decisions and how teams work together. That is why she urges leaders to involve employees from day one.

Decide how people and AI will work together

As AI takes on more routine tasks, personal contact, creativity and the ability to weigh complex trade-offs become more important. So do experience and judgement. AI produces outputs based on the data and instructions it receives. When a decision matters, people need to judge whether those outputs are accurate, complete and appropriate.

Leaders also need to explain why a system is taking over certain tasks and what that means for employees’ roles. ‘You can implement the best technology available,’ says Van den Elzen. ‘But if you don’t involve people from day one, you’ll lose them and encounter resistance.’ For leaders, the work begins with deciding how people and technology should work together.

Read the article in NRC in Dutch.