How to know when businesses are serious about AI

 I had lunch with a good friend and colleague Wednesday (December 2025), who is deeply experienced in artificial intelligence.  We talked about how AI is being used, how it is being deployed and when and where companies can expect to see value from AI.

I told him (with full acknowledgement, I am an observer of AI, not an expert) that the current wave reminded me a lot of when SAP was entering the US market and ERP was taking over from disparate financial systems or manufacturing systems.  At that time and soon afterward, we developed a mantra: paving the goat path.  What many companies wanted to do with SAP, a modern, fully integrated application, was to configure it to work the way they had always worked - no rethinking of process flows or decision making, just faster and more integrated ways of doing what they were already doing.

Needless to say, configuring the software to mimic their existing business processes was a mistake.  What this did was lock in older, inefficient processes and, once the configuration was complete, it became difficult to revert the software back to its original state without a full restart.  When you are confronted with new technologies that are a step change from what you've been working with in the past, it makes sense to step back and reconsider everything.

You'll know that companies are serious about AI when they stop using it as a wrapper to existing processes and activities and restructure or rework their core processes and decisions with AI capabilities at the core of what they do.  Too much of what we hear about regarding AI is a wrapper around older, inefficient processes.  Companies are trying to squeeze more value out of older ways of doing things.  The real value will occur when those companies ask themselves - how do I restructure this process, these decisions, this workflow with AI at the core.

The challenge with rethinking is that you cannot obtain "immediate" ROI if you are rethinking the way you work and re-architecting to put powerful tools at the center or core of how you work.  These changes will take time, and the hype machine around AI would lead you to believe that everyone is wildly successful and recognizing great returns from AI.  What they say ain't necessarily so.

Use of AI on the periphery of the business will provide marginal returns at best, but requires low commitment.  When you see companies reworking their operational and decision processes to embed AI at the core, then you'll know they are serious about putting AI to work.

Comments

Post a Comment

Popular posts from this blog

Executives: narrow your focus for success

 I've been in and out of the "strategy" business for years, working as an ELT member in a startup, defining strategy, working as a strategy consultant, helping businesses develop and implement strategy, and teaching strategy in a master's program.  I find strategy fascinating, enough that I wrote a book on strategy with a friend and colleague translating military maneuver strategy to the business world .  Shameless plug! What's interesting about executive teams is how much they want to "get the strategy right" and of course they are incented to succeed.  What's also interesting is how little many executive teams understand about the reality of writing down a strategy and the work and focus it takes to implement a strategy.  What's worse is that most executive teams attempt to assign themselves so much of the responsibility for implementing strategies that they lose sight of the key responsibilities that leadership teams should focus on:  building...
Read more

Orwell, the surveillance state and what's next

 I've just finished reading a book that illustrates the interesting parallels of two major figures in the 20th century, Winston Churchill and George Orwell.  The period of time they were alive and the kinds of change they experienced seems quite amazing now.  There are interesting similarities between the two - both were outsiders in their respective classes and friend groups.  Both were natural contrarians.  Both rose to big occasions but were not respected and often did not live up to their billing in normal, everyday life.  The book is called Churchill & Orwell, The fight for freedom , by Thomas Ricks.  After reading it, I'd highly recommend it.  While topically about history, the author does a good job pointing out what both Churchill and Orwell had to say about our situation today. I stumbled across the book at my local library.  I did not need any encouragement to pick it up.  Churchill by himself is a great, and flawed charact...
Read more

Why Taiwan is like Venezuela and the Ukraine

We are all familiar with the protracted Ukrainian war, once thought to be a rapid advancement by the Russians, now looking like a science fiction version of the Somme.  Further, we've witnessed the US attack on Venezuela.  Both of these incidents portend a further action by an uninvolved party - China - but perhaps not in the way you think.  Both Ukraine and Venezuela are targets of a large nearby neighbor who nurses anger or grievances and thinks that taking ownership or at least overtly influencing the politics of its neighbor will resolve old disputes or open new opportunities.  The differences are that Russia has already invaded Crimea and continues to try to win in Ukraine, while the US under Donald Trump has decapitated the Maduro regime but seems to have no follow-on plan in place, mostly to take possession of the largest oil reserves on the planet. All the while, China watches these two actions carefully, as the last large country with an open and long-runnin...
Read more