Good morning.
As CFOs determine the use cases for investing in AI, a major element to consider is how the technology will fundamentally shift the company’s operating model, including the workforce.
A new article published in the Wharton School’s business journal, “Disruption or Distortion? The Impact of AI on Future Operating Models,” offers insight on how to integrate AI into the fabric of an organization’s operations and strategy.
The authors make some interesting points. For starters, organizations will need to chart their own AI-transformation journey by prioritizing a “fluid” or “adaptive blueprint” over “brittle hierarchical” company structures. “Fluid organizations follow the 80/20 rule, able to respond to 80% of predictable events while remaining flexible enough to navigate the 20% of unforeseen challenges,” according to the article.
Some companies are aiming to have more flexibility with AI and machine learning use, Workday's (a CFO Daily sponsor) recent C-suite Global AI Indicator Report finds. Forty-three percent of respondents said they're making progress this year in ensuring the business is agile so resources can be reallocated at speed and scale as needed. And 35% said they're removing bureaucratic processes that slow decision-making. The findings are based on a survey of 2,355 senior business executives
A data-driven culture
One of the authors of the Knowledge at Wharton article is Hamilton Mann, group VP of digital marketing and digital transformation at Thales, a global technology and security provider. Mann also teaches about digital transformation as a senior lecturer at INSEAD, HEC Paris, and EDHEC Business School. CFOs play a key role in AI implementation, Mann says, especially from a data-driven culture perspective.
"By championing data-driven decision-making processes, CFOs can embed the importance of data throughout the organization, a foundational step for AI adoption," he tells me. Finance chiefs can design and monitor KPIs related to AI initiatives and ensure they line up with broader business goals, Mann says.
Also, in technology upgrades, the CFO should align with the CTO and the CIO and prioritize training programs to "foster a culture of continuous learning," he says.
An 'AI-first future' requires a culture shift
For some companies, digital transformation has been an ongoing process, even predating the pandemic. Typically, companies saw the need to “double down on digital literacy and deep technology” to reach their goals, according Mann and co-author Scott A. Snyder, a senior fellow at Wharton, and chief digital officer at Eversana, a life science services platform. But they suggest the era of AI has changed the game to mindset over skill set when aiming to meet company objectives.
“Rather than cultivating an army of data scientists and programmers, companies need to evolve their culture to embrace continual experimentation," according to the report.
Mann and Snyder argue that an “AI-first future” is as much about culture as it is about advances in technology. This means when applying it into the broader objectives of the company, ensuring it aligns with human values and positive societal impact.
Sheryl Estrada
sheryl.estrada@fortune.com
