We have discovered the importance of commencing your AI expedition by focusing on delivering significant and measurable business and administrative value as emphasized in part 1 of the article “Your AI Journey: Start Small AND Strategic.” This emphasis is crucial because the success of AI projects hinges on the availability of essential data, technologies, skill sets, and cultural investments. As your organization harnesses AI to innovate and generate fresh streams of consumer, product, service, and operational value, securing the backing of senior management becomes imperative for making these necessary investments.
However, it is advised to steer clear of the risky “Big Bang” approach, which involves attempting to construct all data, analytics, and architecture components simultaneously. Instead, the recommendation is to leverage the benefits of incremental learning and progressively deliver quantifiable business and functional value.
Initiate your AI venture with a well-defined business initiative.
A business initiative typically spans 9 to 12 months, encompassing clearly outlined Key Performance Indicators (KPIs) and metrics that align with the organization’s operational and business objectives.
It is essential to align your AI initiative with a Strategic Business Initiative that holds significance for the business to attract the attention and commitment of senior leadership to actively participate in the AI journey. Here are the characteristics of a proper business initiative:
- pivotal for short-term organizational success (12 to 16 weeks)
- documented (either publicly or internally communicated)
- cross-functional (representing multiple business functions)
- endorsed by a senior business executive
- includes measurable indicators and KPIs
- has a well-defined delivery timeframe
- framed as a problem or an opportunity
- offers a significant, compelling, and distinguishable economic, corporate, or competitive advantage.
Business initiatives are geared towards aiding organizations in streamlining critical operational processes, enhancing operational efficiencies, mitigating regulatory and compliance risks, exploring new revenue streams, and cultivating a more distinctive and relevant customer experience. The article provides industry-specific examples of strategic business initiatives (refer to Table 1).
It is important to note that each business sector has its unique set of proper business initiatives, and similar industries may have varying business pursuits. Therefore, it is imperative to invest time in identifying and comprehending your company’s specific business initiatives.
Additionally, the Value Engineering and Stakeholder Assessments templates (the initial steps in the “Thinking Like a Data Scientist” methodology) serve as valuable (and complimentary) tools for evaluating your organization’s business initiatives and their impact on key stakeholders (refer to Figure 2).
The initial phase of your AI journey involves grasping your strategic business initiative and its implications for key stakeholders. Subsequently, breaking down the business initiative into actionable use cases that delineate the specific outcomes, metrics, and data sources essential for realizing your vision is essential. These use cases serve as the roadmap for successfully executing business initiatives and delivering value to both customers and the organization.
Identifying Use Cases
Use cases encompass a set of desired outcomes, critical business decisions, KPIs, and metrics utilized to assess outcomes and decision effectiveness.
Once you have a firm grasp of your strategic business initiative, you can leverage the “Thinking Like a Data Scientist” methodology to identify, test, evaluate, and prioritize use cases that align with or support your targeted business initiatives. A typical use case is characterized by:
- alignment with the goals, metrics, and timeframe of the strategic business initiative
- reinforcement of the organization’s strategic business initiative during implementation
- focus on optimizing an operational or business outcome
- quantifiable outcomes
- impact across multiple business functions
- alignment with a value chain approach or value flow
- articulated with an actionable verb, desired outcome, and measurable success indicator.
The objective is to pinpoint use cases that directly bolster the organization’s strategic business initiatives and subsequently develop a use case roadmap to incrementally enhance the organization’s data, analytics, and human capabilities (refer to Figure 3).
Embracing the Learning Economy and the Use Case Approach
According to the theory of “Economies of Learning,” organizations leverage data to continuously learn, evolve, and make informed decisions that drive corporate advancements and competitive advantages.
By adopting a use case approach, the organization can progressively enhance its data and analytics capabilities, steering clear of the disruptive big bang approach where each use case instantaneously contributes to its strategic business initiatives. To delve deeper into the critical data and analytical concepts underpinning the incremental use case approach (as depicted in Figure 4), it is recommended to watch the “Big Data MBA Video Episode 17: Power of Use Case-based Data & Analytics Strategy” video.
The wisdom shared by the human version of Bill Schmarzo pales in comparison to the eloquence of the digital counterpart!
Your AI Journey: Commence with Deliberation and Precision
Amidst the growing pressure on businesses to harness the potential of AI, embarking on this journey by fixating solely on AI or data could lead the business astray, hindering its ability to leverage AI for generating more valuable, relevant, accountable, and ethical outcomes.
The transition from data to value commences with a deep understanding of how your organization defines and assesses the efficacy of its value creation processes, echoing the insights from the “Schmarzo and the Value-Nauts: The Journey from Data to Value” article. Remember:
Start small, but embark with caution and purpose, rather than impulsively.
