For the past three years or so, I’ve heard people talk about “intelligent enterprise” more and more. But I’ve also noticed that they have very different ideas of what it actually means, especially when it relates to them and their business. I don’t blame them — it’s a pretty radical concept.

What a house and an intelligent business have in common

When I think about how to define intelligent enterprise, here’s an example that I like to give, because it’s something that most of us can relate to. Most of our homes have different functional areas that exist to make our family’s lives either safer, or more comfortable, or both. Things like wiring, plumbing, HVAC, home-alarm systems, fire and carbon-monoxide detectors, major appliances like dishwashers, refrigerators and ovens and so on.

Most of these functions we barely notice on a day-to-day basis. And by and large, they work in a siloed way — my HVAC air filter doesn’t tell me it’s time to change it and schedule the furnace service turn-on at the same time, for example.

But now, SMART home technology like Google Home or Amazon Echo have been invented to do essentially just that — connect all these functions, help them talk to each other, and learn how they can work together efficiently. In essence, how they can be proactive (and in turn help ME be proactive) rather than reactive. And just like we don’t build modular homes anymore, we’re not building modular businesses anymore, either. We’re becoming smarter in our enterprise. In fact, I’d go so far as to say that we must do this.

So, what does it actually mean to be an intelligent enterprise?

Until now, the traditional model has put enterprise resource planning (ERP) at the center of how business operates. But function is no longer the central organizing construct of a successful enterprise. Now it’s got to be all about the customer. Everything we do — from brand engagement, product and service delivery, business operations and customer experience — needs to be oriented around the customer and business value.

In other words, the intelligent enterprise is the difference between driving towards successful functional ends and focusing on using your functions to quickly and nimbly serve your customer’s needs.

Two things need to happen first

First, the walls between business functions must come down, replacing linear processes with collaborative, responsive, iterative end-to-end processes that cut across functions.

Then, re-calibrate and break down activities to work effectively in the new model. Of course, these are large, fundamental shifts in processes, procedures and people’s mindset and management. But, just like SMART homes are still evolving, becoming an intelligent enterprise is not a simple, one-size-fits-all “solution in a box.” Rather, it should be the North Star — the goal to aim for in every action from this moment forward.

The pivot starts in your C-suite

Now, here’s something that actually might surprise you. CEOs and COOs of enterprises from across industries tell me all the time that they are the only ones in their companies looking across the value chain, focusing on the seams between processes and functions.

It should be much more than that.

Chances are your company has a lot of technical data wrapped up in a big ERP core. But to truly leverage it, you need to make a wise pivot to the digital core — where data are consistent and available across the enterprise. This digital core will give you the insights to make the wise pivot — identifying where to drive value everyday — whether it be through revenue, margin or cost. And perhaps that is the place to start your transformation. It will be different for each company.

Four actions to find your intelligent enterprise North Star:

1. Stop trying to optimize by function

Three years ago, it was all about e-tailing and having an online presence. The world has innovated way past that. Now it’s about understanding your consumer in the community where they live. Let's get out of our silos, think in terms of end-to-end process, and optimize for customer and business value. That is going to make us a little uncomfortable. And it's going to take some training, rewiring and rethinking of our classic organization structure.

2. Simplify and standardize

Intelligent automation and machine learning can help reduce low-value work. And that means you can do two major things. One: simplify and standardize where it makes sense — like back- and mid-office processes. Two: determine where it does matter to differentiate and use our great human minds and problem-solving skills where they’re most needed and valued. Understand and embrace that complexity.

3. Treat change as a constant, not just an event

Remember, customers expect you to deliver faster, better, customized experiences to increase their convenience and address their needs. So managing change needs to be constant. Work collaboratively, start with the outcome in mind and move quickly in an iterative process. Change is faster today than it ever has been, yet it will never be this slow again.

4. Become data and outcome focused

Organizing around collecting, analyzing and applying consistent data is critical. If you focus on driving insight-driven client or business outcomes, you’ll make better decisions, improve performance, and make the wise pivot to new customer value and revenue sources.

Your people are the change

To me, all this is what Intelligent Enterprise really is. It comes out of three types of work: strategic, intelligence and execution, with the appropriate workforce and skills aligned to each. Execution can be automated, reducing your people’s workloads by centralizing or eliminating basic, low-value tasks. This will free up time to start thinking what being an intelligent enterprise means to your company — and how to get there. In other words, you’ll find your North Star.

The intelligence work — where humans partner with machines — will continue to depend on your people’s great brains to drive elevated thinking and capitalize on real-time decision-making. This will give you the breathing room to think holistically and strategically across your entire value chain, not just in pockets.

My challenge to you

So, there’s some work to be done and here’s what I’d like you to do: Find your North Star. Talk to your peers and leadership about what moving to intelligent enterprise looks like to them. And then get the wheels in motion.


Don Schulman

Senior Managing Director – Supply Chain & Operations, Management Consulting

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