The COO dilemma: The intelligent enterprise and the COO of the future

By Mehmood Khan, Chief Operating Officer at SAP Africa

Recent advances in computational capabilities and the evolution of exponential technologies such as AI, machine learning, IoT, big data and predictive analytics all built on powerful cloud platforms have heralded the rise of the Intelligent Enterprise. This is creating exciting opportunities and new challenges for COOs, who are currently tasked with building the organisational infrastructure that will enable exponential organisational strategy.

The rise of exponential technologies is pushing organisations into a self-running future where machine learning, AI, predictive analytics, IoT and robotic process automation increasingly substitute or augment human capabilities. In the evolution from a traditional manual enterprise to a self-running enterprise, business leaders need to self-assess to first understand what phase they are in before developing digital change initiatives to bring them closer to their internal objectives.

“The rise of exponential technologies is pushing organisations into a self-running future where machine learning, AI, predictive analytics, IoT and robotic process automation increasingly substitute or augment human capabilities.”

At the lower end of the scale, the Manual Enterprise sees humans execute all tasks with no technology support. Transactional enterprises have systems that provide business information and guide processes, with humans defining what those processes should be, while a Digital Enterprise sees humans control systems that provide live data and rich analytics. All these enterprise models can be classified as non-learning enterprise systems.

Where organisations need to start moving toward is to the self-learning enterprise systems. The Intelligent Enterprise is driven by systems that assist in all core business activities, with humans directing activities and ensuring all the components of the Intelligent Enterprise are running optimally. Thanks to the immense power of modern AI and machine learning algorithms, enterprises may soon become entirely self-running, with systems that run certain functions autonomously while humans merely supervise.

The core of the Intelligent Enterprise

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Sitting at the core of the Intelligent Enterprise is next-generation enterprise resource planning systems that integrate various traditional and exponential technologies into a single system built on powerful cloud platforms. SAP S/4HANA Cloud sits at the centre of a range of industry and line-of-business -specific solutions including procurement, human capital management, travel and expense management, transactional, business planning and financial reporting systems.

What makes the Intelligent ERP different is how hands-free, intuitive user experiences with digital assistance and instant insights deliver value-adding experiences to workers, while AI and predictive analytics automate for greater efficiencies in a range of tasks. These next-generation processes are also forcing a reinvention of business processes, with best practices built on the latest innovations enabling business leaders to reimagine entire business models.

This is posing distinct challenges to how people are sourced, managed, motivated and retained.

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Human capital management in the Intelligent Enterprise

By 2025, millennials will comprise 75% of the global workforce. This generation of workers is markedly different than any before and will have immense influence over the way we think about work and employment. Attracting, engaging and retaining talent is already a top C-level priority, especially where scarce digital skills are involved.

Contingent workers – part of the so-called Gig Economy – are already disrupting human capital management in the digital age. At the end of 2017, nearly half of the global workforce were contingent workers. Effective management of a diverse and geographically dispersed employee base is one of the defining challenges for exponential organisations.

Enabling effective human-machine collaboration

The disruption posed by the entry of the millennial workforce pales in comparison to the seismic shift that AI and automation will bring to the world of work. Nearly every occupation in every industry will feel the effects of automation, as routine physical and cognitive tasks are automated. While this does offer workers an opportunity to elevate the work they do by freeing them up from mundane, repetitive tasks, a period of uncertainty and change is inevitable.

Workers of the near future will need to learn how to interface with technology at every step of the work day. Robots are sure to replace some jobs, but for the most part job roles will evolve to prioritise human-machine collaboration.

Here, the Intelligent Enterprise plays an anchoring role: by combining Intelligent Cloud ERP with a digital workforce, businesses enable a Digital Enterprise where human workers interface with robotic process automation, AI and machine learning, and predictive analytics to conduct higher-value tasks.

Digital change checklist for COOs

Managing the transition to a digital workforce enabled by an Intelligent Enterprise will challenge organisational leaders’ change management abilities. Successful digital change management is built on four cornerstones, namely:

1. Ensuring digital leadership – By developing a compelling digital vision, business leaders create a sense of urgency for digitalisation and ensure top management act as role models for the rest of the organisation.
2. Fostering a digital mindset – Business leaders need to identify digital champions internal to the organisation and empower them to promote digitalisation initiatives. However, they do also need to ensure they track and assess the impact of digitalization
3. Establishing digital governance – By aligning KPIs to digital adoption and tracking progress, business leaders are better placed to adapt the formal organisation to the new digital vision.
4. Building digital skills – The time of the learn-work-retire career model of old is over. The new approach to learning and work is one of constant upskilling and regular change. Business leaders need to provide skills development opportunities that enhance internal digital skills and competencies. Integration with AI, machine learning and robotics is critical for the future of work, which is strongly favoured toward human-machine collaboration.

Mehmood Khan is Chief Operating Officer at SAP Africa.. SAP is a market leader in enterprise application software, SAP. It helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition.