In part 1 of the series “Your AI Journey: Start Small AND Strategic,” we learned that it’s essential to begin your AI journey by focusing on delivering significant and measurable business and operational value. This is necessary because AI projects require significant data, technology, people skills, and culture investments to succeed. Thus, you will need the support of senior management to make these investments and stay the course as your organization learns to apply AI to derive and drive new sources of customer, product, service, and operational value.
However, don’t attempt to build all your data and analytics capabilities and architecture upfront – the dreaded “Big Bang” approach. Instead, focus on incrementally delivering quantifiable business and operational value (and exploiting the economies of learning).
Start small, but start small and strategic, not small and random.
Part 2 of this blog series will discuss how to triage your organization’s strategic business initiatives. We will break down that business initiative into its supporting use cases, enabling your AI initiative to deliver the required value and urgency to gain organizational agreement and support.
Start Your AI Journey with a Strategic Business Initiative
A Business Initiative is a cross-functional effort typically lasting 9-12 months that includes well-defined KPIs and metrics supporting the organization’s business and operational objectives.
To get senior management’s attention and commitment to support and participate in your AI journey, you must link your AI initiative to what’s critical to the organization – a Strategic Business Initiative. A Strategic Business Initiative is characterized as:
- Critical to the immediate-term (12 to 16 months) performance of the organization
- Documented (communicated either internally or publicly)
- Cross-functional (involves more than one business function)
- Owned/championed by a senior business executive
- Has measurable goals (KPIs and metrics)
- Has a well-defined delivery time frame
- Characterized as either an opportunity or a challenge
- Delivers significant, compelling, and distinguishable financial, organizational, or competitive advantage
Business initiatives focus on helping organizations optimize critical operational processes, improve operational efficiencies, mitigate regulatory and compliance risks, uncover new revenue streams, and create a more relevant, differentiated customer experience. Here are examples of strategic business initiatives by industry (Table 1).
| Industry | Strategic Business Initiatives |
| Consumer | Increase customer loyalty and retention Expand into new markets, customer segments, and audiences Enhance brand reputation and awareness |
| Education | Improve student outcomes Increase student enrollment and retention Improve faculty and staff retention |
| Energy, Resources & Industrials | Reduce environmental impact and carbon footprint Optimize asset performance and maintenance Increase safety and compliance |
| Entertainment | Acceleration the creation and distribution of engaging content Analyze and anticipate audience preferences and behavior Optimize distribution and monetization channels |
| Financial Services | Optimize transaction processes Reduce fraud, theft, and money laundering Improve customer acquisition and retention |
| Government & Public Services | Improve public service delivery and citizen satisfaction Optimize operational effectiveness and eliminate unnecessary costs Reduce fraud |
| Life Sciences & Health Care | Accelerate new drug discovery Improve patient outcomes and treatment effectiveness Reduce operational costs and inefficiencies |
| Manufacturing | Reduce unplanned operational downtime Reduce obsolete and excessive inventory Improve supplier quality and reliability |
| Retail | Improve customer satisfaction, loyalty, and referrals Improve sales forecasting and inventory management Reduce fraud, theft, and shrinkage |
| Technology, Media & Telecom | Create products and services to attract new customers and audiences Optimize operational effectiveness Expand into new markets and customer segments/audiences |
| Transportation | Optimize traffic flow and reduce congestion Improve delivery and service quality and reliability Improve operational effectiveness. |
Table 1: Strategic Business Initiatives by Industry
Note: strategic business initiatives are unique to each organization. Even organizations in the same industry will likely have different business initiatives. Consequently, always invest the time to identify and understand your organization’s strategic business initiatives.
By the way, the Value Engineering and Stakeholder Assessments templates (the first two steps in the “Thinking Like a Data Scientist” methodology) are great (and free) templates for assessing your organization’s business initiatives and the impact of those business initiatives on your key stakeholders (Figure 2).
Figure 2: Templates for Assessing Your Strategic Business Initiative
Understanding your strategic business initiative and its impact on key stakeholders is the first step in your AI journey. But to turn our vision into reality, you need to break down the business initiative into actionable use cases that define the specific outcomes, metrics, and data sources that will guide your data and analytics efforts. These use cases provide the roadmap for achieving business initiative success and creating value for your customers and organization.
Identifying Use Cases
Use Cases are a cluster of desired outcomes, critical stakeholder decisions, and the KPIs and metrics against which outcomes and decision effectiveness are measured.
Once you thoroughly understand your targeted business initiatives, we can apply the “Thinking Like a Data Scientist” methodology to identify, validate, value, and prioritize the use cases that support or enable those strategic business initiatives. A use case is characterized as:
- Directly aligned with the strategic business initiative’s goals, metrics, and time frame
- Supports the execution of the organization’s strategic business initiative
- Focused on optimizing a business or operational outcome
- Results are measurable
- Impacts multiple organizations
- Is part of a more significant value stream or value chain process
- Articulated with an action verb, a desired outcome, and a quantifiable measure of success
The goal is to identify the use cases that directly support the organization’s strategic business initiatives and then create a use case roadmap where the organization can build out its data, analytics, and people capabilities on a use case-by-use case basis (Figure 3).
Figure 3: Avoid Untethered, Random Use Cases
The Use Case Approach and the Economies of Learning
The “Economies of Learning” concept posits that data’s value increases exponentially as organizations leverage it to continuously learn, innovate, and make informed decisions that drive strategic improvements and competitive advantage.
A use case approach enables the organization to incrementally build its data and analytics capabilities (and avoid the dreaded big bang approach), where each use case directly contributes to its strategic business initiatives. Check out the “Big Data MBA Video Episode 17: Power of Use Case-based Data & Analytics Strategy” video to learn the key data and analytic economic concepts underpinning the incremental use case approach in Figure 4.
Figure 4: The Power of the “Economies of Learning”
Or as the “Dean of Big Data” GPT states:
“In a landscape increasingly governed by the intricacies of artificial intelligence, the capacity for perpetual learning and agile adaptation will delineate the victors from the vanquished. This dynamic environment demands not just the utilization of AI technologies, but a strategic embrace of the ‘Economies of Learning,’ where the iterative cycle of learning from data, applying insights, and fostering innovation becomes the linchpin of sustained competitive advantage. Organizations that master this cycle will not only survive but thrive, transforming challenges into opportunities for growth and differentiation.”
Dang, that digital Bill Schmarzo is much more eloquent than the human version!
Summary: Your AI Journey: Start Small and Strategic
All organizations are under intense pressure to deliver on the power and potential of AI. But starting that journey by focusing on AI or data can lead the company astray and hinder the organization’s ability to leverage AI to deliver more meaningful, relevant, responsible, and ethical outcomes.
As we remember from the blog “Schmarzo and the Value·Nauts: The Journey from Data to Value”, the journey from data to value starts by understanding how your organization defines and measures the effectiveness of your value creation processes. And remember:
Start small, but start small and strategic, not small and random.
