Hackett: How AI is Reshaping Enterprise Technology Strategy

AI has undoubtedly introduced a profound transformation within enterprises, one that challenges their traditional approaches. 

Working across various elements of operations, the integration of AI has become more than just a trend—it represents a fundamental reimagining of how businesses leverage technology to drive strategic innovation.

Yet, in this implementation brings complexity and enterprises are seeking clarity about how to navigate the intricate world of digital transformation. 

To find out how enterprises can tailor their strategies, we spoke with David Ketchin, Managing Director for Europe at The Hackett Group.

Disrupting traditional technology paradigms

The conventional wisdom surrounding enterprise resource planning (ERP) systems is being fundamentally challenged by AI technologies. 

"Historically, we've emphasised ERP as the core strategic platform, encouraging organisations to make it as pervasive as possible," David notes. 

The traditional approach involved massive upgrades, with budgets potentially running into hundreds of millions of pounds for migrations like SAP S4/HANA.

However, the rise of AI is creating a seismic shift in this approach. Companies are now questioning whether extensive ERP upgrades are truly necessary. 

"Do we need to fully migrate and modernise our ERP to take advantage of its AI support, or can we leverage our cloud AI platform today to integrate, abstract processes and work, and do more?” says David

This emerging strategy suggests that organisations might enhance existing systems through AI capabilities, rather than undertaking costly wholesale replacements. 

The implications are profound, potentially allowing companies to extend the life of current technologies while redirecting funds to more strategic initiatives.

Acceleration of AI adoption

The pace of AI implementation is experiencing remarkable acceleration. 

David observes that the landscape has transformed dramatically over recent years, moving from experimental stages to more sophisticated, scaled implementations.

"Over the past couple of years, there's been a lot of experimentation and education as organisations sought to understand AI's potential," he explains. The focus has shifted from exploratory questions like "What can AI do?" to more strategic considerations of "How do we scale it across our organisation?"

Most organisations have now implemented AI in some capacity, demonstrating a more mature understanding of its potential.

This represents a significant evolution in technological thinking, with businesses viewing AI as a fundamental transformation tool rather than merely an experimental technology.

Overcoming implementation challenges

Scaling AI adoption is not without significant challenges. 

David highlights that process complexity and data quality remain substantial hurdles for many organisations. The Hackett Group's research reveals that leaders consistently identify existing process complexities as their primary concern.

"For the past two years, many clients have told us they'd love to use AI, but their data quality is too poor to do so effectively," David explains. 

The root cause often lies not in data models, but in the processes generating that data.

To address these challenges, David recommends establishing a robust AI Centre of Excellence (COE). 

This centralised approach provides structure and governance, ensuring AI initiatives align with broader business objectives and are implemented cohesively.

Critically, David argues that business functions—not just CIOs—should drive the AI agenda. "It's about getting things done that are relevant to the business agenda, not implementing technology for its own sake," he emphasises.

Uniting functions for AI adoption

The collaborative approach between business functions and IT ensures that AI solutions are not just technically impressive, but genuinely address real operational needs. 

This strategy prevents isolated implementations and promotes enterprise-wide transformation.

As organisations continue navigating this complex technological landscape, the key lies in strategic, thoughtful AI implementation that genuinely enhances operational capabilities while remaining aligned with core business objectives.

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