How To Enhance Enterprise-Wide Functional Intelligence With Gen AI

The rise of generative AI and other AI technologies has given way to increased collaboration within consumer goods enterprises. Innovation, it turns out, doesn’t work well in silos. Recent advancements in generative AI, therefore, have often resulted in cultural shifts rather than just operational ones. In this fireside chat, CGT spoke with Venkat Venkatraman, professor at Boston University, and Ed Van Siclen, VP of strategy for Veeva’s consumer products division about the benefits and opportunities around generative AI to enhance enterprise-wide functional intelligence as well as the challenges in implementing the technology and how consumer goods companies can overcome them.Venkatraman is a professor at Boston University's Questrom School of Business. For the first 10 years of his career, he was an assistant and associate professor at MIT Sloan School teaching strategy, and then he transitioned into exploring how digital technologies or information technologies are impacting businesses, strategies, and organizations. For the last 30 years at Boston University, he’s been focused on how legacy companies use technology to transform themselves because they're increasingly facing competitive threats from digital companies. Van Siclen runs the strategy function at Veeva Systems for the consumer products and food and beverage industry. He’s closing in on 40 years of experience in the industry and has seen a lot of technology revolutions in that time. Since ChatGPT came into prominence in 2022, every major consumer product company has been asking how they can make use of this technology — first as an assistant and more recently as an agent, according to Venkatraman. When looking at functions, he said, they were often run by functional experts whose knowledge was largely tacit in their minds. Now as we digitize that knowledge with AI, the entire organization becomes more intelligent and it can unlock a value that would have otherwise been lost in the industrial age.Experimentation with generative AI has largely been in functional areas, said Van Siclen, using L’Oreal’s work in the R&D sector with their bench chemists as an example. They are using generative AI as an assistant for those chemists to be more effective as they do their formulations.Of course, these types of initiatives can’t be achieved in a silo. Innovation requires building a cross-functional platform that seamlessly integrates data across all teams. Van Siclen uses the human body as a metaphor, likening the ERP, CRM and PLM to the major organs that can’t function without blood (or in this case data) flowing through them. When cross-functional agents are able to flow that consistent, accurate data across the organization, everyone in the organization is dealing with trusted data, he said.Just because an individual is successful, doesn’t mean the organization will be successful, emphasized Venkatraman. By focusing on data in motion, companies have an end-to-end view from the beginning of the input all the way to the end, and functional boundaries dissolve, making way for technologies like agentic AI to digitize processes.A truly adaptive organization is one that recognizes cross-functional barriers as non-existent and can very quickly respond to opportunities and challenges in the marketplace, said Venkatraman. CPG companies need to recognize that there is a faster time to market and that it is achieved not just by simply launching the product but by making sure that the value is delivered to the customer. Dynamic organizations will have a very different digital core that will define how they organize themselves, how they recruit people, and how humans and machines are going to work together to create AI agents as part of this next evolution, he said. Measuring value, however, continues to be a challenge. The mistake many companies make is to think of it as ROI from technology, but it's actually ROI from the technology plus all the business model changes that they need to make, said Venkatraman. Value is also not going to result from every single experiment. Van Siclen warned that when leveraging AI, the goal should be to achieve exceptional results. CPG companies need to be careful about over-rotating to exceptional mediocrity.

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