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October2026

QuantumBlack

」

AIbyMcKinsey

TheAIoperating

system:AnewwayforCEOstoruntheenterprise

AnAloperatingsystemcanbecomeanenterprise's"secondbrain,"butonlyifCEOsrethinkhowmanagementitselfevolves.

ThisarticleisacollaborativeeffortbyAsutoshPadhi,BrianElliott,DanielSwan,KimBaroudy,andVikSohoni,representingviewsfromQuantumBlack,AlbyMcKinsey.

Ataglance

-Aladoptionisoutpacingenterprisevalue:McKinsey's2026StateofAlsurveyshowsthat40percentofrespondentsatlargecompaniesreportscalingAlagents,yetonly6percentsayAlgeneratesatleast5percentofEBIT.

-AnAloperatingsystem(AIOS)canunlockanincumbent'shiddenadvantage:Itputsthecompany'saccumulateddata,expertise,andinstitutionalknowledgetoworksoleadersfromtheC-suitetothefrontlinescanmakebetterdecisionsandtakefasteraction.

-ThevalueoftheAIOSissignificant:EarlyAIOSdeploymentshaveacceleratedplanningcyclesbyuptotentimes,achievedfirstvalueinabout12weeks,andreducedtimetoROlasthesystemextendstonewdomainsby50percent.

-TheAIOSreducestraditionalmanagementconstraints,requiringshiftsinhowthebusinessis

run:AsAlreduceslong-standingconstraints,CEOsneedtomovefromcalendar-drivenreviewsand

informationflowstowardcontinuousintervention,moredistributeddecisions,andgreateremphasisonhumanjudgment

ThefutureofmanagementintheAlageisstartingtolookprettydifferent.Considerthisscenario:

Tuesday,8:00a.m.:TheCEOofaglobalinsurerreturnstotheofficeafterattendinganindustrymeeting

whereshelearnedthatregulatorsinseveralmarketsplantocapmarginsoncertainretailproducts.Herfirstmove:Askthecompany'sAlOStoassessthecompany'sexposure.Withinminutes,thesystemhasreadthedraftrules,matchedthemagainstthefirm'sproductcatalog,andreturnedananswer:About140productsinsevencountriesaresubjecttothenewregulations,androughlyathirdareatriskofbreaching.Italso

flaggedanissueitcannotresolve-eachregulatordefinesmargindifferently.TheCEOroutestheanalysistothecountrybusinessunitleaderstovalidatebyendofday

9:15a.m.:TheGermanbusinessunitheadopenstheAIOS,whichhascodifiedthedraftrules-scope,

marginformula,threshold,timing-andreconciledtheregulators'definitionofmarginwithhowthebusinessmeasuresitacrosspricing,finance,andcommissionsystems.Herunsthemarginmodelagainstliveproductdata,challengesacostallocationassumptiontheregulatorisunlikelytoaccept,andrerunsthemodelwitharevisedassumption:Nineproductsarenowinbreach.By4:00p.m.,allsevencountryanalyseshavebeenrolledupintotheCEO'sview,withtheassumptionsbehindeverynumbervisible.

Wednesday,8:00a.m.:BeforetheCEOandherbusinessunitheadsmeetbyvideo,theAIOShasalreadymodeledtheoptionsforeachbreachingproduct-reprice,redesigncoverage,restructurecommissions,orwithdraw-andestimatedtheeffectsonvolumes,distributionpartners,andcapital.Leaderstestscenariosliveandalignonaplan:protectkeydistributionpartnerships,withnowithdrawalswithoutCEOapproval.Thesystemrecordsthosedecisionsasguardrails.

TheAloperatingsystem:AnewwayforCEOstoruntheenterprise2

Thursday,8:00a.m.:Line-of-businessheadsredesignproductswithintheguardrails.Alagentsgeneratecandidatedesignsandpricesandtesteachagainstthecodifiedruleandproductgovernancepolicies;

actuariesrefinetheoptions,compliancereviewsthem,andlineheadsdecide.Agentsthendraftpartner

communicationsforhumansign-off.Aseachchangeisapproved,product-levelforecastsupdateandrollintothegroupfinancialscenario,allowingtheCFOtowatchtheplanreshapeandstress-testit-whatif

regulatorsadoptthestricterdefinition?Afterlaunch,thesystemtrackseachproductagainstthethresholdandalertslineheadsbeforeitdriftstowardbreach.Thenextregulationwillbefaster:Therules,definitions,andmodelsareallnowpartoftheenterprise'ssecondbrain.

ThisAIOSscenarioisn'tafuturisticvision;companiesarebuildingittoday.AnAIOSisamanagement

layerthatfunctionslikea“secondbrain”fortheenterprisetohelpCEOs,businessleaders,andmanagersmakebetterdecisionsandactmoreeffectivelyandquickly.Itallowsincumbentstoharnesstheirgreatestuntappedadvantage:decadesofproprietarydata,operatingexperience,anddomainexpertise.

ThecapabilityiscrucialforcompaniestoescapethemireofhighAladoptionrateswithlowreturns.

McKinsey's2026StateofAlsurveyrevealsthat40percentofrespondentsatlargecompanieshavescaledAlagents.1Yetonly6percentattributeasignificantfinancialimpact(atleast5percentofEBIT)toAl,aboutthesameastheprioryear.²ThegapsuggeststhatthechallengeisnolongersimplygettingpeopletouseAl;itischanginghowtheenterpriseitselfworks.

ThesearestillearlydaysforAIOS,buttheresultshavebeenpromising.Ourexperienceshowsthat

companiescanaccelerateplanningcyclesbyuptotentimes,achievefirstvalueinaninitialdomaininabout12weeks,andreducetimetoROlasthesystemextendstonewdomainsby50percent.Othergainsinclude40percentimprovementsinproductivity,50percentsavings,andupto90percentreductionsinwork

streamcycletimes.

ThefullpoweroftheAIOScomesfromitsabilitytoharnessAltogeneratenewgrowth,business

models,andproductivity.ButthatpotentialrequirescompaniestobothbuildanAIOSthatharnesses

theintelligenceitalreadyhasandrethinkhowtorunabusinesswhentheAIOSreducestraditional

managementconstraints.Thisisthepathwaytodevelopingacompetitivemoatthatgrows.Thesooneracompanymoves,thelargerthatmoatcanbecome.

1Thesurveydefines"argecompanies"asorganizationswithannualrevenuesofmorethan$1billionand"scaling"asscalingAlagentsinoneormorefunctions

2DanTinkoff,LievenVanderVeken,MichaelChui,andTaraBalakrishnan,"ThestateofAlin2026:OntheroadtoROI,"McKinsey,August25,2026.

TheAloperatingsystem:AnewwayforCEOstoruntheenterprise3

TheAloperatingsystem:AnewwayforCEOstoruntheenterprise4

WhatisanAIoperatingsystem?

ThinkofanAIOSasasecondbrainfortheenterprise.Itisacontinuouslyoperatinglayerthatmaintains

enterprisecontext(thatis,theknowledgethatgivesdatameaning),reasonsacrossfunctions,recommendsorexecutesdecisions,andlearnsfromoutcomes.ItconnectstheCEO,C-suite,functionalleaders,

managers,andthoseonthefrontlinesinawaythat'sneverbeenpossiblebefore(Exhibit1).

Exhibit1

AnAloperatingsystemdrivesvaluecreationfromstrategytoexecution.

TheAlorchestrationlayerenablesinformationtomoveup,down,andacrossalllevelsofanenterprise

What

Valuecreation

How

Alforgrowth,Alforproductivity,andAlforinnovation

agenticworkflowsandworkflowsforagenticAl

ReinventionwithCleansheetredesignofdomains,functions,

Valuecapture

withagents

Changemanagementandcapabilitybuildingintheagenticworld:fasterinsights,betterdecisions,andsuperiorexecution

"Secondbrain"Ontology,semanticunderstanding,Alandmachinefortheenterpriselearningmodels,agenticAl,always-onaccess

Strategiclevel

Functionallevel

Executionlevel

Alorchestrationlayer

McKinsey&Company

Peopleateachlevelseetheinformationrelevanttotheirresponsibilities,askquestions,usejudgment,makedecisions,anddelegate.Informationmovesup,down,andacrosstheenterprise.Thesystemalsolearns

andexpandsastheenterpriseusesit.Asnewbusinessdomainscomeontothesystem,theycanreuseandextendexistingcapabilities(seesidebar,"ElementsoftheAIOS").

AnAIOSconnectstheCEO,C-suite,functionalleaders,managers,and

thoseonthefrontlinesinawaythat'sneverbeenpossiblebefore.

TheAloperatingsystem:AnewwayforCEOstoruntheenterprise5

ElementsoftheAIOS

TheAloperatingsystem(AIOS)shouldbebuiltonanopenarchitecturethatkeepsthecompanyincontrolofitscoreintelligence(theenterprise's"brain")whileallowingtheunderlyingtechnologytobeswappedoutasitevolves.

Theexistingestate:

-Infrastructure:Existingcomputeinfrastructurecansupporttheinitialdeployment.Whilesoftwareasaservicecangetcompaniesstarted,thetarget-statepreferenceistouseacompany'sowncloudoron-premisesdeployment

-Storageanddata:Structuredandunstructureddataacrossexistingenterprisesystemsandplatforms,includinglegacysystems,canstaywheretheyare.Adddataproductsasneeded,andconnectthemvirtuallytothesemanticlayer.

-Largelanguagemodels(LLMs):Mostcompaniessourcemodels,includingopen-weightLLMs,from

manyproviderstoavoiddependenceonasingleone(ensuretheLLMmodelsarenotallowedtotrainonyourdata,oryoumayslowlyloseyourenterprise's"brain”andproprietaryknowledgetotheLLMs).

AIOSontop:

-Semanticlayer:ThislayerprovidesAlwithcontext-aconsistentunderstandingoftheenterprise(itsentities,relationships,definitions,policies,andbusinesslogic).Ontologiesandknowledgegraphscanmakecriticalpartsofthatcontextexplicit,persistent,andreusable.Itskeypurposeandmeasureofvalueareitsabilitytoextendthecontextwindowoftheagentssotheycanoperatelikeexperiencedemployees,dramaticallyenhancingtrustintheirinterpretation,recommendations,andactions.

-Analyticsandmodels:Deterministicmachinelearningmodelsandanalyticaltoolshaveasignificantroleincreatingvalueandextendingthecapabilitiesofagentsviatoolcalls.Productizeexistingmodelsandaddnewonesasneededtoreimaginehigh-trustworkflows.

-Agentdefinitionandorchestration:Agentsaredeclarativeorcodedandarebuilttobereused.Agentsleverageallthelayersbelowtoserveupanswerstohumansinaneasy-to-digestway.DifferentLLMmodelscanbeselectedandorchestratedaccordingtotheproblemtheyarebestequippedtosolve.Dynamicallyoptimizingacrossmodelsforperformanceandcostremainsanevolvingcapability.

-Experiencelayer:Thislayerconnectsintelligencetoactionbybringinginsights,decisions,andexecutiontopeoplewheretheyworkthroughexistingsystemsorconversationalagenticinterfaces.

TheAloperatingsystem:AnewwayforCEOstoruntheenterprise6

AnAIOSisnotanexecutivedashboard,whichreportsonwhathashappened;rather,itprovidesareal-

timeviewofwhatishappeningnowandwhatcouldhappen,offeringrecommendationsandenabling

collaborationacrosstheenterpriseinnearrealtime.Itconnectstolivesystems,andtheinterfaceoperatesasacockpitsoexecutivescanmakedecisionsandactquickly(table).

Table

Whattheenterprise's'secondbrain'enables

FromtraditionalpracticestoanAloperatingsystem

Analyticsexplainpastperformanceandinformdecisions

Intelligenceanticipatesoutcomes,surfacesoptions,andrecommendsactions

Periodicmeetingsandreviewsareinformedby

Always-onsensingofperformance,risks,and

historicalandcurrentdata

opportunitiesenablesuserstotestandinterrogate

Insightsinformdecisionsthatareexecutedthroughestablishedhumanreporting

structuresanddigitalworkflows

Insightsareimmediatelytranslatedintodecisionsandcoordinatedhumanandagentexecution

withindefinedguardrails;resultsarefedbackintothesystem

Learningiscapturedthroughreviews,

Continuouslearningfromdecisions,actions,and

experience,andperiodicmodelupdates

outcomesimprovessubsequentrecommendations

Activityandprogressaretracked

Execution,outcomes,andgeneratedvaluearetracked

Insightsanddecisionsaretailoredtoindividualfunctionsandlevels

SharedenterpriseintelligenceconnectsdecisionsfromtheCEOthroughmanagement,thefrontline,andback

NewAlsolutionsarelargelybuiltaroundtherequirementsofeachusecase

Reusablecontext,models,agents,andworkflowsmakeeachnewsolutionfasterandlesscostlytobuild

AtonelargeUSretailer,forexample,districtmanagersalreadyhadextensiveperformancedataand

dashboardsacrossmorethan7,000stores.ThenewAIOScapability,however,synthesizedallthedataintoasinglepersonalizedviewthatdiagnosedlikelycausesofperformancegaps,recommendedactions,andhelpedmanagersprioritizewhichstorestovisit.

TopstrategicprioritiesforbuildingtheAIoperatingsystem

CEOsoftenfacetwotraps.ThefirstisassumingthatAlissopowerfulthatitmakestransformationalmosteffortless.Thesecondisbelievingthatyearsoffoundationaltechnologyworkmusthappenbeforethe

companycancreatevalue.

Inourexperience,bothtrapsareavoidable.CEOscanstartwithafewhigh-valuebusinessproblemsandbuildthetechnologytheyneedastheygo.Theworkiscomplex,buttheydon'tneedalargetechnologyinvestmenttomoveahead;mostcompaniescanworkwithwhattheyhave.

Thekey,however,isthatCEOsandtheirtopteamsneedtobecloselyinvolvedindesigningandbuildingthesystemtoensureitreflectsthebusiness'sstrategicpriorities:

-Protectyouradvantages.Alldecisionsshouldbedrivenbyasimplerule:Ownthecontext;rentorreplacethetechnology.Institutionalknowledgeandexperienceneedtobeportableacrosstechnologiesso

thecompanycanprotectwhatmakesitdistinctive.Therecanbeastrongtemptationtoworkwithaparticularvendortoacceleratedeployment.Butifthatcomesatthecostoflosingcontrolovercoreassetsorbeinglockedintoasingleenvironment,thedangerscanquicklyoutweighthebenefits.

-Limitoperatingsystemsprawl.ThewholepointofanAIOSistoprovideanintegratedviewoftheentirebusiness.IfeachfunctionhasanindependentAIOSoreachusecasehasitsowntechstack,itbecomesdifficulttoprovideanintegratedview.Becausefunctionshavedifferentlevelsoftechnicalmaturityandwillprogressatdifferentrates,leadersshouldaccommodateonetothreeAloperatingsystems.

-ReimagineeveryprocesswithAl.MuchofthefirstwaveofgenerativeAlhasfocusedonimproving

existingactivities.Trueprofit-and-loss(P&L)valuerequirescompaniestoredesignworkflowsendtoend.Thekeyistobeclearaboutthedecisionsthatmatterandwhatcorrespondingdata,insights,andAlsystemsareneededtomakethem.Thehighestvalueoftencomesfromreimaginingworkflowsthatcrossorganizationalboundaries.

Onemanufacturer,forexample,reimaginedsalesandoperationsworkflowstobuildanAIOSthat

automateddemandforecastingandproductionschedulingbasedondemand,inventory,andmachinestatusdata.ItalsocreatedAl-poweredrouting,planning,andpricingcapabilitiesthatreimagined

workflowsacrossboundaries.Theopportunitywasworth$140millionto$180millionayear.

TheAloperatingsystem:AnewwayforCEOstoruntheenterprise7

TheAloperatingsystem:AnewwayforCEOstoruntheenterprise8

-Buildsoyouradvantagegrowsandcompounds.ThevalueofanAIOSincreasesasitexpands.Every

decisionandoutcomethesystemcapturessharpensitsrecommendations.Anincumbentthatstarts

nowcanbuildaleadthatalatemover,evenonerentingthesamemodels,cannoteasilyclose.

Thefoundationofthiscompoundingadvantageisreusingenterprisecontext,agents,models,data

connections,andworkflows,whichrequiresdesigningforreusefromthebeginning.Criticaldata

definitionsandrelationshipsshouldbecodifiedandgovernedtoensureconsistencywhileallowingthesystemtoabsorbnewknowledgeandrelationshipsasitbuildssemanticunderstanding.3Thisapproachhelpsagentsaccesstherelevantsliceofknowledgeforthetaskathandratherthanparsetheentire

enterprisemodel,reducingunnecessarytokenconsumption(Exhibit2).

Thiseffortdoesnotrequireamassivedataexerciseatthestart.Leavethedatawhereitisandbuildrelationshipsontopasteamssolvebusinessproblems,andimprovedataatthesourceovertimeasitcreatesvalue.

Exhibit2

Theenterpriseontologyisbuilttoreuseexistingcomponentsandextendthecapabilityeasily.

Illustrativebusinessproblemandenterpriseontologies(simplified)

Business

Business

Business

Business

problem1

problem2

problem3

problem4

●Newontologycomponentuniquetoeachbusinessproblem●Reusableenterpriseontologycomponent

Eachproductteam

createsnewcomponentsandreusesasliceof

theexistingontology

(includingnodes,edges,hints),whilekeeping

trackofitsslice.

Theenterprisedata

teamturnsnew

ontologycomponents

intoreusableproducts.

McKinsey&Company

-IncorporateAleconomicsintotheoperatingsystem.Whiletokenunitcostshavedeclinedmorethan

95percent,Alspendatmanycompanieshasincreasedmorethanthreetimes.Thechoiceofmodel,thewaytasksarestructured,howmuchreasoningisconsumed,andhowmuchhumansupportisneededallaffecttheoftencomplexneweconomicsofAI.Caseinpoint:Thecheapestintelligencedoesnot

necessarilylowercostsiflowerqualitycreatesexpensivemistakes.

AnAIOSshouldthereforeincorporateAleconomicsintoitsdecision-makingprocesssothatbusinessleadershaveatrueviewintotheP&Ltrade-offsofanydecision.Thosetrade-offswillevolveas

largelanguagemodelsevolve.

SemanticunderstandingistheAloperatingsystem'sabilitytounderstandwhatacompany'sinformationmeansinabusinesscontext.Itisbuiltfromkeysources,includingontologiesandknowledgegraphsthatexplicitlydefineandconnectconcepts;metadata,schemas,and

semanticmodelsthatdescribedataanditsstructure;businessrulesandpolicesthatestablishparametersandconstraints;anddocumentsandinstitutionalknowledgethatprovideadditionalcontext.

TheAloperatingsystem:AnewwayforCEOstoruntheenterprise9

-Buildonthetechnologyyou'vealreadypaidfor.Mostcompaniesalreadypossessplentyofusabledataandplatformstostartmakingprogress.Modernapproachescanworkwithdataacrosssystemswithoutrequiringthecompanytofirstmoveeverythingintoanewenvironment.Thepracticalapproachisto

buildenoughoftheenterprise'ssecondbraintosolvethefirsthigh-valuebusinessproblems,butdesignitsoitcanexpandeasily.

Whentheoldconstraintsfade:Rethinkinghowtomanageacompany

AstheAIOSbreaksdownoldconstraintsonmanagement,managementpracticesthemselvesneedto

change.WhiletheAlfieldissillevolvingquickly,CEOsandtheirtopteamsshouldstarttothinkthroughhowtheyandtheirteamsworkinafewkeyareas.

Managebyintervention,notbycalendar

Mostcompaniessillmanagethroughartificialcalendaring(forexample,quarterlybusinessreviews

andmonthlyperformancemeetings).Thoserhythmsemergedinpartbecausegatheringandanalyzinginformationandaligningondecisionstooktime.

InanAIOSworld,meetingsforsharinginformationandtrackingprogressbecomelessnecessarybecauseinformationiscontinuouslyavailable.CEOsshouldinsteadredesignthemanagementcalendararound

decisionpoints.Thatincludeseliminatingstandingreviewsanddefiningthehandfulofsignals,thresholds,andexceptionsthatshouldtriggerleadershipintervention.

KeyCEOquestions:

-Whattypesofdecisionstrulyneedin-personleadershipfocus?

-WhichdecisionscansafelyandreliablybedelegatedtoAlagents?

AstheAIOSbreaksdownold

constraintsonmanagement,

managementpractices

themselvesneedtochange.

Managecontinuously,notthroughcheckpoints

AnAIOScreatesanalways-onbusinessplan.Assignalscomein,leaderswillinterveneandallocateinrealtime.Analysisanddecisioncycletimescollapse.

Whenthesedynamicstakehold,thebusinesswillneedtosyncthespeedofitscontrolfunctionsand

frontlineoperationswiththatofitsAIOS.CEOswillneedtoidentifyoperationalchokepoints(forexample,last-miledeliveryandmanufacturingproductionissues)anddeterminewhichactionscanunblockthem.

KeyCEOquestions:

-Whatarethemostimportantoperationalchokepointstounblocksothatdecisionscanbeimplementedquickly?

-WhatincentivesandcontrolsareneededtoensurethatimportantdecisionsandactionshappeninsidetheAIOS(andnotinorganicshadowsystems)?

Manageforjudgment,notinformationflow

AsAlagentstakeonmoreexecution-leveltasks,thehumanedgecomesmorefromexercisingjudgmentinvarioussituations.Thatincludesframingdifficultquestions,interpretingambiguity,challenging

assumptions,innovating,andapplyingexpertisewheretheanswerisn'tobvious.

Executiveswillneedtospendlesstimegatheringandtransmittinginformationandmoretimeexercisingjudgment,communicatingintent,coachingpeople,resolvingexceptions,andimprovingperformance.

KeyCEOquestions:

-Howcanthebusinesscreateanalways-onlearningenvironment?

-HowcanthebusinessdevelopandgrowthesetofhumanskillsthatcreatesthemostvaluewithanAIOS?

Managethroughdirectconnections,notlayers

ACEOorbusinessleadercanidentifyanissueandengagedirectlywithsomeoneseverallayersdownto

addressit.TheAIOScangivepeopleclosertocustomersandoperationsamuchrichercontextfortheir

owndecisions,whichhistoricallyhappenedhigherintheorganizationbecauseinformationorexpertisewasscarce.Manylayersintheorganizationarelikelytobecomeunnecessary.

KeyCEOquestions:

-Howdoesadelayered,totallytransparentorganizationmaintainabusinessculture?

-HowdoestheAIOSsupportcoachinganddevelopmentsothatmanagerscanexpandtheirreportinglinesfromtento12peopletodaytoabout20to40?

-HowcanthebusinesscreateenoughtrustintheAIOSsothattheorganizationdoesn'tgravitatebacktore-creatinglayersofapproval?

TheAloperatingsystem:AnewwayforCEOstoruntheenterprise10

HowtwocompaniesbuilttheirAIoperatingsystems

BeforebuildingitsAloperatingsystem(AIOS),

aglobalOEMcommittedtothreekeyprinciples.

Onewastokeepitsenterpriseknowledgeportable.Italignedonopen-standardformatsforits

architectureandontologiessoits“secondbrain”wouldnotbelockedintoproprietarysystems.

Second,itsetouttoreimaginethecompanyaroundAl,notsimplytoimplementAI.Thatcommitment

wasmostvisiblewhenitreimagineditsworkflows.Teamsredesignedtheworkflows,thenbuiltdigitaltwins,ontologies,andsemanticlayerstocodify

therelevantprocesses,policies,relationships,andinstitutionalknowledge.Thatallowedagentsto

understandthebusinesscontext,enablingthemtoexecutetheirtasksaccurately.Thecompanytied

agentperformancetobusinessoutcomesasthe

measureforsuccess.Withoutthattest,itwouldhavebeenimpossibletoknowifthecontexthadbeen

fullycaptured.

Third,thecompanyfocusedonreusabilityandhightrustfromthestart.Itbuiltdataproductsasinputs,codifiedtheknowledgelayer,andproductized

deterministicAl/machinelearning(ML)modelstobroadenthekindofworkAlagentscoulddowithahighdegreeoftrust.

Considerthebill-of-materialssourcingprocess.

Traditionally,ifaproductrequiresaparticular

stainlesssteelfastener,procurementmightlookforthesamecomponentatabetterpricefromanothersupplier.Understandingtheintentofandparametersforusingstainlesssteelscrews(forexample,thermalperformance,corrosionresistance,strength,and

weight),agentscouldinsteadexploreotheroptionswiththedesigner(forexample,galvanizedsteel

orplastic)andalternativesupplierstomeetthoserequirements.

thefinaldecisions.FortheOEM,thesereimaginedandagentifiedprocessesledtosignificantbusinessimpact,includinglowercosts,betterdesigns,and

fastertimetomarket.

OneUS-basedmanufacturerfollowedasimilar

approach.ItgroundeditsAIOSeffortonthreemainfoundations.Thefirstwastoownthecrownjewels-itsdata,models,businessrules,andinstitutional

knowledge.Itdidnotwantablackboxsolutionembeddedwithinavendorplatform.

Itssecondobjectivewastobuildforflexibility.Thatdidn'tmeanstartingfromscratch.Ituseditsexistingtechnologyinvestmentsbutdesignedthesystemsomodelsandothercomponentscouldbeswapped

outorexpandedasthetechnologyevolved.

Thirdwasstandardizinghowtheyworked.A

governance"harness"-asetofintegrationsandconfigurations-wouldprovideconsistentcontrolsandguidelinesacrossusecases.

Tobegin,thecompanyfocuseditseffortson

twodomains:pricingandplanning(financeand

production).Ratherthanrelyingontheprovenbuttime-consumingmanuaefforttobuildtheontologyandsemanticunderstandingcoretotheAIOS,it

usedAltoacceleratetheprocess.

Thatmeantidentifyingkeydecisionsandthe

dataneededtomakethem,extractingrulesand

experiencefromrecords,andcodifyingbusiness

rulesandinstitutionalknowledgethathadoften

livedinspreadsheetsorinemployees'heads.The

companyconnectedabout100internalandexternaldatasources,cleanedandlinkedthem,andcreatedasemanticrepresentationofhowthebusiness

makespricingandplanningdecisions.

Agentsextractintent,informthedesignwith

supportofAl/MLmodels,andrunpartsofthe

request-for-informationprocess,whileanalytical

modelscalculatethecostandimplicationsofthe

alternatives.Humansreviewthoseoptionsandmake

TheinitialphaseoftheAIOSwasupandrunninginabout16weeks.Institutionalknowledgethatoncesatinpocketsoftheorganizationcannowbemadeavailable,consistentlyan

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