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Showing posts with label Usage. Show all posts
Showing posts with label Usage. Show all posts

Tuesday, February 3, 2026

Cisco × OpenAI: When Engineering Systems Meet Intelligent Agents

— A Landmark Case in Enterprise AI Engineering Transformation

In the global enterprise software and networking equipment industry, Cisco has long been regarded as a synonym for engineering discipline, large-scale delivery, and operational reliability. Its portfolio spans networking, communications, security, and cloud infrastructure; its engineering system operates worldwide, with codebases measured in tens of millions of lines. Any major technical decision inevitably triggers cascading effects across the organization.

Yet it was precisely this highly mature engineering system that, around 2024–2025, began to reveal new forms of structural tension.


When Scale Advantages Turn into Complexity Burdens

As network virtualization, cloud-native architectures, security automation, and AI capabilities continued to stack, Cisco’s engineering environment came to exhibit three defining characteristics:

  • Multi-repository, strongly coupled, long-chain software architectures;
  • A heterogeneous technology stack spanning C/C++ and multiple generations of UI frameworks;
  • Stringent security, compliance, and audit requirements deeply embedded into the development lifecycle.

Against this backdrop, engineering efficiency challenges became increasingly visible.
Build times lengthened, defect remediation cycles grew unpredictable, and cross-repository dependency analysis relied heavily on the tacit knowledge of senior engineers. Scale was no longer a pure advantage; it gradually became a constraint on response speed and organizational agility.

What management faced was not the question of whether to “adopt AI,” but a far more difficult decision:

When engineering complexity exceeds the cognitive limits of individuals and processes, can an organization still sustain its existing productivity curve?


Problem Recognition and Internal Reflection: Tool Upgrades Are Not Enough

At this stage, Cisco did not rush to introduce new “efficiency tools.” Through internal engineering assessments and external consulting perspectives—closely aligned with views from Gartner, BCG, and others on engineering intelligence—a shared understanding began to crystallize:

  • The core issue was not code generation, but the absence of engineering reasoning capability;
  • Information was not missing, but fragmented across logs, repositories, CI/CD pipelines, and engineer experience;
  • Decision bottlenecks were concentrated in the understand–judge–execute chain, rather than at any single operational step.

Traditional IDE plugins or code-completion tools could, at best, reduce localized friction. They could not address the cognitive load inherent in large-scale engineering systems.
The engineering organization itself had begun to require a new form of “collaborative actor.”


The Inflection Point: From AI Tools to AI Engineering Agents

The true turning point emerged with the launch of deep collaboration between Cisco and OpenAI.

Cisco did not position OpenAI’s Codex as a mere “developer assistance tool.” Instead, it was treated as an AI agent capable of being embedded directly into the engineering lifecycle. This positioning fundamentally shaped the subsequent path:

  • Codex was deployed directly into real, production-grade engineering environments;
  • It executed closed-loop workflows—compile → test → fix—at the CLI level;
  • It operated within existing security, review, and compliance frameworks, rather than bypassing governance.

AI was no longer just an adviser. It began to assume an engineering role that was executable, verifiable, and auditable.


Organizational Intelligent Reconfiguration: A Shift in Engineering Collaboration

As Codex took root across multiple core engineering scenarios, its impact extended well beyond efficiency metrics and began to reshape organizational collaboration:

  • Departmental coordination → shared engineering knowledge mechanisms
    Through cross-repository analysis spanning more than 15 repositories, Codex made previously dispersed tacit knowledge explicit.

  • Data reuse → intelligent workflow formation
    Build logs, test results, and remediation strategies were integrated into continuous reasoning chains, reducing repetitive judgment.

  • Decision-making patterns → model-based consensus mechanisms
    Engineers shifted from relying on individual experience to evaluating explainable model-driven reasoning outcomes.

At its core, this evolution marked a transition from an experience-intensive engineering organization to one that was cognitively augmented.


Performance and Quantified Outcomes: Efficiency as a Surface Result

Within Cisco’s real production environments, results quickly became tangible:

  • Build optimization:
    Cross-repository dependency analysis reduced build times by approximately 20%, saving over 1,500 engineering hours per month across global teams.

  • Defect remediation:
    With Codex-CLI’s automated execution and feedback loops, defect remediation throughput increased by 10–15×, compressing cycles from weeks to hours.

  • Framework migration:
    High-repetition tasks such as UI framework upgrades were systematically automated, allowing engineers to focus on architecture and validation.

More importantly, management observed the emergence of a cognitive dividend:
Engineering teams developed a faster and deeper understanding of complex systems, significantly enhancing organizational resilience under uncertainty.


Governance and Reflection: Intelligent Agents Are Not “Runaway Automation”

Notably, the Cisco–OpenAI practice did not sidestep governance concerns:

  • AI agents operated within established security and review frameworks;
  • All execution paths were traceable and auditable;
  • Model evolution and organizational learning formed a closed feedback loop.

This established a clear logic chain:
Technology evolution → organizational learning → governance maturity.
Intelligent agents did not weaken control; they redefined it at a higher level.


Overview of Enterprise Software Engineering AI Applications

Application ScenarioAI CapabilitiesPractical ImpactQuantified OutcomeStrategic Significance
Build dependency analysisCode reasoning + semantic analysisShorter build times-20%Faster engineering response
Defect remediationAgent execution + automated feedbackCompressed repair cycles10–15× throughputReduced systemic risk
Framework migrationAutomated change executionLess manual repetitionWeeks → daysUnlocks high-value engineering capacity

The True Watershed of Engineering Intelligence

The Cisco × OpenAI case is not fundamentally about whether to adopt generative AI. It addresses a more essential question:

When AI can reason, execute, and self-correct, is an enterprise prepared to treat it as part of its organizational capability?

This practice demonstrates that genuine intelligent transformation is not about tool accumulation. It is about converting AI capabilities into reusable, governable, and assetized organizational cognitive structures.
This holds true for engineering systems—and, increasingly, for enterprise intelligence at large.

For organizations seeking to remain competitive in the AI era, this is a case well worth sustained study.

Related topic:


Sunday, January 11, 2026

Intelligent Evolution of Individuals and Organizations: How Harvey Is Bringing AI Productivity to Ground in the Legal Industry

Over the past two years, discussions around generative AI have often focused on model capability improvements. Yet the real force reshaping individuals and organizations comes from products that embed AI deeply into professional workflows. Harvey is one of the most representative examples of this trend.

As an AI startup dedicated to legal workflows, Harvey reached a valuation of 8 billion USD in 2025. Behind this figure lies not only capital market enthusiasm, but also a profound shift in how AI is reshaping individual career development, professional division of labor, and organizational modes of production.

This article takes Harvey as a case study to distill the underlying lessons of intelligent productivity, offering practical reference to individuals and organizations seeking to leverage AI to enhance capabilities and drive organizational transformation.


The Rise of Vertical AI: From “Tool” to “Operating System”

Harvey’s rapid growth sends a very clear signal.

  • Total financing in the year: 760 million USD

  • Latest round: 160 million USD, led by a16z

  • Annual recurring revenue (ARR): 150 million USD, doubling year-on-year

  • User adoption: used by around 50% of Am Law 100 firms in the United States

These numbers are more than just signs of investor enthusiasm; they indicate that vertical AI is beginning to create structural value in real industries.

The evolution of generative AI roughly经历了三个阶段:

  • Phase 1: Public demonstrations of general-purpose model capabilities

  • Phase 2: AI-driven workflow redesign for specific professional scenarios

  • Phase 3 (where Harvey now operates): becoming an industry operating system for work

In other words, Harvey is not simply a “legal GPT”. It is a complete production system that combines:

Model capabilities + compliance and governance + workflow orchestration + secure data environments

For individual careers and organizational structures, this marks a fundamentally new kind of signal:

AI is no longer just an assistive tool; it is a powerful engine for restructuring professional division of labor.


How AI Elevates Professionals: From “Tool Users” to “Designers of Automated Workchains”

Harvey’s stance is explicit: “AI will not replace lawyers; it replaces the heavy lifting in their work.”
The point here is not comfort messaging, but a genuine shift in the logic of work division.

A lawyer’s workchain is highly structured:
Research → Reading → Reasoning → Drafting → Reviewing → Delivering → Client communication

With AI in the loop, 60–80% of this chain can be standardized, automated, and reused at scale.

How It Enhances Individual Professional Capability

  1. Task Completion Speed Increases Dramatically
    Time-consuming tasks such as drafting documents, compliance reviews, and case law research are handled by AI, freeing lawyers to focus on strategy, litigation preparation, and client relations.

  2. Cognitive Boundaries Are Expanded
    AI functions like an “infinitely extendable external brain”, enabling professionals to construct deeper and broader understanding frameworks in far less time.

  3. Capability Becomes More Transferable Across Domains
    Unlike traditional division of labor, where experience is locked in specific roles or firms, AI-driven workflows help individuals codify methods and patterns, making it easier to transfer and scale their expertise across domains and scenarios.

In this sense, the most valuable professionals of the future are not just those who “possess knowledge”, but those who master AI-powered workflows.


Organizational Intelligent Evolution: From Process Optimization to Production Model Transformation

Harvey’s emergence marks the first production-model-level transformation in the legal sector in roughly three decades.
The lessons here extend far beyond law and are highly relevant for all types of organizations.

1. AI Is Not Just About Efficiency — It Redesigns How People Collaborate

Harvey’s new product — a shared virtual legal workspace — enables in-house teams and law firms to collaborate securely, with encrypted isolation preventing leakage of sensitive data.

At its core, this represents a new kind of organizational design:

  • Work is no longer constrained by physical location

  • Information flows are no longer dependent on manual handoffs

  • Legal opinions, contracts, and case law become reusable, orchestratable building blocks

  • Collaboration becomes a real-time, cross-team, cross-organization network

These shifts imply a redefinition of organizational boundaries and collaboration patterns.

2. AI Is Turning “Unstructured Problems” in Complex Industries Into Structured Ones

The legal profession has long been seen as highly dependent on expertise and judgment, and therefore difficult to standardize. Harvey demonstrates that:

  • Data can be structured

  • Reasoning chains can be modeled

  • Documents can be generated and validated automatically

  • Risk and compliance can be monitored in real time by systems

Complex industries are not “immune” to AI transformation — they simply require AI product teams that truly understand the domain.

The same pattern will quickly replicate in consulting, investment research, healthcare, insurance, audit, tax, and beyond.

3. Organizations Will Shift From “Labor-Intensive” to “Intelligence-Intensive”

In an AI-driven environment, the ceiling of organizational capability will depend less on how many people are hired, and more on:

  • How many workflows are genuinely AI-automated

  • Whether data can be understood by models and turned into executable outputs

  • Whether each person can leverage AI to take on more decision-making and creative tasks

In short, organizational competitiveness will increasingly hinge on the depth and breadth of intelligentization, rather than headcount.


The True Value of Vertical AI SaaS: From Wrapping Models to Encapsulating Industry Knowledge

Harvey’s moat does not come from having “a better model”. Its defensibility rests on three dimensions:

1. Deep Workflow Integration

From case research to contract review, Harvey is embedded end-to-end in legal workflows.
This is not “automating isolated tasks”, but connecting the entire chain.

2. Compliance by Design

Security isolation, access control, compliance logs, and full traceability are built into the product.
In legal work, these are not optional extras — they are core features.

3. Accumulation and Transfer of Structured Industry Knowledge

Harvey is not merely a frontend wrapper around GPT. It has built:

  • A legal knowledge graph

  • Large-scale embeddings of case law

  • Structured document templates

  • A domain-specific workflow orchestration engine

This means its competitive moat lies in long-term accumulation of structured industry assets, not in any single model.

Such a product cannot be easily replaced by simply swapping in another foundation model. This is precisely why top-tier investors are willing to back Harvey at such a scale.


Lessons for Individuals, Organizations, and Industries: AI as a New Platform for Capability

Harvey’s story offers three key takeaways for broader industries and for individual growth.


Insight 1: The Core Competency of Professionals Is Shifting From “Owning Knowledge” to “Owning Intelligent Productivity”

In the next 3–5 years, the rarest and most valuable talent across industries will be those who can:

Harness AI, design AI-powered workflows, and use AI to amplify their impact.

Every professional should be asking:

  • Can I let AI participate in 50–70% of my daily work?

  • Can I structure my experience and methods, then extend them via AI?

  • Can I become a compounding node for AI adoption in my organization?

Mastering AI is no longer a mere technical skill; it is a career leverage point.


Insight 2: Organizational Intelligentization Depends Less on the Model, and More on Whether Core Workflows Can Be Rebuilt

The central question every organization must confront is:

Do our core workflows already provide the structural space needed for AI to create value?

To reach that point, organizations need to build:

  • Data structures that can be understood and acted upon by models

  • Business processes that can be orchestrated rather than hard-coded

  • Decision chains where AI can participate as an agent rather than as a passive tool

  • Automated systems for risk and compliance monitoring

The organizations that ultimately win will be those that can design robust human–AI collaboration chains.


Insight 3: The Vertical AI Era Has Begun — Winners Will Be Those Who Understand Their Industry in Depth

Harvey’s success is not primarily about technology. It is about:

  • Deep understanding of the legal domain

  • Deep integration into real legal workflows

  • Structural reengineering of processes

  • Gradual evolution into industry infrastructure

This is likely to be the dominant entrepreneurial pattern over the next decade.

Whether the arena is law, climate, ESG, finance, audit, supply chain, or manufacturing, new “operating systems for industries” will continue to emerge.


Conclusion: AI Is Not Replacement, but Extension; Not Assistance, but Reinvention

Harvey points to a clear trajectory:

AI does not primarily eliminate roles; it upgrades them.
It does not merely improve efficiency; it reshapes production models.
It does not only optimize processes; it rebuilds organizational capabilities.

For individuals, AI is a new amplifier of personal capability.
For organizations, AI is a new operating system for work.
For industries, AI is becoming new infrastructure.

The era of vertical AI has genuinely begun.
The real opportunities belong to those willing to redefine how work is done and to actively build intelligent organizational capabilities around AI.

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Saturday, November 15, 2025

NBIM’s Intelligent Transformation: From Data Density to Cognitive Asset Management

In 2020, Norges Bank Investment Management (NBIM) stood at an unprecedented inflection point. As the world’s largest sovereign wealth fund, managing over USD 1.5 trillion across more than 70 countries, NBIM faced mounting challenges from climate risks, geopolitical uncertainty, and an explosion of regulatory information.

Its traditional research models—once grounded in financial statements, macroeconomic indicators, and quantitative signals—were no longer sufficient to capture the nuances of market sentiment, supply chain vulnerabilities, and policy volatility. Within just three years, the volume of ESG-related data tripled, while analysts were spending more than 30 hours per week on manual filtering and classification.

Recognizing the Crisis: Judgment Lag in the Data Deluge

At an internal strategy session in early 2021, NBIM’s leadership openly acknowledged a growing “data response lag”: the organization had become rich in information but poor in actionable insight.
In a seminal internal report titled “Decision Latency in ESG Analysis,” the team quantified this problem: the average time from the emergence of new information to its integration into investment decisions was 26 days.
This lag undermined the fund’s agility, contributing to three consecutive years (2019–2021) of below-benchmark ESG returns.
The issue was clearly defined as a structural deficiency in information-processing efficiency, which had become the ceiling of organizational cognition.

The Turning Point: When AI Became a Necessity

In 2021, NBIM established a cross-departmental Data Intelligence Task Force—bringing together investment research, IT architecture, and risk management experts.
The initial goal was not full-scale AI adoption but rather to test its feasibility in focused domains. The first pilot centered on ESG data extraction and text analytics.

Leveraging Transformer-based natural language processing models, the team applied semantic parsing to corporate reports, policy documents, and media coverage.
Instead of merely extracting keywords, the AI established conceptual relationships—for instance, linking “supply chain emission risks” with “upstream metal price fluctuations.”

In a pilot within the energy sector, the system autonomously identified over 1,300 non-financial risk signals, about 7% of which were later confirmed as materially price-moving events within three months.
This marked NBIM’s first experience of predictive insight generated by AI.

Organizational Reconstruction: From Analysis to Collaboration

The introduction of AI catalyzed a systemic shift in NBIM’s internal workflows.
Previously, researchers, risk controllers, and portfolio managers operated in siloed systems, fragmenting analytical continuity.
Under the new framework, NBIM integrated AI outputs into a unified knowledge graph system—internally codenamed the “Insight Engine”—so that all analytical processes could operate on a shared semantic foundation.

This architecture allowed AI-generated risk signals, policy trends, and corporate behavior patterns to be shared, validated, and reused as structured knowledge.
A typical case: when the risk team detected frequent AI alerts indicating a high probability of environmental violations by a chemical company, the research division traced the signal back to a clause in a pending European Parliament bill. Two weeks later, the company appeared on a regulatory watchlist.
AI did not provide conclusions—it offered cross-departmental, verifiable chains of evidence.
NBIM’s internal documentation described this as a “Decision Traceability Framework.”

Outcomes: The Cognitive Transformation of Investment

By 2024, NBIM had embedded AI capabilities across multiple functions—pre-investment research, risk assessment, portfolio optimization, and ESG auditing.
Quantitatively, research and analysis cycles shortened by roughly 38%, while the lag between internal ESG assessments and external market events fell to under 72 hours.

More significantly, AI reshaped NBIM’s understanding of knowledge reuse.
Analytical components generated by AI models were incorporated into the firm’s knowledge management system, continuously refined through feedback loops to form a dynamic learning corpus.
According to NBIM’s annual report, this system contributed approximately 2.3% in average excess returns while significantly reducing redundant analytical costs.
Beneath these figures lies a deeper truth: AI had become integral to NBIM’s cognitive architecture—not just a computational tool.

Reflection and Insights: Governance in the Age of Intelligent Finance

In its Annual Responsible Investment Report, NBIM described the AI transformation as a “governance experiment.”
AI models, they noted, could both amplify existing biases and uncover hidden correlations in high-dimensional data.
To manage this duality, NBIM established an independent Model Ethics Committee tasked with evaluating algorithmic transparency, bias impacts, and publishing periodic audit reports.

NBIM’s experience demonstrates that in the era of intelligent finance, algorithmic competitiveness derives not from sheer performance but from transparent governance.

Application Scenario AI Capabilities Used Practical Utility Quantitative Impact Strategic Significance
Natural Language Data Query (Snowflake) NLP + Semantic Search Enables investment managers to query data in natural language Saves 213,000 work hours annually; 20% productivity gain Breaks technical barriers; democratizes data access
Earnings Call Analysis Text Comprehension + Sentiment Detection Extracts key insights to support risk judgment Triples analytical coverage Strengthens intelligent risk assessment
Multilingual News Monitoring Multilingual NLP + Sentiment Analysis Monitors news in 16 languages and delivers insights within minutes Reduces processing time from 5 days to 5 minutes Enhances global information sensitivity
Investment Simulator & Behavioral Bias Detection Pattern Recognition + Behavioral Modeling Identifies human decision biases and optimizes returns 95% accuracy in bias detection Positions AI as a “cognitive partner”
Executive Compensation Voting Advisory Document Analysis + Policy Alignment Generates voting recommendations consistent with ESG policies 95% accuracy; thousands of labor hours saved Reinforces ESG governance consistency
Trade Optimization Predictive Modeling + Parameter Tuning Optimizes 49 million transactions annually Saves approx. USD 100 million per year Synchronizes efficiency and profitability

Conclusion

NBIM’s transformation was not a technological revolution but an evolution of organizational intelligence.


It began with the anxiety of information overload and evolved into a decision ecosystem driven by data, guided by models, and validated by cross-functional consensus.
As AI becomes the foundation of asset management cognition, NBIM exemplifies a new paradigm:

Financial institutions will no longer compete on speed alone, but on the evolution of their cognitive structures.

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Monday, October 13, 2025

From System Records to Agent Records: Workday’s Enterprise AI Transformation Paradigm—A Future of Human–Digital Agent Coexistence

Based on a McKinsey Inside the Strategy Room interview with Workday CEO Carl Eschenbach (August 21, 2025), combined with Workday official materials and third-party analyses, this study focuses on enterprise transformation driven by agentic AI. Workday’s practical experience in human–machine collaborative intelligence offers valuable insights.

In enterprise AI transformation, two extremes must be avoided: first, treating AI as a “universal cost-cutting tool,” falling into the illusion of replacing everything while neglecting business quality, risk, and experience; second, refusing to experiment due to uncertainty, thereby missing opportunities to elevate efficiency and value.

The proper approach positions AI as a “productivity-enhancing digital colleague” under a governance and measurement framework, aiming for measurable productivity gains and new value creation. By starting with small pilots and iterative scaling, cost reduction, efficiency enhancement, and innovation can be progressively unified.

Overview

Workday’s AI strategy follows a “human–agent coexistence” paradigm. Using consistent data from HR and finance systems of record (SOR) and underpinned by governance, the company introduces an “Agent System of Record (ASR)” to centrally manage agent registration, permissions, costs, and performance—enabling a productivity leap from tool to role-based agent.

Key Principles and Concepts

  1. Coexistence, Not Replacement: AI’s power comes from being “agentic”—technology working for you. Workday clearly positions AI for peaceful human–agent coexistence.

  2. Domain Data and Business Context Define the Ceiling: The CEO emphasizes that data quality and domain context, especially in HR and finance, are foundational. Workday serves over 10,000 enterprises, accumulating structured processes and data assets across clients.

  3. Three-System Perspective: HR, finance, and customer SORs form the enterprise AI foundation. Workday focuses on the first two and collaborates with the broader ecosystem (e.g., Salesforce).

  4. Speed and Culture as Multipliers: Treating “speed” as a strategic asset and cultivating a growth-oriented culture through service-oriented leadership that “enables others.”


Practice and Governance (Workday Approach)

  • ASR Platform Governance: Unified directories and observability for centralized control of in-house and third-party agents; role and permission management, registration and compliance tracking, cost budgeting and ROI monitoring, real-time activity and strategy execution, and agent orchestration/interconnection via A2A/MCP protocols (Agent Gateway). Digital colleagues in HaxiTAG Bot Factory provide similar functional benefits in enterprise scenarios.

  • Role-Based (Multi-Skill) Agents: Upgrade from task-based to configurable “role” agents, covering high-value processes such as recruiting, talent mobility, payroll, contracts, financial audit, and policy compliance.

  • Responsible AI System: Appoint a Chief Responsible AI Officer and employ ISO/IEC 42001 and NIST AI RMF for independent validation and verification, forming a governance loop for bias, security, explainability, and appeals.

  • Organizational Enablement: Systematic AI training for 20,000+ employees to drive full human–agent collaboration.

Value Proposition and Business Implications

  • From “Application-Centric” to “Role-Agent-Centric” Experience: Users no longer “click apps” but collaborate with context-aware role agents, requiring rethinking of traditional UI and workflow orchestration.

  • Measurable Digital Workforce TCO/ROI: ASR treats agents as “digital employees,” integrating budget, cost, performance, and compliance into a single ledger, facilitating CFO/CHRO/CAIO governance and investment decisions.

  • Ecosystem and Interoperability: Agent Gateway connects external agents (partners or client-built), mitigating “agent sprawl” and shadow IT risks.

Methodology: A Reusable Enterprise Deployment Framework

  1. Objective Function: Maximize productivity, minimize compliance/risk, and enhance employee experience; define clear boundaries for tasks agents can independently perform.

  2. Priority Scenarios: Select high-frequency, highly regulated, and clean-data HR/finance processes (e.g., payroll verification, policy responses, compliance audits, contract obligation extraction) as MVPs.

  3. ASR Capability Blueprint:

    • Directory: Agent registration, profiles (skills/capabilities), tracking, explainability;

    • Identity & Permissions: Least privilege, cross-system data access control;

    • Policy & Compliance: Policy engine, action audits, appeals, accountability;

    • Economics: Budgeting, A/B and performance dashboards, task/time/result accounting;

    • Connectivity: Agent Gateway, A2A/MCP protocol orchestration.

  4. “Onboard Agents Like Humans”: Implement lifecycle management and RACI assignment for “hire–trial–performance–promotion–offboarding” to prevent over-authorization or improper execution.

  5. Responsible AI Governance: Align with ISO 42001 and NIST AI RMF; establish processes and metrics (risk registry, bias testing, explainability thresholds, red teaming, SLA for appeals), and regularly disclose internally and externally.

  6. Organization and Culture: Embed “speed” in OKRs/performance metrics, emphasize leadership in “serving others/enabling teams,” and establish CAIO/RAI committees with frontline coaching mechanisms.

Industry Insight: Instead of full-scale rollout, adopt a four-piece “role–permission–metric–governance” loop, gradually delegating authority to create explainable autonomy.

Assessment and Commentary

Workday unifies humans and agents within existing HR/finance SORs and governance, balancing compliance with practical deployment density, shortening the path from pilot to scale. Constraints and risks include:

  1. Ecosystem Lock-In: ASR strongly binds to Workday data and processes; open protocols and Marketplace can mitigate this.

  2. Cross-System Consistency: Agents spanning ERP/CRM/security domains require end-to-end permission and audit linkage to avoid “shadow agents.”

  3. Measurement Complexity: Agent value must be assessed by both process and outcome (time saved ≠ business result).

Sources: McKinsey interview with Workday CEO on “coexistence, data quality, three-system perspective, speed and leadership, RAI and training”; Workday official pages/news on ASR, Agent Gateway, role agents, ROI, and Responsible AI; HFS, Josh Bersin, and other industry analyses on “agent sprawl/governance.”

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Friday, September 19, 2025

AI-Driven Transformation at P&G: Strategic Integration Across Operations and Innovation

As a global leader in the consumer goods industry, Procter & Gamble (P&G) deeply understands that technological innovation is central to delivering sustained consumer value. In recent years, P&G has strategically integrated Artificial Intelligence (AI) and Generative AI (Gen AI) into its operational and innovation ecosystems, forming a company-wide AI strategy. This strategy is consumer-centric, efficiency-driven, and aims to transform the organization, processes, and culture at scale.

Strategic Vision: Consumer Delight as the Sole Objective

P&G Chairman and CEO Jon Moeller emphasizes that AI should serve the singular goal of generating delight for consumers, customers, employees, society, and shareholders—not technology for its own sake. Only technologies that accelerate and enhance this objective are worth adopting. This orientation ensures that all AI projects are tightly aligned with business outcomes, avoiding fragmented or siloed deployments.

Infrastructure: Building a Scalable Enterprise AI Factory

CIO Vittorio Cretella describes P&G’s internal generative AI tool, ChatPG (built on OpenAI API), which supports over 35 enterprise-wide use cases. Through its “AI Factory,” deployment efficiency has increased tenfold. This platform enables standardized deployment and iteration of AI models across regions and functions , embedding AI capabilities as strategic infrastructure in daily operations.

Core Use Cases

1. Supply Chain Forecasting and Optimization

In collaboration with phData and KNIME, P&G integrates complex and fragmented supply chain data (spanning 5,000+ products and 22,000 components) into a unified platform. This enables real-time risk prediction, inventory optimization, and demand forecasting. A manual verification process once involving over a dozen experts has been eliminated, cutting response times from two hours to near-instantaneous.

2. Consumer Behavior Insights and Product Development

Smart products like the Oral-B iO electric toothbrush collect actual usage data, which AI models use to uncover behavioral discrepancies (e.g., real brushing time averaging 47 seconds versus the reported two minutes). These insights inform R&D and formulation innovation, significantly improving product design and user experience.

3. Marketing and Media Content Testing

Generative AI enables rapid creative ideation and execution. Large-scale A/B testing shortens concept validation cycles from months to days, reducing costs. AI also automates media placement and audience segmentation, enhancing both precision and efficiency.

4. Intelligent Manufacturing and Real-Time Quality Control

Sensors and computer vision systems deployed across P&G facilities enable automated quality inspection and real-time alerts. This supports “hands-free” night shift production with zero manual supervision, reducing defects and ensuring consistent product quality.

Collective Intelligence: AI as a Teammate

Between May and July 2024, P&G collaborated with Harvard Business School’s Digital Data Design Institute and Wharton School to conduct a Gen AI experiment involving over 700 employees. Key findings include:

  • Teams using Gen AI improved efficiency by ~12%;

  • Individual AI users matched or outperformed full teams without AI;

  • AI facilitated cross-functional integration and balanced solutions;

  • Participants reported enhanced collaboration and positive engagement .

These results reinforce Professor Karim Lakhani’s “Cybernetic Teammate” concept, where AI transitions from tool to teammate.

Organizational Transformation: Talent and Cultural Integration

P&G promotes AI adoption beyond tools—embedding it into organizational culture. This includes mandatory training, signed AI use policies, and executive-level hands-on involvement. CIO Seth Cohen articulates a “30% technology, 70% organization” transformation formula, underscoring the primacy of culture and talent in sustainable change.

Sustaining Competitive AI Advantage

P&G’s AI strategy is defined by its system-level design, intentionality, scalability, and long-term sustainability. Through:

  • Consumer-centric value orientation,

  • Standardized, scalable AI infrastructure,

  • End-to-end coverage from supply chain to marketing,

  • Collaborative innovation between AI and employees,

  • Organizational and cultural transformation,

P&G establishes a self-reinforcing loop of AI → Efficiency → Innovation. AI is no longer a technical pursuit—it is a foundational pillar of enduring corporate competitiveness.

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Tuesday, September 9, 2025

Morgan Stanley’s DevGen.AI: Reshaping Enterprise Legacy System Modernization Through Generative AI

As enterprises increasingly grapple with the pressing challenge of modernizing legacy software systems, Morgan Stanley has unveiled DevGen.AI—an internally developed generative AI tool that sets a new benchmark for enterprise-grade modernization strategies. Built upon OpenAI’s GPT models, DevGen.AI is designed to tackle the long-standing issue of outdated systems—particularly those written in languages like COBOL—that are difficult to maintain, adapt, or scale within financial institutions.

The Innovation: A Semantic Intermediate Layer

DevGen.AI’s most distinctive innovation lies in its use of an “intermediate language” approach. Rather than directly converting legacy code into modern programming languages, it first translates source code into structured, human-readable English specifications. Developers can then use these specs to rewrite the system in modern languages. This human-in-the-loop paradigm—AI-assisted specification generation followed by manual code reconstruction—offers superior adaptability and contextual accuracy for the modernization of complex, deeply embedded enterprise systems.

By 2025, DevGen.AI has analyzed over 9 million lines of legacy code, saving developers more than 280,000 working hours. This not only reduces reliance on scarce COBOL expertise but also provides a structured pathway for large-scale software asset refactoring across the firm.

Application Scenarios and Business Value at Morgan Stanley

DevGen.AI has been deployed across three core domains:

1. Code Modernization & Migration

DevGen.AI accelerates the transformation of decades-old mainframe systems by translating legacy code into standardized technical documentation. This enables faster and more accurate refactoring into modern languages such as Java or Python, significantly shortening technology upgrade cycles.

2. Compliance & Audit Support

Operating in a heavily regulated environment, financial institutions must maintain rigorous transparency. DevGen.AI facilitates code traceability by extracting and describing code fragments tied to specific business logic, helping streamline both internal audits and external regulatory responses.

3. Assisted Code Generation

While its generated modern code is not yet fully optimized for production-scale complexity, DevGen.AI can autonomously convert small to mid-sized modules. This provides substantial savings on initial development efforts and lowers the barrier to entry for modernization.

A key reason for Morgan Stanley’s choice to build a proprietary AI tool is the ability to fine-tune models based on domain-specific semantics and proprietary codebases. This avoids the semantic drift and context misalignment often seen with general-purpose LLMs in enterprise environments.

Strategic Insights from an AI Engineering Milestone

DevGen.AI exemplifies a systemic response to technical debt in the AI era, offering a replicable roadmap for large enterprises. Beyond showcasing generative AI’s real-world potential in complex engineering tasks, the project highlights three transformative industry trends:

1. Legacy System Integration Is the Gateway to Industrial AI Adoption

Enterprise transformation efforts are often constrained by the inertia of legacy infrastructure. DevGen.AI demonstrates that AI can move beyond chatbot interfaces or isolated coding tasks, embedding itself at the heart of IT infrastructure transformation.

2. Semantic Intermediation Is Critical for Quality and Control

By shifting the translation paradigm from “code-to-code” to “code-to-spec,” DevGen.AI introduces a bilingual collaboration model between AI and humans. This not only enhances output fidelity but also significantly improves developer control, comprehension, and confidence.

3. Organizational Modernization Amplifies AI ROI

Mike Pizzi, Morgan Stanley’s Head of Technology, notes that AI amplifies existing capabilities—it is not a substitute for foundational architecture. Therefore, the success of AI initiatives hinges not on the models themselves, but on the presence of a standardized, modular, and scalable technical infrastructure.

From Intelligent Tools to Intelligent Architecture

DevGen.AI proves that the core enterprise advantage in the AI era lies not in whether AI is adopted, but in how AI is integrated into the technology evolution lifecycle. AI is no longer a peripheral assistant; it is becoming the central engine powering IT transformation.

Through DevGen.AI, Morgan Stanley has not only addressed legacy technical debt but has also pioneered a scalable, replicable, and sustainable modernization framework. This breakthrough sets a precedent for AI-driven transformation in highly regulated, high-complexity industries such as finance. Ultimately, the value of enterprise AI does not reside in model size or novelty—but in its strategic ability to drive structural modernization.

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Tuesday, August 19, 2025

Internal AI Adoption in Enterprises: In-Depth Insights, Challenges, and Strategic Pathways

In today’s AI-driven enterprise service landscape, the implementation and scaling of internal AI applications have become key indicators of digital transformation success. The ICONIQ 2025 State of AI report provides valuable insights into the current state, emerging challenges, and future directions of enterprise AI adoption. This article draws upon the report’s key findings and integrates them with practical perspectives on enterprise service culture to deliver a professional analysis of AI deployment breadth, user engagement, value realization, and evolving investment structures, along with actionable strategic recommendations.

High AI Penetration, Yet Divergent User Engagement

According to the report, while up to 70% of employees have access to internal AI tools, only around half are active users. This discrepancy reveals a widespread challenge: despite significant investments in AI deployment, employee engagement often falls short, particularly in large, complex organizations. The gap between "tool availability" and "tool utilization" reflects the interplay of multiple structural and cultural barriers.

Key among these is organizational inertia. Long-established workflows and habits are not easily disrupted. Without strong guidance, training, and incentive systems, employees may revert to legacy practices, leaving AI tools underutilized. Secondly, disparities in employee skill sets hinder AI adoption. Not all employees possess the aptitude or willingness to learn and adapt to new technologies, and perceived complexity can lead to avoidance. Third, lagging business process reengineering limits AI’s impact. The introduction of AI must be accompanied by streamlined workflows; otherwise, the technology remains disconnected from business value chains.

In large enterprises, AI adoption faces additional challenges, including the absence of a unified AI strategy, departmental silos, and concerns around data security and regulatory compliance. Furthermore, employee anxiety over job displacement may create resistance. Research shows that insufficient collective buy-in or vague implementation directives often lead to failed AI initiatives. Uncoordinated tool usage may also result in fragmented knowledge retention, security risks, and misalignment with strategic goals. Addressing these issues requires systemic transformation across technology, processes, organizational structure, and culture to ensure that AI tools are not just “accessible,” but “habitual and valuable.”

Scenario Depth and Productivity Gains Among High-Adoption Enterprises

The report indicates that enterprises with high AI adoption deploy an average of seven or more internal AI use cases, with coding assistants (77%), content generation (65%), and document retrieval (57%) being the most common. These findings validate AI’s broad applicability and emphasize that scenario depth and diversity are critical to unlocking its full potential. By embedding AI into core functions such as R&D, operations, and marketing, leading enterprises report productivity gains ranging from 15% to 30%.

Scenario-specific tools deliver measurable impact. Coding assistants enhance development speed and code quality; content generation automates scalable, personalized marketing and internal communications; and document retrieval systems reduce the cost of information access through semantic search and knowledge graph integration. These solutions go beyond tool substitution — they optimize workflows and free employees to focus on higher-value, creative tasks.

The true productivity dividend lies in system integration and process reengineering. High-adoption enterprises treat AI not as isolated pilots but as strategic drivers of end-to-end automation. Integrating content generators with marketing automation platforms or linking document search systems with CRM databases exemplifies how AI can augment user experience and drive cross-functional value. These organizations also invest in data governance and model optimization, ensuring that high-quality data fuels reliable, context-aware AI models.


Evolving AI R&D Investment Structures

The report highlights that AI-related R&D now comprises 10%–20% of enterprise R&D budgets, with continued growth across revenue segments — signaling strong strategic prioritization. Notably, AI investment structures are dynamically shifting, necessitating foresight and flexibility in resource planning.

In the early stages, talent represents the largest cost. Enterprises compete for AI/ML engineers, data scientists, and AI product managers who can bridge technical expertise with business understanding. Talent-intensive innovation is critical when AI technologies are still nascent. Competitive compensation, career development pathways, and open innovation cultures are essential for attracting and retaining such talent.

As AI matures, cost structures tilt toward cloud computing, inference operations, and governance. Once deployed, AI systems require substantial compute resources, particularly for high-volume, real-time workloads. Model inference, data transmission, and infrastructure scalability become cost drivers. Simultaneously, AI governance—covering privacy, fairness, explainability, and regulatory compliance—emerges as a strategic imperative. Establishing AI ethics committees, audit frameworks, and governance platforms becomes essential to long-term scalability and risk mitigation.

Thus, enterprises must shift from a narrow R&D lens to a holistic investment model, balancing technical innovation with operational sustainability. Cloud cost optimization, model efficiency improvements (e.g., pruning, quantization), and robust data governance are no longer optional—they are competitive necessities.

Strategic Recommendations

1. Scenario-Driven Co-Creation: The Core of AI Value Realization

AI’s business value lies in transforming core processes, not simply introducing new technologies. Enterprises should anchor AI initiatives in real business scenarios and foster cross-functional co-creation between business leaders and technologists.

Establish cross-departmental AI innovation teams comprising business owners, technical experts, and data scientists. These teams should identify high-impact use cases, redesign workflows, and iterate continuously. Begin with data-rich, high-friction areas where value can be validated quickly. Ensure scalability and reusability across similar processes to minimize redundant development and maximize asset value.

2. Culture and Talent Mechanisms: Keys to Active Adoption

Bridging the gap between AI availability and consistent use requires organizational commitment, employee empowerment, and cultural transformation.

Promote an AI-first mindset through leadership advocacy, internal storytelling, and grassroots experimentation. Align usage with performance incentives by incorporating AI adoption metrics into KPIs or OKRs. Invest in tiered AI literacy programs, tailored to roles and seniority, to build a baseline of AI fluency and confidence across the organization.

3. Cost Optimization and Sustainable Governance

As costs shift toward compute and compliance, enterprises must optimize infrastructure and fortify governance.

Implement granular cloud cost control strategies and improve model inference efficiency through hardware acceleration or architectural simplification. Develop a comprehensive AI governance framework encompassing data privacy, algorithmic fairness, model interpretability, and ethical accountability. Though initial investments may be substantial, they provide long-term protection against legal, reputational, and operational risks.

4. Data-Driven ROI and Strategic Iteration

Establish end-to-end AI performance and ROI monitoring systems. Track tool usage, workflow impact, and business outcomes (e.g., efficiency gains, customer satisfaction) to quantify value creation.

Design robust ROI models tailored to each use case — including direct and indirect costs and benefits. Use insights to refine investment priorities, sunset underperforming projects, and iterate AI strategy in alignment with evolving goals. Let data—not assumptions—guide AI evolution.

Conclusion

Enterprise AI adoption has entered deep waters. To capture long-term value, organizations must treat AI not as a tool, but as a strategic infrastructure, guided by scenario-centric design, cultural alignment, and governance excellence. Only then can they unlock AI’s productivity dividends and build a resilient, intelligent competitive advantage.

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