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Service automation and organisational structure:
An application example based on an AI platform.
F. Leondini1
, M. De Angelis2
.
November 2018
1
Director of Birra Castello SpA and Lecturer at the Master in Trade Management of Out of Home Consumption at the
LUISS Business School.
2
Professor of Marketing at LUISS University and Director of the Master.
2
Abstract.
This work sets out to bring the logics governing B2C processes into the company,
interpreting internal B2B relations as the new frontier of B2C. The basic idea is to reinterpret
the organisational structure as a set of processes, rather than functions, active in
multilateral markets and operating according to the logic of "Service Design Thinking" in
order to:
1. Build service automation models based on platforms governed by AI protocols;
2. Simplify internal learning processes to increase organisational efficiency;
3. Streamline inter-organisational communication to increase both process
effectiveness and internal competencies.
Making use of the work of the various functions, the processes are encouraged to be
activated by an AI HUB which acts as an efficient and neutral communication platform. The
HUB operates through the interpretation of natural languages and on unstructured
communications. The final result of the process, which is an operational summary of the
work of the various functions involved, becomes on one hand the parameter for evaluating
the work carried out, and on the other it contributes substantially to giving meaning to the
tasks to be performed. It is, therefore, an approach based on the theories of organisational
systems, thinking of coordination and control mechanisms managed through "loose
coupling".
Using a concrete case, the final ultimate aim is to demonstrate that it is possible to
become a "Digital Company" but, equally, to do so we must get rid of the last conceptual
regurgitations of the short century.
This work is a synthesis of a series of reflections born within the Master in Trade
Management of Out of Home Consumption held at the LUISS Business School for AFDB.
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1. Introduction:
"Every company will be a digital company!" These are the words that Tatiana
Rizzante, Reply's administrator, used to close Xchange 2015, but among those who were
applauding in the hall, how many had really understood the meaning of that statement?
This is an intriguing question and also the starting point for this document. Today,
seeking to understand how technological development can influence organisational
structures means accepting change not only in its external components, but also, and
perhaps above all, in its own institutional elements: human beings.
If the act of organising is an act instituting reality3, the development of organisational
mechanisms is the foundation of business gnoseology. Understanding, therefore, how
organisations not only "know", but even "learn" and, therefore, how a set of rules can have
its own intellectual life, even if partly derived from the actors who are an integral part of it,
is not only a stimulating cultural challenge but, more concretely, represents the frontier
that4 companies are called to pursue to maintain their ability to structure, know and
interpret reality.
From a methodological point of view, the construction of a new "Transcendental
Logic"5 must take into account at least three different contexts:
a. The first refers to technological drift, and in particular digital drift;
b. The second relates to social dynamics, with particular reference to organisations;
c. The third concerns the "Service Design Thinking" applied, however, to internal
organisational processes and not, as is usually done, to the reformulation of services for
the company’s customers.
These are the methodological bases on which the study has been set up, using the theory of
multilateral markets as a process activator.
The document is developed in five different parts that offer:
1. A brief analysis of the technological contexts;
2. A vision of organisational contexts;
3. The way in which Service Design Thinking becomes an element of organisational design;
4. The interrelationships between the structure and a Hub consisting of an AI platform;
5. A concrete case of implementation of what has been proposed.
3
Weick, K. E., Organizzare. La psicologia sociale dei processi organizzativi, ISEDI, Utet Libreria, 1993.
4
Turner, F. J., The Significance of the Frontier in American History, American Historical Association, 1893.
5
Kant, I., Critica della Ragion Pura, edited by Gentile, G., Lombardo Radice, G., Laterza, 2005.
4
2. The technological context.
Speed of diffusion, ease of use and global economies of adoption are the basic
characteristics of today's technological drift. Supported by a pervasive infrastructural
architecture, these processes have created an interconnected and above all hyper-complex
society6 in which communication flows overlap in a continuous dialectical mixing that struggles
to achieve a synthesis.
From the above it is clear that the business world cannot ignore the impacts of
technology not only in terms of production, an element acquired because it is of simple linear
quantification, but, above all, in organisational terms. From this point of view, we have
witnessed and continue to witness a gross error, which is indeed very easy to make, of logical
inversion between means and ends.
While today it appears taken for granted that technology is merely a set of standard
protocols and electricity used to provide various kinds of services, rather than an action in itself
endowed with sense and purpose, this vision continues to hold the dangerous seed of
misunderstanding, and the risk of giving meaning to a platform as such is still high. This is
because often the creation of a technological protocol becomes the irreplaceable basis for
concretely establishing a series of processes that, otherwise, would simply not be so. From this
vision derive a series of organisational approaches which, rather than simplifying these
processes, hyper-structure them. Technology as an organisational "addendum" to which to
adapt established practices, the birth of "Digital Management" as a new organisational function
or, finally, the reduction of innovation to a mere technical method with specific purposes, are
among the most widespread organisational misunderstandings.
Before proposing a solution to the problem, it is essential to agree on the terms of the
question and, in particular, operationally define what is being discussed. From a strictly
semantic point of view, in common language and in this document, the term "digital
technology" refers to all those technologies that are based either on the pervasive diffusion
among specialised and other users, or that, even if referring to specific users, provide access to
one or more series of information that were previously practically impossible to obtain. The
above-mentioned risk of disaggregating the prosthetic functions of digital technology in favour
of an analytical taxonomy of its individual components, thus losing the systemic function that is
specific to technological platforms, leads us to consider these technologies as a functional
superstructure of the previous business model or, at best, an efficient shortcut aimed at
proposing new products or services. The logical response to this dizzying loop is to recognise the
organisational essence of communication7 rediscovered both in its etymological roots, of cum-
munus "common reward", and its modern roots as the main function of digital technologies. In
this sense, it is possible to argue that "digital" is a way of understanding business organisations
that is rooted and extended within the theory of organisational systems. It is a way of
6
Dominici, P., La comunicazione nella società ipercomplessa. Condividere la conoscenza per governare il mutamento.,
Franco Angeli, 2005.
7
Dominici, P., Comunicazione e produzione sociale di conoscenza: nuovi scenari per le organizzazioni complesse, in
“Rivista trimestrale di scienza dell’amministrazione, vol. III, 2013, Franco Angeli.
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interpreting the organisational structure through which business operations can be completely
reviewed, and this is why any interpretation of a functional nature becomes reductive.
Ultimately, it is a matter of acknowledging the syncretic and fusive characteristics of digital
platforms that, from a strictly systemic point of view, are expressed in:
- A structured transfer of information from supply to demand (reduction of information
asymmetries);
- A simplification of channel structures (reduction of organisational asymmetries);
- A management of positive and negative externalities (management of the effects
produced by the organisational ecosystem).
If, at this point, digital technologies are based on the theory of organisational systems,
and specifically we begin to talk about the economic ecosystem rather than the supply
chain, we can argue that the structural characteristics of these platforms are able to
perform their tasks independently of external constraints or stresses. This is because
learning processes are continuous and iterative in nature, and therefore involve
retrospective and retroactive actions. In other words, digital technology has enlivened the
organisational structure, not so much through its institutional action, but rather through a
very fast acceleration of communication processes that support as many organisational
processes.
At this point it seems more necessary than ever to broaden the definition of
"environment", referring not only to what is external to the company, but also incorporating
internal dynamics in the lexeme. Hence the need to rewrite not only the logic of revenue
formation, seen as the result of the interaction of a given structure with an uncertain
environment, but also value creation models, interpreted as continuous two-way exchanges
between two Heraclitian platforms, the organisational structure and the external
environment, which act in a symbiotic context that does not cancel out their independence.
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3. The organisational context.
The act of organising has in itself the aim of reducing complexity in a set of closed
cases and procedures. While society was viewed as a set of defined sections, and the
difficulty lay only in identifying the vectors of segmentation, a strictly hierarchical view of its
structure was the best one could design. The more detailed the organisational variables
were, the more it was possible to define a precise case study of semi-automatic responses
to manage the different moments of reality, perceived as external, unknown and, often,
hostile. Even in that context, communicating meant organising8 but, until fifteen years ago,
this was marked by an orderly, sequential, structured and alphabetical flow of
communications.
The change in the social model, which inevitably was followed by the communicative
model, has not made the link between communication and organisation less true, but has
required, and continues to require, that this link be rewritten. Yet, while it is clear that
communication fuels organisation, and here a grammatical attention is required because
what is true for verbs cannot be translated in itself with the same content of truthfulness in
the corresponding nouns9, it is important to clearly define the fundamental function of
organising.
Symmetrically to the equation ‘Communicating=Organising’, it is possible to argue10
that ‘Organising=Giving Meaning’ (to the actions and stimuli received). In other words,
organising "corresponds to making sense of the flows of experience"11. As we move in an
increasingly destructured social system, it is clear that giving meaning, supported by
continuous communicative stimuli, has equally open and, above all, institutional
characteristics of reality. Indeed, if it is true that the "meaning" can emerge almost
automatically from communication flows, the same cannot be said of the "meaning" which,
on the other hand, is abductive by nature and therefore requires interpretation, the basis of
the gnoseological process of organisation.
However, it would have been of little significance to focus the analysis on the
mechanisms of internal learning, neglecting the interactions with the external environment.
It is, in fact, on the basis of cognitive processes that the organisation defines its actions
towards the outside, towards those other that itself, that as a result of these is "activated”12
(enacted) and which, consequently, becomes actant in the learning process.
If it is true that "how can I know what I think until I see what I say?"13, it is equally
true that the actors of the 21st century are "sensation seekers 14 and therefore require a
close match between sight and thought. The consequence is that the mechanisms for
8
Dominici, P., Non solo tecnologia… complessità e imprevedibilità dei sistemi organizzativi, Il Sole24 Nova, 12.08.15.
9
Costa, G., Gubitta, P., Pittino, D., Organizzazione aziendale. Mercati, gerarchie e convenzioni, Mc Graw Hill, 2014.
10
Weick, K. E., Senso e significato nell’organizzazione, Raffaello Cortina, 1997.
11
Bartezzaghi, E., L’organizzazione dell’impresa, ETAS, 2010.
12
Weick, K. E., Processi di attivazione nelle organizzazioni, in Zan, S., “Logiche di azione organizzativa”, Il Mulino,
Bologna, 1998.
13
Fabris, GP., Societing, Egea, 2008.
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coordinating and monitoring organisational action must be rethought. The solution lies in
"loose coupling"15, in the "weak bonds", which guarantee a common cognitive
encyclopaedia but, at the same time, leave the achievement of a social sharing of meaning
to the processes of dialectical synthesis.
The advantages of a weakly linked model of control and coordination are obvious16:
- It allows the sub-systems of an organisation to last over time;
- It is a sensitive mechanism of perception of the environment;
- It facilitates local adaptation to specific circumstances;
- It ensures greater adaptability to external changes;
- It allows possible problems of a sub-system to be isolated;
- It facilitates the autonomy and self-determination of the actors;
- It reduces the possibility of conflict, to the benefit of coordination costs.
At this point, it is a matter of correctly establishing the cultural path that must act as
a process activator. In an economic context in which goods have lost their materiality in
order to become a semiotic universe, organisations must free themselves from the value of
using processes to accentuate their service components. It is "Service Design Thinking" that,
with increasing insistence, is being proposed as the new "Mason-Dixon Line": the stroke of a
pen (of business culture, in this case) that establishes not so much a frontier, but rather a
border.
15
Weick, K. E., Le organizzazioni scolastiche come sistemi a legame debole, in Zan, S., “Logiche di azione
organizzativa”, Il Mulino, Bologna, 1998.
16
Weick, K.E., Le organizzazioni scolastiche come sistemi a legame debole, in Zan, S., “Logiche di azione organizzativa”,
Il Mulino, Bologna, 1998.
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4. Service Design Thinking.
“If you ask ten people what service design is, you would end up with eleven different
answers, at least.”17 Fortunately, for the purposes of this work, there is no need to give a
precise definition of "service design thinking". Talking about competition on services, in fact,
almost always implies preparing oneself mentally to review the relationship between the
company and the market, without forgetting that "service is organisational syntax"18 even
before it is an element of negotiation.
Starting, therefore, from an organisational vision of services, thus based on the analysis
of the internal processes in the structure, it is possible to start to rethink all the internal
processes with a completely different logic. It is not a question of seeing the different
functions, or business units, as "internal customers", whose relationships are governed by
complicated transfer pricing policies, but of understanding the entire company as a
multilateral market, organised by processes, in which, on the basis of the contribution
required by the specific process for each function, subsidised and subsidiary parts are
identified. In other words, designing a service-oriented organisational structure by definition
means conceiving the whole company as a set of interoperable ecosystems, and no longer
as a series of hierarchically coordinated functions.
A bilateral market, or multilateral market in this case, “is market thus roughly defined as
markets in which one or several platforms enable interactions between end-users and try to
get the two sides “on board” by appropriately charging each side”.19 Therefore, from a
methodological point of view, seeing the organisational structure through the lens of service
design means, by definition, replacing vertical competence platforms with a communication
flow that affects all the functions involved in the underlying process. In other words, the
organisational structure becomes internally flexible, grouping together shared competences
and looking at the efficiency of the process as a whole, rather than at that of the specific
function (Fig.1).
17
Various authors, This is service design thinking, BIS Publishers, 2017.
18
The European House-Ambrosetti, Service data driven, Working Paper for the Service Forum held on 25.10.2017.
19
Carnevale-Maffè, C.A., Ruffoni, G., Two sided markets: models and business cases, Working Paper, SDA Bocconi
School of Management, February 2009.
F1
F2
F1
Fn
Fig. 1 The Organisational process
Organisationalprocess
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Setting up the structure in terms of processes allows the organisation to be
coordinated through a series of weak links that give meaning to the actions of the
company, developing the latent entrepreneurship of the actors and continuously
negotiating the balance between "economic efficiency and experiential
effectiveness".20
Designed in this way, the structure becomes very much able to express the
holistic synergies of the systems and, in particular (Fig. 2):
o Gratification of the operators who help to give meaning to the actions that the
working group carries out;
o Realisation of educating processes regarding the complexity of phenomena;
o Implementation of direct social control mechanisms;
o Increased economies of scope: it is not enough to "do one's job", it is necessary
for everyone to do it.
Figure 2. The advantages of a service designed structure.21
20
Zanardelli, R., in an interesting exchange of views on Linkedin.
21
Various authors, This is service design thinking, BIS Publishers, 2017.
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5. HUB and externality management.
In a structure organised for simultaneous, non-sequential execution processes, each
function is called upon to intervene simultaneously, to a different extent and with
participatory methods, in all the activities in progress, according to a ‘real time’ rather than
‘time sharing’ logic.
In fact, setting up an organisation by processes means proceeding as in "event"
programming in which, following the fuzzy logic, a programme (process) probably performs
an operation and then waits for the next user interactions (functional responses) on the
basis of which it establishes the subsequent operational steps.
Always using the ICT syntax, in an organisational structure set up by processes, each
single function is an "object" defined by:
a. Properties: open DB to exchange;
b. Methods: operating instructions and implementation methods.
In this context, however, even the single process, which is also intimately connected to
an event, must be seen, in turn, as an object defined by a set of data (properties) that it
exchanges with the outside (client) and with the inside (functions) and operational protocols
(methods). It is not a question of imagining a mechanisation of processes, which, however
"intelligent" they may be, would always be alienating, but of facilitating
inter(intra)organisational relations by encouraging personal choices and the consequent
assumption of personal responsibility. On this point, although with different purposes, the
Regulator has also intervened with the definition of a standard (ISO 9241-210) that governs
the "human-centred design process for interactive systems" (formerly ISO 13407). It is true
that this regulation born outside the strictly organisational field, but it does however allow
us to hypothesize the creation of an ISO-UNI standard also for the organisational processes
of a "service designed" structure. In other words, where conducted with rigour and
attention, design thinking not only can, but must, come out of the obscure field of a sort of
subculture oscillating between Nerd and neo-bohemian contexts, typical of a romantic, but
completely decontextualized, vision of innovation processes, to claim its right to be
considered a rational expression of a modern interpretation of business processes as a
whole.
Having abandoned a linear structure, based on classical logic and coordination and
hierarchical control mechanisms, in favour of a fuzzy approach, managed by loose coupling
and highly adaptive, poses two types of problems:
a. The recovery of efficiency;
b. Maintaining effectiveness.
As far as the recovery of efficiency is concerned, it is important to clarify that "When
seeking efficiency, the easiest way is to reduce costs. Not only is it the easiest way, but it
gives immediate returns. In "service", the way to reduce costs is not only the least noble, but
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also the one that ensures the worst result in the long term and is a guarantee of loss in the
quality of the service provided.22 It follows that in a service designed organisation the
recovery of efficiency must be based not so much on cost reduction, but rather on a
rethinking of processes aimed at automating activities with low added value.
Maintaining effectiveness in a structure by definition suited to serendipity is a task to
which the utmost attention must be paid, because the risk is that the entire organisation
gets out of hand and ends up "talking about something else". And it is precisely in the
regulatory mechanisms of this organisational "talk" that the solution to the balance between
economic needs (efficiency) and experiential needs (effectiveness) lies. The solution to the
problems of efficiency and effectiveness is to be found in the creation of a HUB that fuels
organisational processes, interpreted as authentic service platforms.
Thus defined, the HUB becomes the most efficient place of transit for inter-functional
information flows which are completed within the processes that integrate them, giving
them the meaning of organisational action. If, in fact, we see the entire organisation as a
multilateral market with a high production of externalities, in which the equation
Communicate=Organise is valid, the HUB has the function of efficiently distributing the
communications and, for this very reason, exercises a fundamental control over the
effectiveness of the single processes related to it; in short, the HUB is a platform equipped
with artificial intelligence (AI). The reasons that lead to the development and use of an AI
platform to activate and manage organisational processes derive from the constitutive
characteristics of the platform itself.
The first attribute is efficiency, understood both as:
1. Computing power and scalability, both provided by cloud management;
2. Operational speed and ability to handle complexity, guaranteed by native algorithms.
In fact, the speed and volume of internal and external interactions are such that,
even in relatively simple organisations, continuous support is required (Fig. 3)23.
22
The European House-Ambrosetti, Service data driven, Working Paper for the Service Forum held on 25.10.2017.
23
Gigante, F., IBM® Cloud and Cognitive, Working Paper April 2018.
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The second feature is the ability to manage the externalities produced by the system.
Simply because it works, the organisational ecosystem creates interrelationships and, in
communicating, can increase or destroy knowledge. The control of these "lateral processes"
lies in the management of externalities. The externalities can be cross side, which in the case
in question, are identified with the inter-functional information flows, which pass through
the HUB, and which become assets of the process to which they refer (fig. 4), or
same side that are constituted by the intra-functional information flows that, passing
through the HUB, return to the issuer with an enriched information content (Fig.5).
Figure 3. The distribution of requests and the states of attention.
Figure 4. The structure of cross side externalities
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The management of externalities is based on the analysis of the parameters of
relevance and attention. The elimination of information redundancies, the broadcasting
traffic in the jargon of the networks, is a function of the efficiency of the HUB. In this case,
the relevance is given by the frequency of information provided by the organisational
function, weighted by the importance of the latter in completing the process; attention is
measured by the speed with which the assigned task is performed within the function.
Precisely, relevance generates cross side externalities, while attention generates same side
externalities.
The third element of the HUB is neutrality understood as “when end users on the two
sides of the market act independently”.24 This definition allows us underline two important
aspects:
1. In the proposed structure the "end users" are not only external third parties, but
also, and above all, the components of the organisation. In this context, the new
B2C is B2B because the challenge is not to replicate a "Fordist 4.0 model", but to
enact25 widespread and shared environments, situations and intelligences. Only
in this way can the company organisation become a stimulus for business
growth.
2. The independence of actions requires coordination, not coercion. This means
that control is much more like organisational maieutics than Sergeant Gerheim's
monologue26. What is lost in coordination time is recovered in participation and
passion in the performance of the assigned tasks.
The fourth component of the HUB consists in the ability to integrate two of the three
control orders27 and, precisely those of:
- Second order, defined by routine programmes and procedures;
24
Carnevale-Maffè, C.A., Ruffoni, G., Two sided markets: models and business cases, Working Paper, SDA Bocconi
School of Management, February 2009.
25
Weick, K. E., Processi di attivazione nelle organizzazioni, in Zan, S., “Logiche di azione organizzativa”, Il Mulino,
Bologna, 1998.
26
Hasford, G., Nato per uccidere, Bompiani 1987.
27
Spina, A., Senso e significato nell’organizzazione, UniSalerno, 2006.
Figure 5. The structure of same side externalities.
14
- Third order, relating to checks on the underlying premises, representing the point of
contact between organisational decisions and the giving of meaning to actions;
leaving, and this is an important aspect, those of the first order, relevant to direct
supervision, to human intervention.
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6. The birth of the Cognitive Operation Assistant (COA): a concrete proposal.
Based on IBM Watson technology, COA is a dialogue platform that, through the use of natural
language, can automatically interact with ERP software using different access methods and
different types of devices.
COA is, therefore, a concrete HUB proposal, as outlined above, which, through the efficient
management of information flows, reduces organisational latency and enacts processes for the
dissemination of operational responsibilities from a process and not a function point of view
(Fig.6). The COA design premise is to redefine the methods of interaction between Man and
Machine, creating an interoperable and open wetware.
Figure 6: COA architecture.
Currently the areas of COA application have been limited to (Fig. 7):
Figure 7: COA skills.
To exemplify the operating methods of COA, the case chosen refers to the full return of
goods by a customer. The case is interesting because:
1. It involves several functions, in this case:
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a. Customer care,
b. In- and outbound logistics,
c. The sales department.
2. it is simple and frequently used, so as not to fall into the exceptionality created “ad
usum proprium”. The frequency, then, makes it possible to test the management of the
distribution of requests (see fig.3).
3. it is widespread, has scalability requirements and is not inherent to a specific business or
sector.
4. It is sufficiently complex to offer long, cumbersome organisational management and
communication methods in natural and, therefore, unstructured language.
5. It has a high added value for both the front end (customers) and the back end
(structure) of the organisation.
6. It has one or more automated functions.
7. it is interoperable with any complete management system.
The platforms used were:
1. IBM® Watson® for the AI HUB,
2. Gnosis®, an ERP on a SmeUp® base for the management software.
The archives involved in the process management were:
1. Customer records;
2. Complete and batch-related customer delivery schedule;
3. Finished product warehouse records;
4. Vendor records;
5. Real-time situation of the finished product warehouse stocks;
6. Issued invoice/delivery note archive;
7. Orders to suppliers in progress archive.
The analytical operational description of a goods return process is summarised in Fig. 8:
Figure 8: Analysis of the full or non-compliant goods return process.
17
The objective of the COA is to make the information flow more fluid.
- Respecting all (user configurable) controls,
- Interrogating the management system starting from a natural text,
- Maintaining the residential uniqueness of the operational archives.
In summary, what is shown in Fig. 9 clearly defines the interactions between the COA and
the individual functions involved in the process:
Figure 9: Interactions between the COA and the management system for request consistency checks.
From a wetware point of view, and therefore of the interactions with the user, Fig.s 10 and
11 show the screenshots of the dialogue managed with two different access methods: e-mail and
mobile.
Figure 10: COA-user interaction by e-mail
18
Figure 11: COA-user interaction by mobile.
In closing, all that remains is to try to measure the structural benefits induced by COAs. The
following measurements are intended as a first set of quantitative proxies to account for the
procedural efficiency and effectiveness of COAs. Here, also due to the lack of consistent surveys, we
have not been able to define the parameters relating to organisational impacts.
Fig. 12 highlights the results achieved in terms of the correct completion of the process as a
whole and, consequently, can be taken as a basis for defining a new set of incentive parameters no
longer linked to the correct execution of the function, but to the successful completion of the entire
process.
19
Figure 12: Summary of the results obtained with the introduction of COAs.
20
7. Conclusions.
All that remains is to try to bring the main points of reflection that emerged in this
study back into the system, aware of the fact that it would be unrealistic to even think that
we have completely covered the subject.
A first consideration concerns feasibility. While examining an apparently simple but
widespread process with serious repercussions on the company's reputation, it has been
shown that there is the possibility of integrating AI-based protocols and internal
management processes. However, having made a concrete case has implications that go
beyond the single management and, specifically, allow us to:
1. Imagine an extension to all the different processes already expressed today in
natural language;
2. Destructure Man-Machine communication, by moving from system screens,
which include a period of training, to natural language interactions, reducing
learning costs (increasing efficiency);
3. Develop learning platforms and internal skills, making the steps of "professional
knowledge" smoother (increase in effectiveness).
A second reflection should be made on the nature of the HUB. Seeing the HUB as an
internal chatbot does not fully comprehend its nature as a process combustion which, in the
proposed organisational hypothesis, constitutes its fundamental characteristic. Setting up an
organisation by processes, rather than by functions, means imagining the company as a
multilateral market that, in order to function, needs an efficient communications
management platform; that is, a HUB based on AI protocols (fig. 13)28.
28
Gigante, F., IBM® Cloud and Cognitive, Working Paper April 2018.
Figure 13: The HUB of a structure organised by processes.
21
The third conclusion, which derives from the above and is typical of a "service
design" vision, has the consequence of interpreting organisational interaction as the new
frontier of B2C. In fact, being able to set up processes based on highly decentralised
coordination mechanisms, trying to interface as much as possible with the complexity of
reality, means letting the giving of meaning to organisational action be the work of the
structural subsystems and, ultimately, of the individual operators. Just like in the market,
where the last arbiter is the customer/consumer. Seeing B2B exchanges as the new frontier
of B2C means overturning the key concepts of organisational design, accepting that
complexity cannot be reduced to a hierarchically ordered casuistry, but must refer to open
solutions governed by individual awareness and responsibility; a concept that, it should be
stressed, is different from organisational anomie or anarchy.
A fourth point for reflection is related to the organisational approach to processes.
Focusing attention on processes rather than functions leads to increased interactions with
the external environment, which becomes a subsidiary part of a multilateral market
promoted by the organisation itself through the HUB, without falling into self-referentiality
(Fig. 4). In other words, it is possible to imagine that the interest of the structure will be to
increase the number of processes, involving external third parties (stakeholders in the broad
sense) who actively contribute to the continuous improvement of business performance.
This step, which is cultural rather than technical, reiterates the need to develop an
organisational "Service Design Thinking" that starts from the foundations of the structure
and then, following the processes, involves the market. In this sense, extending the
competences involved in the various processes becomes the basis for developing an
organisational dynamic that is effectively service-oriented, in which the physical product
becomes a functional accessory whose value is above all experiential. In other words, it is a
matter of becoming aware that a company's performance will also and increasingly depend
on the quality of its algorithms rather than on the strength classes of its bolts, the efficiency
of which is taken for granted.
The integration of AI in organisations can become an element of simplification in the
process of approaching a "service” logic. This document aims on one hand to offer an
operational contribution, demonstrating that the road is viable, and on the other to
stimulate discussion on a topic that, in the opinion of the writer, is one of the most
important issues companies will have to deal with in the near future.
22
References
1. Various authors, Ici Service Design Thinking, BIS Publishers, 2017;
2. Arvidsson, A, Giordano, A, edited by, Societing Reloaded, Egea, 2013;
3. Bartezzaghi, E., L’organizzazione dell’impresa, ETAS, 2010;
4. Carnevale-Maffè, C.A., Ruffoni, G., Two sided markets: models and business
cases, Working Paper, SDA Bocconi School of Management, 2009;
5. Costa, G., Gubitta, P., Pittino, P., Organizzazione aziendale. Mercati, gerarchie e
convenzioni, Mc Graw Hill, 2014;
6. Dominici, P., Comunicazione e produzione sociale di conoscenza: nuovi scenari
per le organizzazioni complesse, in “Rivista trimestrale di scienze
dell’amministrazione”, Vol. III, 2014, Franco Angeli;
7. Dominici, P., La comunicazione nella società ipercomplessa. Condividere la
conoscenza per governare il mutamento, Franco angeli, 2005;
8. Dominici, P., Non solo tecnologia… complessità e imprevedibilità dei sistemi
organizzativi, Il Sole24 Nova, 12.08.2015;
9. Fabris, GP., Societing, Egea, 2008;
10.Gigante, F., IBM® Cloud and Cognitive, Working Paper April 2018;
11.Hasford, G., Nato per uccidere, Bompiani, 1987;
12.Kant, I., Critica della Ragione Pura, edited by Gentile G., Lombardo Radice G.,
Laterza, 2005;
13.Spina, A., Senso e significato nell’organizzazione, UniSalerno, 2006;
14.The European House-Ambrosetti, Service data driven, Working Paper for the
Service Forum, 25.10.2017;
15.Turner, F. J., The Significance of the Frontier in American History, American
Historical Association, 1893;
16.Weick, K. E., Le organizzazioni scolastiche come sistemi a legame debole, in
Zan, S., “Logiche di azione organizzativa”, Il Mulino, 1998;
17.Weick, K. E., Organizzare. La psicologia sociale dei processi organizzativi, ISEDI,
Utet Libreria, 1993;
18. Weick, K. E., Processi di attivazione nelle organizzazioni, in Zan, S., “Logiche di
azione organizzativa”, Il Mulino, 1998.

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Service automation and organisational structure an application example based on an ai platform

  • 1. 1 Service automation and organisational structure: An application example based on an AI platform. F. Leondini1 , M. De Angelis2 . November 2018 1 Director of Birra Castello SpA and Lecturer at the Master in Trade Management of Out of Home Consumption at the LUISS Business School. 2 Professor of Marketing at LUISS University and Director of the Master.
  • 2. 2 Abstract. This work sets out to bring the logics governing B2C processes into the company, interpreting internal B2B relations as the new frontier of B2C. The basic idea is to reinterpret the organisational structure as a set of processes, rather than functions, active in multilateral markets and operating according to the logic of "Service Design Thinking" in order to: 1. Build service automation models based on platforms governed by AI protocols; 2. Simplify internal learning processes to increase organisational efficiency; 3. Streamline inter-organisational communication to increase both process effectiveness and internal competencies. Making use of the work of the various functions, the processes are encouraged to be activated by an AI HUB which acts as an efficient and neutral communication platform. The HUB operates through the interpretation of natural languages and on unstructured communications. The final result of the process, which is an operational summary of the work of the various functions involved, becomes on one hand the parameter for evaluating the work carried out, and on the other it contributes substantially to giving meaning to the tasks to be performed. It is, therefore, an approach based on the theories of organisational systems, thinking of coordination and control mechanisms managed through "loose coupling". Using a concrete case, the final ultimate aim is to demonstrate that it is possible to become a "Digital Company" but, equally, to do so we must get rid of the last conceptual regurgitations of the short century. This work is a synthesis of a series of reflections born within the Master in Trade Management of Out of Home Consumption held at the LUISS Business School for AFDB.
  • 3. 3 1. Introduction: "Every company will be a digital company!" These are the words that Tatiana Rizzante, Reply's administrator, used to close Xchange 2015, but among those who were applauding in the hall, how many had really understood the meaning of that statement? This is an intriguing question and also the starting point for this document. Today, seeking to understand how technological development can influence organisational structures means accepting change not only in its external components, but also, and perhaps above all, in its own institutional elements: human beings. If the act of organising is an act instituting reality3, the development of organisational mechanisms is the foundation of business gnoseology. Understanding, therefore, how organisations not only "know", but even "learn" and, therefore, how a set of rules can have its own intellectual life, even if partly derived from the actors who are an integral part of it, is not only a stimulating cultural challenge but, more concretely, represents the frontier that4 companies are called to pursue to maintain their ability to structure, know and interpret reality. From a methodological point of view, the construction of a new "Transcendental Logic"5 must take into account at least three different contexts: a. The first refers to technological drift, and in particular digital drift; b. The second relates to social dynamics, with particular reference to organisations; c. The third concerns the "Service Design Thinking" applied, however, to internal organisational processes and not, as is usually done, to the reformulation of services for the company’s customers. These are the methodological bases on which the study has been set up, using the theory of multilateral markets as a process activator. The document is developed in five different parts that offer: 1. A brief analysis of the technological contexts; 2. A vision of organisational contexts; 3. The way in which Service Design Thinking becomes an element of organisational design; 4. The interrelationships between the structure and a Hub consisting of an AI platform; 5. A concrete case of implementation of what has been proposed. 3 Weick, K. E., Organizzare. La psicologia sociale dei processi organizzativi, ISEDI, Utet Libreria, 1993. 4 Turner, F. J., The Significance of the Frontier in American History, American Historical Association, 1893. 5 Kant, I., Critica della Ragion Pura, edited by Gentile, G., Lombardo Radice, G., Laterza, 2005.
  • 4. 4 2. The technological context. Speed of diffusion, ease of use and global economies of adoption are the basic characteristics of today's technological drift. Supported by a pervasive infrastructural architecture, these processes have created an interconnected and above all hyper-complex society6 in which communication flows overlap in a continuous dialectical mixing that struggles to achieve a synthesis. From the above it is clear that the business world cannot ignore the impacts of technology not only in terms of production, an element acquired because it is of simple linear quantification, but, above all, in organisational terms. From this point of view, we have witnessed and continue to witness a gross error, which is indeed very easy to make, of logical inversion between means and ends. While today it appears taken for granted that technology is merely a set of standard protocols and electricity used to provide various kinds of services, rather than an action in itself endowed with sense and purpose, this vision continues to hold the dangerous seed of misunderstanding, and the risk of giving meaning to a platform as such is still high. This is because often the creation of a technological protocol becomes the irreplaceable basis for concretely establishing a series of processes that, otherwise, would simply not be so. From this vision derive a series of organisational approaches which, rather than simplifying these processes, hyper-structure them. Technology as an organisational "addendum" to which to adapt established practices, the birth of "Digital Management" as a new organisational function or, finally, the reduction of innovation to a mere technical method with specific purposes, are among the most widespread organisational misunderstandings. Before proposing a solution to the problem, it is essential to agree on the terms of the question and, in particular, operationally define what is being discussed. From a strictly semantic point of view, in common language and in this document, the term "digital technology" refers to all those technologies that are based either on the pervasive diffusion among specialised and other users, or that, even if referring to specific users, provide access to one or more series of information that were previously practically impossible to obtain. The above-mentioned risk of disaggregating the prosthetic functions of digital technology in favour of an analytical taxonomy of its individual components, thus losing the systemic function that is specific to technological platforms, leads us to consider these technologies as a functional superstructure of the previous business model or, at best, an efficient shortcut aimed at proposing new products or services. The logical response to this dizzying loop is to recognise the organisational essence of communication7 rediscovered both in its etymological roots, of cum- munus "common reward", and its modern roots as the main function of digital technologies. In this sense, it is possible to argue that "digital" is a way of understanding business organisations that is rooted and extended within the theory of organisational systems. It is a way of 6 Dominici, P., La comunicazione nella società ipercomplessa. Condividere la conoscenza per governare il mutamento., Franco Angeli, 2005. 7 Dominici, P., Comunicazione e produzione sociale di conoscenza: nuovi scenari per le organizzazioni complesse, in “Rivista trimestrale di scienza dell’amministrazione, vol. III, 2013, Franco Angeli.
  • 5. 5 interpreting the organisational structure through which business operations can be completely reviewed, and this is why any interpretation of a functional nature becomes reductive. Ultimately, it is a matter of acknowledging the syncretic and fusive characteristics of digital platforms that, from a strictly systemic point of view, are expressed in: - A structured transfer of information from supply to demand (reduction of information asymmetries); - A simplification of channel structures (reduction of organisational asymmetries); - A management of positive and negative externalities (management of the effects produced by the organisational ecosystem). If, at this point, digital technologies are based on the theory of organisational systems, and specifically we begin to talk about the economic ecosystem rather than the supply chain, we can argue that the structural characteristics of these platforms are able to perform their tasks independently of external constraints or stresses. This is because learning processes are continuous and iterative in nature, and therefore involve retrospective and retroactive actions. In other words, digital technology has enlivened the organisational structure, not so much through its institutional action, but rather through a very fast acceleration of communication processes that support as many organisational processes. At this point it seems more necessary than ever to broaden the definition of "environment", referring not only to what is external to the company, but also incorporating internal dynamics in the lexeme. Hence the need to rewrite not only the logic of revenue formation, seen as the result of the interaction of a given structure with an uncertain environment, but also value creation models, interpreted as continuous two-way exchanges between two Heraclitian platforms, the organisational structure and the external environment, which act in a symbiotic context that does not cancel out their independence.
  • 6. 6 3. The organisational context. The act of organising has in itself the aim of reducing complexity in a set of closed cases and procedures. While society was viewed as a set of defined sections, and the difficulty lay only in identifying the vectors of segmentation, a strictly hierarchical view of its structure was the best one could design. The more detailed the organisational variables were, the more it was possible to define a precise case study of semi-automatic responses to manage the different moments of reality, perceived as external, unknown and, often, hostile. Even in that context, communicating meant organising8 but, until fifteen years ago, this was marked by an orderly, sequential, structured and alphabetical flow of communications. The change in the social model, which inevitably was followed by the communicative model, has not made the link between communication and organisation less true, but has required, and continues to require, that this link be rewritten. Yet, while it is clear that communication fuels organisation, and here a grammatical attention is required because what is true for verbs cannot be translated in itself with the same content of truthfulness in the corresponding nouns9, it is important to clearly define the fundamental function of organising. Symmetrically to the equation ‘Communicating=Organising’, it is possible to argue10 that ‘Organising=Giving Meaning’ (to the actions and stimuli received). In other words, organising "corresponds to making sense of the flows of experience"11. As we move in an increasingly destructured social system, it is clear that giving meaning, supported by continuous communicative stimuli, has equally open and, above all, institutional characteristics of reality. Indeed, if it is true that the "meaning" can emerge almost automatically from communication flows, the same cannot be said of the "meaning" which, on the other hand, is abductive by nature and therefore requires interpretation, the basis of the gnoseological process of organisation. However, it would have been of little significance to focus the analysis on the mechanisms of internal learning, neglecting the interactions with the external environment. It is, in fact, on the basis of cognitive processes that the organisation defines its actions towards the outside, towards those other that itself, that as a result of these is "activated”12 (enacted) and which, consequently, becomes actant in the learning process. If it is true that "how can I know what I think until I see what I say?"13, it is equally true that the actors of the 21st century are "sensation seekers 14 and therefore require a close match between sight and thought. The consequence is that the mechanisms for 8 Dominici, P., Non solo tecnologia… complessità e imprevedibilità dei sistemi organizzativi, Il Sole24 Nova, 12.08.15. 9 Costa, G., Gubitta, P., Pittino, D., Organizzazione aziendale. Mercati, gerarchie e convenzioni, Mc Graw Hill, 2014. 10 Weick, K. E., Senso e significato nell’organizzazione, Raffaello Cortina, 1997. 11 Bartezzaghi, E., L’organizzazione dell’impresa, ETAS, 2010. 12 Weick, K. E., Processi di attivazione nelle organizzazioni, in Zan, S., “Logiche di azione organizzativa”, Il Mulino, Bologna, 1998. 13 Fabris, GP., Societing, Egea, 2008.
  • 7. 7 coordinating and monitoring organisational action must be rethought. The solution lies in "loose coupling"15, in the "weak bonds", which guarantee a common cognitive encyclopaedia but, at the same time, leave the achievement of a social sharing of meaning to the processes of dialectical synthesis. The advantages of a weakly linked model of control and coordination are obvious16: - It allows the sub-systems of an organisation to last over time; - It is a sensitive mechanism of perception of the environment; - It facilitates local adaptation to specific circumstances; - It ensures greater adaptability to external changes; - It allows possible problems of a sub-system to be isolated; - It facilitates the autonomy and self-determination of the actors; - It reduces the possibility of conflict, to the benefit of coordination costs. At this point, it is a matter of correctly establishing the cultural path that must act as a process activator. In an economic context in which goods have lost their materiality in order to become a semiotic universe, organisations must free themselves from the value of using processes to accentuate their service components. It is "Service Design Thinking" that, with increasing insistence, is being proposed as the new "Mason-Dixon Line": the stroke of a pen (of business culture, in this case) that establishes not so much a frontier, but rather a border. 15 Weick, K. E., Le organizzazioni scolastiche come sistemi a legame debole, in Zan, S., “Logiche di azione organizzativa”, Il Mulino, Bologna, 1998. 16 Weick, K.E., Le organizzazioni scolastiche come sistemi a legame debole, in Zan, S., “Logiche di azione organizzativa”, Il Mulino, Bologna, 1998.
  • 8. 8 4. Service Design Thinking. “If you ask ten people what service design is, you would end up with eleven different answers, at least.”17 Fortunately, for the purposes of this work, there is no need to give a precise definition of "service design thinking". Talking about competition on services, in fact, almost always implies preparing oneself mentally to review the relationship between the company and the market, without forgetting that "service is organisational syntax"18 even before it is an element of negotiation. Starting, therefore, from an organisational vision of services, thus based on the analysis of the internal processes in the structure, it is possible to start to rethink all the internal processes with a completely different logic. It is not a question of seeing the different functions, or business units, as "internal customers", whose relationships are governed by complicated transfer pricing policies, but of understanding the entire company as a multilateral market, organised by processes, in which, on the basis of the contribution required by the specific process for each function, subsidised and subsidiary parts are identified. In other words, designing a service-oriented organisational structure by definition means conceiving the whole company as a set of interoperable ecosystems, and no longer as a series of hierarchically coordinated functions. A bilateral market, or multilateral market in this case, “is market thus roughly defined as markets in which one or several platforms enable interactions between end-users and try to get the two sides “on board” by appropriately charging each side”.19 Therefore, from a methodological point of view, seeing the organisational structure through the lens of service design means, by definition, replacing vertical competence platforms with a communication flow that affects all the functions involved in the underlying process. In other words, the organisational structure becomes internally flexible, grouping together shared competences and looking at the efficiency of the process as a whole, rather than at that of the specific function (Fig.1). 17 Various authors, This is service design thinking, BIS Publishers, 2017. 18 The European House-Ambrosetti, Service data driven, Working Paper for the Service Forum held on 25.10.2017. 19 Carnevale-Maffè, C.A., Ruffoni, G., Two sided markets: models and business cases, Working Paper, SDA Bocconi School of Management, February 2009. F1 F2 F1 Fn Fig. 1 The Organisational process Organisationalprocess
  • 9. 9 Setting up the structure in terms of processes allows the organisation to be coordinated through a series of weak links that give meaning to the actions of the company, developing the latent entrepreneurship of the actors and continuously negotiating the balance between "economic efficiency and experiential effectiveness".20 Designed in this way, the structure becomes very much able to express the holistic synergies of the systems and, in particular (Fig. 2): o Gratification of the operators who help to give meaning to the actions that the working group carries out; o Realisation of educating processes regarding the complexity of phenomena; o Implementation of direct social control mechanisms; o Increased economies of scope: it is not enough to "do one's job", it is necessary for everyone to do it. Figure 2. The advantages of a service designed structure.21 20 Zanardelli, R., in an interesting exchange of views on Linkedin. 21 Various authors, This is service design thinking, BIS Publishers, 2017.
  • 10. 10 5. HUB and externality management. In a structure organised for simultaneous, non-sequential execution processes, each function is called upon to intervene simultaneously, to a different extent and with participatory methods, in all the activities in progress, according to a ‘real time’ rather than ‘time sharing’ logic. In fact, setting up an organisation by processes means proceeding as in "event" programming in which, following the fuzzy logic, a programme (process) probably performs an operation and then waits for the next user interactions (functional responses) on the basis of which it establishes the subsequent operational steps. Always using the ICT syntax, in an organisational structure set up by processes, each single function is an "object" defined by: a. Properties: open DB to exchange; b. Methods: operating instructions and implementation methods. In this context, however, even the single process, which is also intimately connected to an event, must be seen, in turn, as an object defined by a set of data (properties) that it exchanges with the outside (client) and with the inside (functions) and operational protocols (methods). It is not a question of imagining a mechanisation of processes, which, however "intelligent" they may be, would always be alienating, but of facilitating inter(intra)organisational relations by encouraging personal choices and the consequent assumption of personal responsibility. On this point, although with different purposes, the Regulator has also intervened with the definition of a standard (ISO 9241-210) that governs the "human-centred design process for interactive systems" (formerly ISO 13407). It is true that this regulation born outside the strictly organisational field, but it does however allow us to hypothesize the creation of an ISO-UNI standard also for the organisational processes of a "service designed" structure. In other words, where conducted with rigour and attention, design thinking not only can, but must, come out of the obscure field of a sort of subculture oscillating between Nerd and neo-bohemian contexts, typical of a romantic, but completely decontextualized, vision of innovation processes, to claim its right to be considered a rational expression of a modern interpretation of business processes as a whole. Having abandoned a linear structure, based on classical logic and coordination and hierarchical control mechanisms, in favour of a fuzzy approach, managed by loose coupling and highly adaptive, poses two types of problems: a. The recovery of efficiency; b. Maintaining effectiveness. As far as the recovery of efficiency is concerned, it is important to clarify that "When seeking efficiency, the easiest way is to reduce costs. Not only is it the easiest way, but it gives immediate returns. In "service", the way to reduce costs is not only the least noble, but
  • 11. 11 also the one that ensures the worst result in the long term and is a guarantee of loss in the quality of the service provided.22 It follows that in a service designed organisation the recovery of efficiency must be based not so much on cost reduction, but rather on a rethinking of processes aimed at automating activities with low added value. Maintaining effectiveness in a structure by definition suited to serendipity is a task to which the utmost attention must be paid, because the risk is that the entire organisation gets out of hand and ends up "talking about something else". And it is precisely in the regulatory mechanisms of this organisational "talk" that the solution to the balance between economic needs (efficiency) and experiential needs (effectiveness) lies. The solution to the problems of efficiency and effectiveness is to be found in the creation of a HUB that fuels organisational processes, interpreted as authentic service platforms. Thus defined, the HUB becomes the most efficient place of transit for inter-functional information flows which are completed within the processes that integrate them, giving them the meaning of organisational action. If, in fact, we see the entire organisation as a multilateral market with a high production of externalities, in which the equation Communicate=Organise is valid, the HUB has the function of efficiently distributing the communications and, for this very reason, exercises a fundamental control over the effectiveness of the single processes related to it; in short, the HUB is a platform equipped with artificial intelligence (AI). The reasons that lead to the development and use of an AI platform to activate and manage organisational processes derive from the constitutive characteristics of the platform itself. The first attribute is efficiency, understood both as: 1. Computing power and scalability, both provided by cloud management; 2. Operational speed and ability to handle complexity, guaranteed by native algorithms. In fact, the speed and volume of internal and external interactions are such that, even in relatively simple organisations, continuous support is required (Fig. 3)23. 22 The European House-Ambrosetti, Service data driven, Working Paper for the Service Forum held on 25.10.2017. 23 Gigante, F., IBM® Cloud and Cognitive, Working Paper April 2018.
  • 12. 12 The second feature is the ability to manage the externalities produced by the system. Simply because it works, the organisational ecosystem creates interrelationships and, in communicating, can increase or destroy knowledge. The control of these "lateral processes" lies in the management of externalities. The externalities can be cross side, which in the case in question, are identified with the inter-functional information flows, which pass through the HUB, and which become assets of the process to which they refer (fig. 4), or same side that are constituted by the intra-functional information flows that, passing through the HUB, return to the issuer with an enriched information content (Fig.5). Figure 3. The distribution of requests and the states of attention. Figure 4. The structure of cross side externalities
  • 13. 13 The management of externalities is based on the analysis of the parameters of relevance and attention. The elimination of information redundancies, the broadcasting traffic in the jargon of the networks, is a function of the efficiency of the HUB. In this case, the relevance is given by the frequency of information provided by the organisational function, weighted by the importance of the latter in completing the process; attention is measured by the speed with which the assigned task is performed within the function. Precisely, relevance generates cross side externalities, while attention generates same side externalities. The third element of the HUB is neutrality understood as “when end users on the two sides of the market act independently”.24 This definition allows us underline two important aspects: 1. In the proposed structure the "end users" are not only external third parties, but also, and above all, the components of the organisation. In this context, the new B2C is B2B because the challenge is not to replicate a "Fordist 4.0 model", but to enact25 widespread and shared environments, situations and intelligences. Only in this way can the company organisation become a stimulus for business growth. 2. The independence of actions requires coordination, not coercion. This means that control is much more like organisational maieutics than Sergeant Gerheim's monologue26. What is lost in coordination time is recovered in participation and passion in the performance of the assigned tasks. The fourth component of the HUB consists in the ability to integrate two of the three control orders27 and, precisely those of: - Second order, defined by routine programmes and procedures; 24 Carnevale-Maffè, C.A., Ruffoni, G., Two sided markets: models and business cases, Working Paper, SDA Bocconi School of Management, February 2009. 25 Weick, K. E., Processi di attivazione nelle organizzazioni, in Zan, S., “Logiche di azione organizzativa”, Il Mulino, Bologna, 1998. 26 Hasford, G., Nato per uccidere, Bompiani 1987. 27 Spina, A., Senso e significato nell’organizzazione, UniSalerno, 2006. Figure 5. The structure of same side externalities.
  • 14. 14 - Third order, relating to checks on the underlying premises, representing the point of contact between organisational decisions and the giving of meaning to actions; leaving, and this is an important aspect, those of the first order, relevant to direct supervision, to human intervention.
  • 15. 15 6. The birth of the Cognitive Operation Assistant (COA): a concrete proposal. Based on IBM Watson technology, COA is a dialogue platform that, through the use of natural language, can automatically interact with ERP software using different access methods and different types of devices. COA is, therefore, a concrete HUB proposal, as outlined above, which, through the efficient management of information flows, reduces organisational latency and enacts processes for the dissemination of operational responsibilities from a process and not a function point of view (Fig.6). The COA design premise is to redefine the methods of interaction between Man and Machine, creating an interoperable and open wetware. Figure 6: COA architecture. Currently the areas of COA application have been limited to (Fig. 7): Figure 7: COA skills. To exemplify the operating methods of COA, the case chosen refers to the full return of goods by a customer. The case is interesting because: 1. It involves several functions, in this case:
  • 16. 16 a. Customer care, b. In- and outbound logistics, c. The sales department. 2. it is simple and frequently used, so as not to fall into the exceptionality created “ad usum proprium”. The frequency, then, makes it possible to test the management of the distribution of requests (see fig.3). 3. it is widespread, has scalability requirements and is not inherent to a specific business or sector. 4. It is sufficiently complex to offer long, cumbersome organisational management and communication methods in natural and, therefore, unstructured language. 5. It has a high added value for both the front end (customers) and the back end (structure) of the organisation. 6. It has one or more automated functions. 7. it is interoperable with any complete management system. The platforms used were: 1. IBM® Watson® for the AI HUB, 2. Gnosis®, an ERP on a SmeUp® base for the management software. The archives involved in the process management were: 1. Customer records; 2. Complete and batch-related customer delivery schedule; 3. Finished product warehouse records; 4. Vendor records; 5. Real-time situation of the finished product warehouse stocks; 6. Issued invoice/delivery note archive; 7. Orders to suppliers in progress archive. The analytical operational description of a goods return process is summarised in Fig. 8: Figure 8: Analysis of the full or non-compliant goods return process.
  • 17. 17 The objective of the COA is to make the information flow more fluid. - Respecting all (user configurable) controls, - Interrogating the management system starting from a natural text, - Maintaining the residential uniqueness of the operational archives. In summary, what is shown in Fig. 9 clearly defines the interactions between the COA and the individual functions involved in the process: Figure 9: Interactions between the COA and the management system for request consistency checks. From a wetware point of view, and therefore of the interactions with the user, Fig.s 10 and 11 show the screenshots of the dialogue managed with two different access methods: e-mail and mobile. Figure 10: COA-user interaction by e-mail
  • 18. 18 Figure 11: COA-user interaction by mobile. In closing, all that remains is to try to measure the structural benefits induced by COAs. The following measurements are intended as a first set of quantitative proxies to account for the procedural efficiency and effectiveness of COAs. Here, also due to the lack of consistent surveys, we have not been able to define the parameters relating to organisational impacts. Fig. 12 highlights the results achieved in terms of the correct completion of the process as a whole and, consequently, can be taken as a basis for defining a new set of incentive parameters no longer linked to the correct execution of the function, but to the successful completion of the entire process.
  • 19. 19 Figure 12: Summary of the results obtained with the introduction of COAs.
  • 20. 20 7. Conclusions. All that remains is to try to bring the main points of reflection that emerged in this study back into the system, aware of the fact that it would be unrealistic to even think that we have completely covered the subject. A first consideration concerns feasibility. While examining an apparently simple but widespread process with serious repercussions on the company's reputation, it has been shown that there is the possibility of integrating AI-based protocols and internal management processes. However, having made a concrete case has implications that go beyond the single management and, specifically, allow us to: 1. Imagine an extension to all the different processes already expressed today in natural language; 2. Destructure Man-Machine communication, by moving from system screens, which include a period of training, to natural language interactions, reducing learning costs (increasing efficiency); 3. Develop learning platforms and internal skills, making the steps of "professional knowledge" smoother (increase in effectiveness). A second reflection should be made on the nature of the HUB. Seeing the HUB as an internal chatbot does not fully comprehend its nature as a process combustion which, in the proposed organisational hypothesis, constitutes its fundamental characteristic. Setting up an organisation by processes, rather than by functions, means imagining the company as a multilateral market that, in order to function, needs an efficient communications management platform; that is, a HUB based on AI protocols (fig. 13)28. 28 Gigante, F., IBM® Cloud and Cognitive, Working Paper April 2018. Figure 13: The HUB of a structure organised by processes.
  • 21. 21 The third conclusion, which derives from the above and is typical of a "service design" vision, has the consequence of interpreting organisational interaction as the new frontier of B2C. In fact, being able to set up processes based on highly decentralised coordination mechanisms, trying to interface as much as possible with the complexity of reality, means letting the giving of meaning to organisational action be the work of the structural subsystems and, ultimately, of the individual operators. Just like in the market, where the last arbiter is the customer/consumer. Seeing B2B exchanges as the new frontier of B2C means overturning the key concepts of organisational design, accepting that complexity cannot be reduced to a hierarchically ordered casuistry, but must refer to open solutions governed by individual awareness and responsibility; a concept that, it should be stressed, is different from organisational anomie or anarchy. A fourth point for reflection is related to the organisational approach to processes. Focusing attention on processes rather than functions leads to increased interactions with the external environment, which becomes a subsidiary part of a multilateral market promoted by the organisation itself through the HUB, without falling into self-referentiality (Fig. 4). In other words, it is possible to imagine that the interest of the structure will be to increase the number of processes, involving external third parties (stakeholders in the broad sense) who actively contribute to the continuous improvement of business performance. This step, which is cultural rather than technical, reiterates the need to develop an organisational "Service Design Thinking" that starts from the foundations of the structure and then, following the processes, involves the market. In this sense, extending the competences involved in the various processes becomes the basis for developing an organisational dynamic that is effectively service-oriented, in which the physical product becomes a functional accessory whose value is above all experiential. In other words, it is a matter of becoming aware that a company's performance will also and increasingly depend on the quality of its algorithms rather than on the strength classes of its bolts, the efficiency of which is taken for granted. The integration of AI in organisations can become an element of simplification in the process of approaching a "service” logic. This document aims on one hand to offer an operational contribution, demonstrating that the road is viable, and on the other to stimulate discussion on a topic that, in the opinion of the writer, is one of the most important issues companies will have to deal with in the near future.
  • 22. 22 References 1. Various authors, Ici Service Design Thinking, BIS Publishers, 2017; 2. Arvidsson, A, Giordano, A, edited by, Societing Reloaded, Egea, 2013; 3. Bartezzaghi, E., L’organizzazione dell’impresa, ETAS, 2010; 4. Carnevale-Maffè, C.A., Ruffoni, G., Two sided markets: models and business cases, Working Paper, SDA Bocconi School of Management, 2009; 5. Costa, G., Gubitta, P., Pittino, P., Organizzazione aziendale. Mercati, gerarchie e convenzioni, Mc Graw Hill, 2014; 6. Dominici, P., Comunicazione e produzione sociale di conoscenza: nuovi scenari per le organizzazioni complesse, in “Rivista trimestrale di scienze dell’amministrazione”, Vol. III, 2014, Franco Angeli; 7. Dominici, P., La comunicazione nella società ipercomplessa. Condividere la conoscenza per governare il mutamento, Franco angeli, 2005; 8. Dominici, P., Non solo tecnologia… complessità e imprevedibilità dei sistemi organizzativi, Il Sole24 Nova, 12.08.2015; 9. Fabris, GP., Societing, Egea, 2008; 10.Gigante, F., IBM® Cloud and Cognitive, Working Paper April 2018; 11.Hasford, G., Nato per uccidere, Bompiani, 1987; 12.Kant, I., Critica della Ragione Pura, edited by Gentile G., Lombardo Radice G., Laterza, 2005; 13.Spina, A., Senso e significato nell’organizzazione, UniSalerno, 2006; 14.The European House-Ambrosetti, Service data driven, Working Paper for the Service Forum, 25.10.2017; 15.Turner, F. J., The Significance of the Frontier in American History, American Historical Association, 1893; 16.Weick, K. E., Le organizzazioni scolastiche come sistemi a legame debole, in Zan, S., “Logiche di azione organizzativa”, Il Mulino, 1998; 17.Weick, K. E., Organizzare. La psicologia sociale dei processi organizzativi, ISEDI, Utet Libreria, 1993; 18. Weick, K. E., Processi di attivazione nelle organizzazioni, in Zan, S., “Logiche di azione organizzativa”, Il Mulino, 1998.