The AR Department ...(like HR but with an A)

The AR Department

Agentic Organizations in Phase II-III (see the Agentic Organization blog) will encounter challenges related to resource allocation, costs, and coordination of their AI Agents. As Agents become integral to daily operations across various processes and departments, governance issues will emerge, including attitudes of Agents, data access, system access, Human-In-The-Loop (HITL) involvement, monitoring, costs, reasoning, and more. In Phase I, it is natural for organizations to depend on their Digital Transformation Organizations or AI Competence Centers to understand, develop, and deploy Agentic AI. However, moving into Phase II, organizations will need to establish an Artificial Resources (AR) department.

It is crucial for C-Level executives to recognize that AI is a powerful, generative and expensive resource that should not be confined to Digital or IT departments alone. The impact of Agentic AI will be significant on employees, the organization’s operations and culture. AI Agents will get organized into multi-agent systems (collection of AI Agents that aim to execute a process) and eventually connected to Agentic Supply Chains (collection of AI Agents aim to execute processes with trusted 3rd parties). But beyond revolutionizing the processes, AI Agents will have a profound impact on organizational structure (mix model of AI Agents and Humans), culture (how will the AI Agents behave, what will be their norms?)  and cost structure (Human vs. AI Agent, Insource vs. Outsource).

The AR department should have clear mandates on AI strategy, capacity, costs, organizational design, and results expected from the Agentic Processes. The AR department will ensure that operations are designed with AI considerations in mind and will collaborate closely with HR to manage the impacts on employees (shifting from +AI to AI+). Additionally, the AR department will set the AI Governance as to oversee the orchestration and effectiveness of the AI Agents. This department will also align with business units regarding new data utilization by AI Agents and their application. Work closely with the IT department as to ensure that applications and cloud services operate efficiently to execute IPA- Intelligent Processes Automations. And,  in some services heavy industries (e.g. utilities) the AR department should also collaborate with the Product Management teams to innovate new products and services, facilitate scaling, and enhance overall consumer experience.

The AR Lead should be a senior professional that will be part of the C-Suite that will work closely with other executives, especially with COO and HR. Given AI's profound influence on all business aspects, its management should be central to the agendas of CEOs and Boards. The AR Lead will be a change agent that should deeply understand the business to be transformed as well as the technological capabilities. A CEO or a COO should work with the AR Lead and HR Leads as to design the organization of their future with a mix of Human and Artificial Resources. These roles should have a common vision, strategy and a roadmap on how to get there. Change should be controlled in such a way as to ensure organizations will rip the benefits of Agentic Organizations while maintaining the critical human resources empowered!

The AR department should not function as a "cost center". Instead, it should have mandates for revenue-generating and cost cutting activities. Key Performance Indicators (KPIs) such as sales cycle time, lead-to-opportunity conversion rate, ticket response times, response quality, cost per transaction and utilization metrics should be the objectives of the AR department. Utilizing Process Mining, the AR department can identify areas for improvement in critical processes and take the ownership to automate them.

But how should companies start? Regardless of the organization evolution, all companies embarking into the Agentic AI journey must set clear job descriptions for their AI Agents. In the same way as humans, AI Agents will need to have objectives with KPIs, access to tools and data, tasks to accomplish and control mechanism . A template of a job description is the following:

Job Description of an AI Agent

This Agent job description encourages companies to consider their desired Agent behaviors as well as the expected return on investment (ROI). Over time and as AI Agents become part of the normal operations, it is advisable for the AR department to collaborate with the HR department to create new job descriptions for the employees that will incorporate the role of AI Agents as well.

And a final word, both the AR and HR departments should take ownership of change management programs. The impact will be huge on people that will need to adapt to an environment where having the best knowledge or skills will make them the best employee.. These programs will be essential for companies to plan and execute thoroughly over many years to adapt to this Agentic World.