Systems for Business: How Intellectual?

Whenever intellectual systems or artificial intelligence are mentioned, mass consciousness brings forth an array of associations.
These mainly come from Hollywood junk movies.
Some real technological things will also be remembered, like the Turing test or the IBM W atson winning at go.​

But Ultima works for real business, which entitles us to put the question point-blank.
The query is blunt and down-to-earth: how can the achievements of cheating a panel of five persons whose competence is uncertain – or playing a profoundly Chinese game of stones – help a specific business earn more money? ​

This is not a loaded question.

And the obvious answer is correct, too.

An abstract intellectual system will evidently bring a business extra profit ONLY if it helps drastically reduce its need for human resources (of course without reducing the quantity and quality of its products).

The additional profit will result from reduced labour costs.

On we go. 
In block-busters, ‘artificial intelligence’ behaves human-like. It talks and displays emotions or something similar, an individual character, wishes and dreams, and can even cheat: ‘see what technology can do now!’ and all.

However: any real office swarms with this sort of strikingly human-like robots.
And the achievements of this genuine ‘intellect’ (without any reservations), neutrally termed ‘human factors’ in business practice and accident investigations, make business owners and top managers clutch their heads.

Business system operators need not pay for consciousness. Instead, they would eagerly pay to get rid of it.

So a real business needs no ‘artificial intellect’ that equals human one (and will consequently behave quite the same way). Moreover, it needs the opposite: a system with human functionality but lacking the free bonuses of natural intellect – such as emotions, fatigue, burn-out, diseases, forgetfulness, and theft.

A system not second to man in terms of functionality (required for business logic implementation) but dramatically superior in terms of reliability, discipline, and service availability.

This is our definition of
intellectual systems for business.

Ultimate IEM systems work with business processes in their entirety (a.k.a. value creation chains).

Let’s cite the example of goods procurement for a retail chain’s distribution warehouse, as one of the simplest, shortest and most illustrative business processes.

At its upper level, it looks as follows:

• an employee in charge (category manager) decides that Goods Item A must be purchased (Needs Formulation stage);
• (the same or) another employee chooses a supplier and agrees upon the price, quantity, and date of supply (Order Placement stage);
• the goods ordered arrive at the distribution warehouse, in the acceptance area, where they are accepted with their quality/quantity checked (Acceptance stage);
• the processed goods are distributed into their storage locations (Pigeon-Holing stage).

While traditional ERP systems usually process each stage in an independent ‘module’ (business communication among the employees bypasses the ERP system or is absent altogether) and different modules’ result do not always match, in Ultimate IEM systems each employee is at his/her own stage of the virtual conveyer – that very value creation chain that constitutes the holistic business process.

The category manager forms a Goods Required document in the system that passes into the procurer’s responsibility area (the Order Placement conveyer stage) once the CM’s work is over.

At his respective conveyer stage, the purchaser uses the system’s tools to turn the Goods Required document (purchasing assignment) into the Order from Supplier document(s). Here the exact quantities, prices, supplier(s) and shipment dates are already known. After completing his work, the purchaser transmits the order documents created to the warehouse acceptance personnel, turning them into Receipts Expected documents – prototypes of the future receipts note.

After the goods arrive at the warehouse, the acceptance inspector compares the supplier’s waybill with the information in Receipts Expected and with the goods actually delivered. After processing the discrepancies (if any), he corrects the Receipts Expected  document in accordance with the goods being actually accepted – their quantity, stock numbers, and prices. Then he presses the Accept button to convert the Receipts Expected  into Pigeon Holing and to forward the goods into the conveyer stage of the same name, to the storage area personnel.

Depending on how complicated the specific warehouse’s storage scheme is, there may be more stages, but anyway the chain will end in the conversion of Pigeon Holing into Goods Receipt, with the new arrivals replenishing the inventory available for sale.

The conveyer-like principle of the reflection of real-life business processes in the system – as they exist in reality (rather than in the soaring fantasies of all sorts of spongers however much they may be paid for nothing) is already a giant leap forward as compared to the real practical impotence of modular ERP systems.

But this is only the beginning.

Let us return to our example of the purchase business process, and look at the people involved.

Starting from the category manager who forms the goods required list.

Why is a CM needed for this at all?

If we come to think of it, his work rules can be described by a (possibly) long but generally straightforward algorithm: goods that have a sales history are purchased in accordance with their rate of sale. New goods are taken ‘on a trial basis’, in varying quantities depending on the popularity of their goods category and on the new item’s price and consumer interest.
And that is all; we no longer need the costly category manager (who will steal ten times as much): all his functionality is performed by a cold, error-free and tireless system far better than he can do it himself. ​
And these are not promises for a distant future: it already worked this way yesterday.

Then: the purchaser. 
Exactly the same, but the substituting algorithm is even simpler: buy where the price is lower (or the set of parameters is better: a sale proposal’s final weight takes into account the payment deferral time, rate of supply, warranty loyalty, and so on).

The purchaser is not needed, either: we make a supplier exchange and are sure to get better prices, now that the human factors’ theft and faults are ruled out.

And if your business is not yet cool enough to keep suppliers frequenting your b2b floor, the managing system will form suppliers’ proposals on its own, by importing prices and inventories from Excel price lists (catalogues on websites, and external trade floors like Yandex.Market).

As a result, any position whose job description / process chart can be described by formal rules is fully automated in Ultimate IEM systems.

If we return to the analogy with a motor works assembly line, the Ultimate managing system replaces the person attached to a conveyer section with a specialized robot whose managing software is based on its preceding human position’s job description.

A competent sceptic will ask: what keeps us from programming the same robots in ordinary ERP systems and automate business processes in a similar style?

Fundamental architecture factors, dear reader...

A traditional ERP is a set of loosely connected modules, actually separate programmes that implement their fragments of functionality. The purchaser works in the CSM module; the warehouse, in the WMS module; the call centre, in the CRM module; the production units, in the MES module, and so on.

An ERP system tears the purchase business process (like any other), that is unified in real life, into pieces corresponding to its own modules – interconnected via delayed data exchange procedures. 
Each participant in the process can only see his own module’s data (which usually DIFFER from those in other ‘modules’); and real-time transactions are out of question.

Operationally, a classical ERP is a hindrance and an anchor: it is UNABLE to provide participants in the value creation process with useful data in real time.
On the contrary, an ERP is essentially an additional object for manipulation that requires employees to type in data IN ADDITION to their primary duties.

On the contrary, Ultimate managing systems are an organizing core, a drum that sets real-time pace and a limit on the degrees of freedom of the business processes being actually executed.
An intellectual enterprise management system is a living organism, while an ERP is its dismembered body with each part connected to its own life support system and the blood being driven by external pumps through connecting plastic tubes at the supervising physician’s command.

Conveyer robots that substitute humans in the Ultimate IEM systems can process the intermediate results of the holistic business process and modify them to influence the progress of the business process and the status of the system/enterprise as a whole; but what can a similar robot do if limited by the fragments of functionality allotted to a classical ERP module?

Can it intricately process any data that was typed in manually (and retroactively, if at all)?

Even if these manipulations are useful in theory, in practice they are not worth a whoop for lack of real-time processing capability.
The excavator, the result of the assembly business process, may have been shipped to the buyer three weeks ago. 
The spoon may be good and dear (it is usually not), but the lunch will be over anyway.

In addition to the ‘robots’ at conveyer stages (automatically executed scripts for business process phases), Ultimate systems can formulate the system’s script responses to arbitrary events.
Which is utterly impossible in an ERP for lack of a system as such. A herd of modules cannot react as a single organism.

Each Ultimate robot is not very ‘clever’ itself.
But – a high concentration of these in a system that is in operation (thousands and tens of thousands of individual scripts) combined with a single information field generate an effect that can be compared to the collective intelligence of social insects.

Take the ants, for example: each ant itself is rather a primitive animal.​

But, united into a thousands-strong community and guided by a set of pheromones (much simpler than the possibility space of the management actions and responses of an IEM system), they demonstrate quite a serious collective intelligence that can organize complicated societies and build large-scale material structures.
The robots, or Ultimate automatic scripts, can be compared to the simple nerve knots of individual insects.

Starting from a certain level of script complexity and co-ordination, the whole system acquires elements of intelligent behaviour in the context of response to changes in its external conditions.

Human brain is nothing but a cluster of trillions of elementary nerve knots (each consisting of one nerve cell, a neuron) that interact in a sophisticated manner.
We believe the emergence of consciousness to be a jump effect that manifests itself spontaneously after a certain density of inter-neuron interactions is reached. 
It’s like the critical mass in nuclear physics: if a ball of uranium weighs less than 50 kg, all is quiet. If more, we get a nuclear blast.

The Ultimate intellectual systems’ difference from human brain is mainly quantitative: thousands versus trillions.
True, each Ultimate nerve knot is far smarter than an individual human neuron.

And, secondly, at their current baby level of development, IEM systems CANNOT learn yet.
Which is a deficiency – as regards conformity to the widespread stereotypes.
But: the other side of the inability to learn is guaranteed execution of instructions.

And which of these mutually exclusive features is more important for e.g. a comptroller will be left as a rhetorical question for top managers to answer.

Let us return to business and to its main task concerning intellectual systems: to get rid of the ‘supreme value’ – namely, natural intellect bearers.

Seasoned by decades of marketers’ chatter about new supernova ‘solutions’ that have never solved anything, our reader will make a sceptical remark that many positions cannot be replaced with a set of scripts that run automatically.
And that in fact most can’t.

And this is NOT the case.
Let us recall a pre-requisite of the operational excellence of any business: the standardization of business processes.
At any enterprise, it ultimately results in the distribution of all employees into three groups:

While the third group mostly comprises spongers to be fired, the creatives’ numbers are usually much overstated due to insufficient depth of standardization.

There is no doubt that a poet or an artistic designer will remain a creative. At least until the advent of full-fledged AI comparable to human one.
But why bother? There are 8+ billion on Earth.
And as for others...

Ultimate IEM systems automate, inter alia, purchase, pricing, online advertising management, assortment management, goods distribution within the chain, sales, mutual settlements with vendors for marketing activities, loyalty program processing, contractual relations management, warehouse management, delivery management, fixed and non-current asset management, costs budgeting and projection of sales and the cash flow budget, cash flow management - from incoming payment processing to automatic payments to auppliers of goods and services, formation of management statements and lots of other things.

If consistently used, an intellectual enterprise management system reduces the thousands-strong administrative apparatus of a big enterprise (no matter what kind of business it does) to several dozen – or just a few persons.

But we haven’t yet discussed the grass-root workers.

Those very live people staffing the assembly lines, farm machine operators, warehouse men, and truck drivers at the wheel.

But technology is advancing here, too; factory workers will be replaced with robots that are getting cheaper, both tractor and long-haul truck drivers are already being replaced with autopilots, and even odd-shaped goods processing at warehouses has seen spectacular gains, if we believe the Amazon demo videos.

As the respective technology solutions become widespread, they will be placed under the unified IEM system’s control just like it manages warehouse WMS terminals or ATMs now.

The future is much nearer than we all think.