Individual AI projects can succeed with ad-hoc approaches. AI at scale cannot.
When AI moves from pilots to production, from one team to many, organizations need:
The operating model is what makes AI scalable, sustainable, and safe. Without it, you get fragmented efforts, duplicated work, inconsistent quality, and ungovernable risk.
Three primary patterns for organizing AI capability:
Model 1: Centralized (Center of Excellence)
Model 2: Federated (Hub and Spoke)
Model 3: Hybrid (Matrix) (Recommended)
| Factor | Favors Centralized | Favors Federated | Favors Hybrid |
|---|---|---|---|
| AI maturity | Low | Medium-High | Medium |
| Org size | Small-Medium | Large | Medium-Large |
| BU diversity | Low | High | Medium |
| Talent availability | Scarce | Available | Mixed |
| Regulation intensity | High | Low | Medium |
For most enterprises starting their AI journey, a CoE is the right foundation:
| Decision Type | Who Decides | Who Advises | Who Executes |
|---|---|---|---|
| AI strategy & vision | Executive sponsor | CoE, BU leaders | CoE |
| Investment allocation | Steering committee | CoE, Finance | BU leaders |
| Standards & policies | CoE | Legal, Security, Risk | CoE |
| Use case approval | Tiered (see below) | CoE, Risk | BU teams |
| Vendor selection | IT + CoE | Procurement | CoE |
| Incident response | CoE + Risk | Legal | Response team |
Tiered Use Case Approval:
| Tier | Risk Level | Approver | Review Requirements |
|---|---|---|---|
| 1 | Low (internal, non-critical) | Manager | Self-assessment |
| 2 | Medium (customer-facing, review) | CoE | CoE review |
| 3 | High (autonomous, sensitive) | Steering committee | Full governance review |
As AI matures, the operating model evolves:
Stage 1: Seed (0-6 months)
Stage 2: Grow (6-18 months)
Stage 3: Scale (18-36 months)
Stage 4: Pervasive (36+ months)
| Factor | Description | Warning Signs |
|---|---|---|
| Executive sponsorship | Active, visible support from C-suite | AI buried in IT, no strategic priority |
| Clear ownership | Unambiguous accountability | "Everyone's responsibility" = nobody's |
| Funding model | Sustainable investment approach | Project-by-project begging |
| Talent strategy | Build, buy, borrow plan | Always short on skills |
| Change management | Systematic adoption approach | Tech deployed, nobody uses it |
A complete AI operating model addresses five dimensions:
1. Organizational Structure
2. Governance & Decision Rights
3. Talent & Skills
4. Processes & Practices
5. Technology & Platforms
Core CoE Functions:
1. Standards & Governance
2. Platform & Tools
3. Expertise & Consulting
4. Enablement & Training
5. Innovation & Research
AI OPERATING MODEL CANVAS
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
ORGANIZATIONAL STRUCTURE
┌──────────────────────────────────────────────┐
│ Model: [Centralized / Federated / Hybrid] │
│ CoE Size: ___ FTEs │
│ Embedded Teams: ___ │
│ Reporting Structure: ___ │
└──────────────────────────────────────────────┘
GOVERNANCE │ TALENT
┌────────────────────────────┼────────────────────────────┐
│ Executive Sponsor: ___ │ Key Roles: │
│ Steering: ___ │ • ___ │
│ Approval Tiers: ___ │ • ___ │
│ Policy Owner: ___ │ Build/Buy/Borrow: ___ │
└────────────────────────────┼────────────────────────────┘
PROCESSES │ TECHNOLOGY
┌────────────────────────────┼────────────────────────────┐
│ Project Delivery: ___ │ Platform: ___ │
│ Quality Assurance: ___ │ Standard Tools: ___ │
│ Knowledge Sharing: ___ │ Data Infrastructure: ___ │
│ Incident Response: ___ │ Vendor Policy: ___ │
└────────────────────────────┴────────────────────────────┘
METRICS & ACCOUNTABILITY
┌──────────────────────────────────────────────┐
│ KPIs: ___ │
│ Review Cadence: ___ │
│ Value Reporting: ___ │
└──────────────────────────────────────────────┘
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Context:
Part 1: Choose Your Organizational Model
Given the context, select and justify:
ORGANIZATIONAL MODEL CHOICE
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Selected Model: □ Centralized □ Federated □ Hybrid
Rationale:
_________________________________________
_________________________________________
_________________________________________
Key Considerations:
•
•
•
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Part 2: Design the CoE Structure
CENTER OF EXCELLENCE DESIGN
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Reporting To: _________________________
Core Team Roles:
| Role | FTE | Responsibilities |
|------|:---:|------------------|
| | | |
| | | |
| | | |
| | | |
Year 1 Focus Areas:
1.
2.
3.
Year 1 Deliverables:
1.
2.
3.
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Part 3: Define Governance
GOVERNANCE STRUCTURE
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Executive Sponsor: _________________________
Role/Authority: _________________________
Steering Committee:
Members: _________________________
Frequency: _________________________
Authority: _________________________
Use Case Approval:
Tier 1 (Low Risk): _________________________
Tier 2 (Medium Risk): _________________________
Tier 3 (High Risk): _________________________
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Part 4: Plan the Evolution
OPERATING MODEL EVOLUTION
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Stage 1 (Year 1):
Team Size: ___
Focus: _________________________
Key Milestones:
•
•
Stage 2 (Year 2):
Team Size: ___
Focus: _________________________
Key Milestones:
•
•
Stage 3 (Year 3):
Team Size: ___
Focus: _________________________
Key Milestones:
•
•
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Congratulations! You've completed the AI Operator Academy curriculum.
Your journey:
What's next:
The field is moving fast. Keep learning, keep experimenting, and keep building.
You've reached the end of this module. Review the checklist below to ensure you've understood the key concepts.