The promise of artificial intelligence has started to become reality for many brands and merchants. Personalized recommendations, automated customer service, dynamic pricing, and predictive inventory management are some of the AI-driven programs rolling out at scale.
But we find that the gap between pilot projects and production-ready AI operations is where many companies stumble. Building effective AI operations requires more than just implementing algorithms—it demands a thoughtful operational framework that unites technology, people and process.
It should be no surprise that this framework echoes the best practices of the digital revolution. Many of the principles companies used (and are still using) as they transitioned from spreadsheets to technology are the same ones they will apply to make those digital initiatives more AI-driven.
Start With Clear Business Objectives and KPIs
Don’t deploy AI for its own sake. Before building any operational infrastructure, identify specific business problems that are worth solving. Focus on profit-generating use cases: Are you losing customers to slow support response times? Is inventory turnover creating cash flow issues? Are you struggling to personalize experiences across channels?
Each use case requires different operational considerations. A recommendation engine needs continuous performance monitoring and A/B testing infrastructure. A customer service chatbot requires escalation workflows and quality assurance processes. An inventory forecasting system must be integrated with supply chain operations and vendor management.
Define success metrics upfront. These might include conversion rate improvements, customer satisfaction scores, cost per interaction, or inventory carrying costs. Clear metrics guide operational decisions and help you allocate resources effectively.
Build a Cross-Functional Team
Successful AI implementations require collaboration. At OSF, we help our clients create AI Steering Committees to set and monitor the operational agenda, including policy and process.
We recommend staffing the committee with an AI Lead or Project Manager who can work across stakeholder groups. Committee members should include at least one senior business leader (who can help guide decision-making) and representatives from data science, engineering, product management, sales, finance and operations.
Invest in Data Infrastructure and Governance
AI systems are only as good as the data they work with. Readying operations for AI means creating reliable data pipelines that collect, clean, and deliver information to models in real time or near-real time.
Start by auditing your current data landscape. What customer behavior are you tracking? How is product information structured? Where do gaps exist? Common issues include inconsistent product categorization, incomplete customer profiles, and disconnected data sources across channels.
Implement data governance practices early. Define data ownership, establish quality standards, and create processes for handling customer privacy and consent. These aren't just compliance requirements—they're operational necessities that prevent model degradation and maintain customer trust.
Design for Human-AI Collaboration
The best AI operations recognize that humans and machines have complementary strengths. Design workflows that leverage both effectively.
For customer service, this might mean AI handling routine inquiries while routing complex issues to human agents with relevant context. For merchandising, AI might suggest product bundling opportunities while humans make final decisions based on brand strategy. To avoid the duplicate contact records that can vex sales teams, AI flags suspected duplicates while human analysts investigate and recommend the best way to de-dupe.
Build interfaces that make human oversight practical. Agents shouldn't need to understand machine learning to work effectively with AI systems. They need clear explanations of why the AI made certain decisions and simple ways to provide corrective feedback.
Implement Continuous Monitoring
AI models degrade over time as customer behavior shifts, products change, and market conditions evolve. Operational excellence requires continuous monitoring and regular retraining. And make sure to document and share information about interventions and their outcomes.
Establish dashboards that track both technical metrics like prediction accuracy and business metrics like revenue impact. Set up alerts for anomalies—sudden drops in confidence scores, unexpected shifts in customer segments, or unusual patterns in recommendations.
Create a regular cadence for evaluating your models. Some teams review performance weekly, others monthly. Fashion commerce companies might need more frequent updates than industrial supply businesses.
Plan for Scale and Iteration
Start with one well-defined use case. Trying to implement AI across an entire operation at once is a recipe for operational chaos.
As you scale, invest in automation for repetitive operational tasks. Model retraining, performance reporting, and data quality checks should become increasingly automated, freeing your team to focus on strategic improvements and new applications.
Building AI operations is a journey. The companies that succeed treat it as an ongoing operational capability, not a one-time technology project. With the right foundations—clear objectives, cross-functional collaboration, solid data infrastructure, thoughtful human-AI workflows, and continuous improvement—AI becomes a sustainable competitive advantage rather than a perpetual experiment.
