That Artificial Intelligence has been a major game changer is a self-evident truth. After all, it has inspired a whole new industrial revolution of its own. The fourth industrial revolution (or Industry 4.0) has been built on the back of cutting-edge technologies, a list in which AI finds a major mention. So, in terms of transformative impact, AI is no less than what the steam engine was for its time or what the rise of computing represented in the 1960s.

We are increasingly seeing diverse applications of AI, and its widespread proliferation in almost every aspect of our lives. To the extent that we don’t even include smartphones without an AI capability of some sort in our purchase consideration set now. Every single major technology corporation is offering embedded AI for various business and personal applications. It is almost ubiquitous as a concept and its real-world application today.

However, to date, AI implementations in the enterprise have been largely limited to micro-impact. These implementations have mainly been in the form of chatbots or personal productivity tools. These are useful but, in my opinion, don’t do justice to the power and potential of this game-changing innovation. AI tools, still in the infancy of their application in organizational contexts, are yet to deliver material business impact at scale. Today, they assist individuals but don’t yet transform how work gets done.

All of this is at the cusp of changing. And driving this change will be the rise of AI agents, digital “colleagues” that can perceive, decide, and act autonomously. Unlike chatbots, agents are goal-driven, collaborative, and capable of executing tasks end-to-end, across systems and workflows. The introduction of AI agents is poised to significantly alter a paradigm that has been in play for over 30 years now: that we have been customizing our enterprise applications to improve efficiency. i.e. do more with fewer people.

With AI agents, this concept of reducing manpower to improve efficiency flies out of the window. To enhance efficiency, we can now have more workers, potentially an unlimited number, except that these will be digital coworkers. As this change comes into play, we will need to redefine our understanding and typical methods to calculate “efficiency”.

Today’s formula for this calculation is: Efficiency = Revenues / Human FTEs.

As we introduce AI agents into the mix, the formula changes to: Efficiency = Revenues / (FTE + aFTE) where aFTE = AI Full-Time Equivalent.

This will not be an easy change. It will have its complexity because the transition will not be just about introducing these agents. It will also be about making enterprise applications agent-friendly. Enterprise applications across practices and functions will need to become reliable and autonomous, beyond just being configurable, as they currently are. And this will be a multifaceted process involving technology migration, change management and widespread user acceptance. 

This isn’t going to be an overnight transformation, but it’s coming fast. And companies that learn to deploy and manage AI agents at scale will unlock a new era of productivity.