AI (Artificial Intelligence) is a technology that most people think they are aware of, encompassing many processes, technologies, and functions. This makes it difficult to pin. Moreover, it doesn’t fall into the one-size-fits-all segment. Having said this, to evaluate if AI is an investment or an expense, the benefits ought to outweigh the cost.
Adapting AI is a step you take today to ensure smooth functioning in the future. However, it’s undeniable that the benefits may accrue at an unspecified time in the future.
A sneak into Artificial Intelligence as technology
AI is a suite of technologies that entails predictive power and exhibits a degree of autonomous learning. The duo eventually advances our ability to:
- Anticipate future events
- Recognize patterns
- Communicate
- Make better decisions
According to a survey report shared by McKinsey, 63% of participating enterprises noticed an increase in revenue after adopting AI. In addition, the same report unveiled 44% cost reduction across organizations that have adopted AI.
Simultaneously, another report by IDC revealed that 28% of artificial intelligence initiatives failed. The report covered 2000 IT decision-makers and leaders from various enterprises.
Under both scenarios, the results were dependent on various factors. Acknowledging this, before evaluating AI as an investment or expense, it’s important to list the gains you expect. A few questions you must consider before adopting AI should include:
- Will you have to upgrade your current infrastructure to integrate AI/ML?
- What impact will inflation have on your future returns?
- Will it impact your taxes upon purchasing new assets or hiring fresh talent?
- What opportunities do you have in context to using time, capital, and resources?
Role of AI in various industries
Did you know that one of the leading Coffeehouse and roastery chains, Starbucks uses Machine learning to excel in the market? Unfortunately, I didn’t until I came across a use case that elaborated the same and how the brand uses the technology.
Backed by its dynamic and powerful subset Machine Learning, AI can yield profound and proven results. Over the years, it has commendably benefitted numerous organizations, including but not confined to entertainment, retail, logistics, hospitality, travel, medical, etc.
The chart above portrays companies planning to or have incorporated AI to an extent. While most have started implementing AI, promising figures portray positive results attained with AI. But that’s something we have consistently learned through various mediums.
The question is, will AI benefit your business? To find an answer to this, let’s find out:
How to ascertain if AI/ML is an investment or expense for you?
Spending can be called investment or expense based on the ROI (Return on Investment) it provides. Now, ROI depends on different aspects when you are talking about AI and ML. But, considering the same, it can be captured by closely analyzing some of the soft and hard returns.
While soft returns refer to broader benefits, focusing on employee satisfaction and retention, hard ROI is quantifiable and refers to the basic dictionary definition of ROI.
When we talk about AI and its returns, numerous sources can attain hard ROI. The list includes:
Time savings
By automating intelligence, you can surpass the hassle of repetitive manual efforts, for example, invoice processing. Doing this will help you reduce manual efforts and save you time and the resources required to complete it.
Increased productivity
AI can help you do faster execution of tasks through assisted intelligence. It enhances human decision-making that will eventually enhance the productivity of your employees. By integrating AI into your business process, you can allow your resources to make better decisions in less time.
Cost savings
With reduced time and enhanced productivity, you can subsequently lower your costs. For example, you digitized the data entry process, which will help you save the cost of the employees required to do the task. Also, you may choose to assign equivalent or another doable task, which will further enhance productivity. Subsequently leading to more work at the same time.
Increase in revenue
With Augmented and Assisted intelligence aligned, you have the scope to add new services under your badge. This won’t just increase your customers; you’ll also have a broader scope to increase their willingness to pay more for your additional services.
With the aforementioned hard returns, you can also expect some soft returns from artificial intelligence. The list includes:
Better experience
Augmented and assisted intelligence is known to avail personalization. This eventually will serve a better customer experience. Though this can’t be exactly monetized, you can still make a difference in your sales, customer retention, order per value, and market goodwill. Most startups have managed to sustain in the market, if not grow, only by delivering a better customer experience.
Agility
You might at some point feel that your AI projects aren’t yielding any or expected benefits. However, exploring AI projects can further help you develop the new capabilities of your team. This agile approach will allow you to further enhance your team’s potential and eventually attain the desired results with the correct data and smart algorithms.
Concluding Note
Upon closely analyzing the reports, use cases, and expert opinions, you can ascertain that AI is undoubtedly an investment that can reap your impeccable results over the long run. However, you can’t oversee the basic considerations required while adopting the technology. If you do not have the skills or team of technocrats, it’s always advisable to go with a solution provider.
With advancements in technology, numerous known brands have started AI assistance services. Also, you can find startups building tools to help you onboard an AI solution for your business. All you need is a well-researched approach.
