AI Success Needs Tangible Return on Investment

In today's rapidly evolving business landscape, AI is expected to become a game-changer, promising to revolutionize nearly every sector. A recent Deloitte survey showed that 94% of business executives believe that AI is key to their organizations’ success.

While AI is by no means a new technology, the recent surge in generative AI tools has opened up people’s imagination to the technology and its enormous potential. However, to truly unleash the power of AI, organizations need to invest wisely. This requires defining a clear return on investment (ROI) framework. Without it, even the most promising AI initiatives may fail to secure the necessary support for buy-in and implementation.

Vision of Success

Accurate ROI forecasting is key to achieving business success. It’s how organizations estimate long-term profitability and decide where to allocate resources. Communicating these projections effectively is also crucial for gaining buy-in from external stakeholders. Keep in mind that realizing ROI from your AI initiatives is not immediate. It takes six months to one year to see real ROI which is why many companies opt for AI pilots with vendors using one-year contracts.

Businesses are bombarded with the message that AI is not just a ‘nice to have’ accessory but a critical component of a digital transformation strategy. However, until the long-term financial benefits become clear, the investment remains a tough sell. For some, the temptation is to wait and see how others fare with their AI programs but the risk of lagging behind the innovation curve is substantial. Others are taking the opposite approach, making purchases to place them ahead of the pack but ending up with solutions that do not meet their needs effectively.

Related:AI for Customer Support Can Help Build Trust

Predicting AI ROI

To predict the ROI of AI, teams must start by setting out a clear and realistic roadmap for how business goals can be achieved through AI. Next, they should look to identify tangible metrics and KPIs against which to track these goals. Increased productivity, cost savings and revenue generation are obvious ones but there will be others more specific to the business and function. Essentially, quantitative data should be gathered on the chosen metrics before rollout and at regular intervals afterward.

It's also important to consider the long-term impact of the investment. This includes assessing not only the price of AI implementation but also the ongoing operational and maintenance costs which can involve training and potentially hiring new staff.

Related:Generative AI Promises Self-Healing Code

To optimize the ROI of AI, businesses must commit to regular performance reviews for each new AI initiative, continuously refining their approach based on both quantitative data and qualitative feedback. By fostering a culture of constant improvement and innovation, organizations can unlock the full transformative power of AI. Once the value of AI becomes clear, it will be a far easier task to encourage AI investment and growth.