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Strategy Dec 5, 2024 5 min read
ROI of AI: Measuring Business Impact
A framework for calculating and maximizing return on AI investments.
Investing in AI is not just about technology; it's about business value. Calculating the ROI of AI initiatives requires a clear framework that goes beyond simple cost savings.
Defining KPIs
Start with clear Key Performance Indicators (KPIs). Are you looking to reduce operational costs, increase revenue through personalization, or improve customer satisfaction scores (CSAT)?
The Cost of Inaction
Consider the competitive disadvantage of not adopting AI. In many industries, AI is becoming a baseline expectation, not just a differentiator.
Long-term Value
AI models often improve over time. Factor in the compounding value of data network effects where your system becomes smarter and more valuable the more it is used.