The CFO AI Trilemma: Cut Costs, Accomplish More or Both
Analyst Perspective
We’re quickly approaching the moment when it becomes clear that artificial intelligence (AI) and generative AI (GenAI) will not be free. As that happens, we will discover who’s willing to pay how much and for what. After nearly 18 months of unlimited use-case fantasizing, it should be obvious that not all the potential applications of AI can be realized over the next three to five years because they fail a cost/benefit test. In theory, AI’s potential is almost limitless, but so far, little thought has been paid to how the economics will play out. The issue of AI costs is important because even uses that are technically feasible will be passed over if buyers find them more costly than they are worth. Business software providers, especially those serving the technology-hesitant office of finance, will need to correctly anticipate the market willing to pay for AI when making their investments. Software buyers will need to consider the current and future ability of a software provider to offer reliable AI-infused capabilities that address their requirements at a price they’re willing to pay. Cost/benefit analyses will have a strong influence on how businesses structure their strategic and tactical approaches to AI and therefore how demand for AI — especially AI for business purposes — is likely to play out in the market.