As Artificial Intelligence (AI) rapidly evolves, CFOs play a crucial role in evaluating its cost, value, and feasibility.

To Begin With, A CFO Must Understand AI’s Unique Attributes

Three Important Attributes of AI

• Learning and Adaptation: AI systems continuously improve as they process more data, making them more efficient and accurate over time.
• Data Dependency: The effectiveness of AI relies heavily on the quality and volume of data it processes. Proper data management is crucial for AI success.
• Wide-ranging Impact: AI can significantly affect various aspects of a business, from operational efficiency to customer engagement and strategic decision-making.

Items To Consider Prior to Investing in AI

• Cost: The initial investment in AI can be high, covering infrastructure, software, and talent acquisition. Ongoing costs for data management and system updates add to the financial burden. This does not mean it is not worth it when considering ROI, but the investment can be significant in infrastructure and talent.
• Resource Intensity: AI systems are server-intensive, requiring robust computing power and storage solutions. This demand can strain existing IT infrastructure and necessitate upgrades.
• Ethical and Privacy Issues: AI’s ability to process vast amounts of data raises concerns about data privacy and security. Ensuring the ethical use of AI involves addressing biases in algorithms and maintaining transparency in decision-making processes.
• Integration Challenges: Integrating AI with existing systems can be complex and costly. It requires careful planning and coordination with IT departments to ensure seamless operation.
• Talent Shortage: Implementing and managing AI requires specialized skills. The shortage of qualified AI professionals can hinder the deployment and effectiveness of AI initiatives.

What Business Problem Is AI Solving?

Understanding the specific problem AI addresses ensures the initiative aligns with strategic goals. It’s essential to clarify how AI will integrate into the broader strategy. It is also important to question whether another technology will do the same at a lower cost. For example, BI or PowerBI, if you are a . NET-based company, may have all the features you need at less cost. In other instances, simple coding can pick up manual tasks and route information correctly. This is certainly not an alternative to the added benefits of AI. Still, in many cases, it does what is needed to stay ahead of the competition and solve the issue in a way that can be maintained and supported with the infrastructure, one proven senior consultant, or FTE with experience, and the team available to you currently.

Question to Ask: What specific business challenges or opportunities will this AI solution address, and how will it integrate with our overall strategy?

What is the Expected ROI?

Assessing the financial impact, including cost savings and revenue enhancements, is crucial. CFOs need to balance short-term costs with long-term benefits to ensure positive financial outcomes.

Question to Ask: What are the projected cost savings, revenue enhancements, and efficiency gains from this AI implementation?

What Data is Required and How Will It Be Managed?

AI relies heavily on data. Understanding data type, volume, and management is vital for successful deployment and ongoing performance.

Question to Ask: What type and volume of data are necessary, and what are the plans for data collection, storage, and governance?

How Will the AI System be Integrated with Existing Infrastructure?

Seamless integration with current systems maximizes efficiency and minimizes disruption. This requires careful planning and coordination with the IT department.

Question to Ask: How will this AI solution integrate with our existing IT infrastructure and workflows?

What are the Risks and How Will They be Mitigated?

Identifying and managing risks, including data privacy, security, and ethical considerations, is essential for the responsible deployment of AI.

Question to Ask: What are the primary risks associated with this AI initiative, and what measures are in place to address them?

What is the Plan for Maintenance and Scalability?

AI systems need ongoing maintenance and should be scalable to adapt to future needs. This requires a clear plan for updates and scalability.

Question to Ask: What are the plans for maintaining, updating, and scaling the AI system over time?

How Will Success Be Measured?

Defining clear metrics for success helps evaluate the effectiveness of AI initiatives and ensures they deliver expected benefits.

Question to Ask: What key performance indicators (KPIs) will be used to measure the success of this AI project?

What Skills and Resources Are Needed?

Assessing internal capabilities and identifying the need for additional skills or resources is crucial for the effective implementation and management of AI.

Question to Ask: What skills and resources are necessary for the implementation and ongoing management of this AI solution?

What is the Ethical Impact, If At All?

Considering the ethical implications of AI, such as bias, transparency, and accountability, ensures responsible and fair use of AI technologies. Make sure to include Legal.

Question to Ask: How will ethical considerations be addressed, and what frameworks are in place to ensure responsible AI use?