Tavant’s Sundeep Mathur–Capturing the ROI from AI: Are You an Eagle, an Ostrich, or an Owl?

Sundeep Mathur is Vice President, Fintech Business Consulting Services Practice with Tavant Technologies

A tectonic shift in the fundamental technologies our business operates on. That is how I would describe the change AI will bring to our business.

AI in business has been evolving for decades; Generative AI in the past few years was simply the catalyst, the spark that has transformed our interaction to be more conversational and allowed AI to apply more independent reasoning to create compliant AI. The technology has matured to mitigate the previously identified risk of biases, hallucinations, and PII sharing.

Jamie Dimon, CEO of JPMorgan Chase, wrote in a shareholder letter, “We are completely convinced the consequences [of AI] will be extraordinary and possibly as transformational as some of the major technological inventions of the past several hundred years: think the printing press, the steam engine, electricity, computing and the Internet, among others.”

So, the first question everyone must answer is, “Do you believe this?” or “Do you believe that AI is a fidget spinner, a fad? Do you believe that as a CIO, I need to justify spending on AI as I would justify spending on any IT project?” As an organization, we have a choice: do the AI project or don’t do the AI project.

CIO magazine published an article on May 22, 2024 titled, Where’s the ROI for AI? CIOs struggle to find it. They describe many CIOs experimenting with the novelty, pushing hard to track the value, and initiating or putting on hold projects where they cannot calculate the ROI.

But I would assert that AI is not a “project;” it is a fundamental shift, as big as moving from client-server Applications to Web apps in 1998 or from on-premise data centres to cloud infrastructure in 2008. It is a genie that cannot be put back into the bottle.

Yes, the cost for enterprise LLM APIs could get high. Yes, you are paying on a subscription basis, and the applications you build will be token hogs. Yes, it will be costly. There is no denying that this new technology will be expensive. There is no denying that your organization must become proficient; they need to be trained, and they need guidance, mentoring, and leadership to find ways to use the tools. All of this is the investment side of the ROI.

So, a McDonalds’ hamburger cost has gone from $3.15 to $7.38. What are you going to do…not eat hamburgers? Maybe for a while, but what do you do when the cost of every hamburger has gone up, the cost of every fast-food restaurant has gone up, the cost of groceries has gone up. Yes in 1960, hamburgers cost was $.15 but now they don’t!

The reality in which our business operates is that the cost of state-of-the-art technology and applied AI has gone up, and the investment is greater now. But we can’t just stop eating hamburgers! Like all technology, these costs will subside over time. But as a business, our focus must be on the return side of ROI; our goal must be on capturing greater business value.

AI is more than just a cool tool. It is an enabling technology that will allow us to solve complex problems by applying better reasoning, critical thinking, and analysis of vast data in seconds.

Applied AI has the ability for us to transform our business, simplify our technology landscape, and improve the productivity of almost every function within our enterprise.  Our role as CIOs is implementing technology and working with our peers to determine how our business can be transformed with new and evolving technology.  Can we use new AI solutions to help grow revenue, reduce expenses, and help mitigate business risk?  As CIOs, some of our IT organizations must focus on applying new technology to help the “(R)eturn” side of ROI.

As a business and a CIO, you now need to ask yourself, are you an Eagle, an Ostrich, or an Owl…?

At this time of revolutionary change, the Eagle will go out and hunt for more. They will use this technology shift to grow their business, innovate, adapt, charge forward, and fly to new heights.

The Ostrich will bury its head and wait for the storm to pass. “This technology is not for me. I am in the service industry, and our company is a high-touch, people-driven organization.” However, even service companies can benefit from leveraging new technology.

Or are you an Owl waiting to see? Sitting on the fence, waiting for everyone else to succeed or fail. No judgment! Different organizations have different risk appetites. They are more late majority adopters in the product adoption curve. But this still does not mean staying stagnant; it means learning. Organizations will implement technology at a pace where they are comfortable; however, at minimum, it is imperative that an organization begin to learn and internalize the opportunity and potential business value that the technology could yield. You can use this time to prepare and constantly search for opportunities to apply to the business.

But finally, let us tackle the real problem…

In the CIO magazine article, there is also a reference to a Gartner survey from May 7, 2024, where the CIO stated that estimating and demonstrating business value is the No. 1 AI adoption barrier.

The survey indicates the top three barriers that CIOs struggle with to Implement AI:

First, estimating and demonstrating AI value
Second, a lack of talent/skills
Third, a lack of confidence in the technological aspects of AI

Let’s face it: To overcome these challenges, an organization must spend considerable time and money training existing employees and hiring new employees to make them experts. Or it can find a partner.

Many are struggling with all these problems and are actively trying to upskill their employees, but that takes time. Meanwhile, they are losing the opportunity to innovate to keep their organization at the forefront, and they are losing competitive advantage. Tavant is committed to helping our customers innovate, identify ways to increase productivity, drive down costs, and improve customer experience, all in a highly regulated environment. But that is precisely why the Eagles AND Owls should soar. The spark or catalyst in the past few years has been technological advancements that help us mitigate the previously identified risks.

It is the state of Compliant AI that is driving the urgency to act now.

It is the state of Compliant AI that will allow organizations to focus on delivering business value and focus on the return side of ROI.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)