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26 Jun 2024

Making the Business Case for Adopting AI and AI Governance

Making the Business Case for Adopting AI and AI Governance

Making the Business Case for Adopting AI and AI Governance

As the pace of technological advancement accelerates, businesses are increasingly looking to adopt AI tools, and forward-thinking firms are also implementing robust AI governance frameworks. The rationale for implementing these advances contemporaneously is compelling, driven by the potential for enhanced productivity, innovation, and competitive advantage while also understanding this new technology’s financial implications, strategic benefits, and oversight requirements.

Financial Considerations: Technology and Labor Costs

The financial foundation of the business case for AI governance relies on two key cost pillars— technology and labor—and implementing an AI governance program enterprise-wide involves establishing an accountability model. This model identifies the AI system, its owner, and the individual responsible for traceability confirmation, ensuring that employees understand their responsibility for AI model outputs. Effective enforcement of this model can minimize the need for additional support personnel. For instance, a data scientist already on the payroll could own the verification and validation of a custom large language model (LLM) or other generative AI (GenAI) model, incorporating this responsibility into their existing role.

Strategic Benefits: Productivity and Innovation

The strategic benefits of adopting AI are significant. According to our recent white paper A Strategic Blueprint for AI Adoption, using LLMs in core business workflows can lead to significant productivity gains and labor cost savings "in the immediately subsequent years—as much as 20% in key areas—which can be critical to justifying both the investment and the sensitive topic of staff reductions." For example, consider a company with 50,000 employees—if even half of them became more productive by using AI models, the improvements to the bottom line could be substantial. 

Emphasizing AI as a Tool for Enhancement

Contrary to the fear that AI may lead to widespread job displacement, Deloitte Insights reveal that "there’s no real indication that business leaders are planning on using it to automate knowledge jobs at any kind of scale." Instead, AI is poised to liberate workers from mundane, repetitive tasks, enabling them to focus on more creative and strategic aspects of their roles. This perspective aligns with the broader business philosophy that "leading businesses know they can’t shrink their way to growth" via cost-cutting, but rather must empower employees with tools to enhance productivity and drive innovation.

Governance: A Critical Component

Effective AI governance is essential for scaling AI applications and ensuring their responsible use. Governance frameworks should define the business’s vision, identify potential risks, and validate performance. Developing a cross-functional governance team to establish, implement, and monitor organizational guardrails to ensure AI is used effectively and responsibly across the enterprise is a key means of ensuring that AI applications deliver maximum business value.

Strategic Implementation and Evolution

Adopting AI and integrating it into business operations must be approached strategically. As highlighted by Deloitte, "executives are increasingly under pressure to speed this transition and stay ahead of their competitors." However, this transition must not be hasty. Businesses must focus on leveraging the unique capacity of AI to address existing problems in ways human might not consider and to enable clear and creative differentiation from competitors. A measured approach—starting with ad hoc applications and evolving through defined processes to standardized, pervasive enterprise-level use cases—can ensure sustainable and impactful AI integration.

The Future of AI in Business

The adoption of AI and AI governance is a necessary technological shift for modern businesses. Carefully balancing costs, enhancing productivity, and implementing robust governance frameworks will allow businesses to harness the vast, transformative potential of AI. As more enterprises realize the benefits of sector-specific AI models and customized LLMs, the next wave of AI adoption will undoubtedly reshape industries and create unprecedented opportunities for growth and innovation.   For more detailed information about developing a robust AI adoption and governance plan, click here to download A Strategic Blueprint for AI Adoption. Click here to schedule a demonstration of our GenAI security and enablement platform. Try our product for free for a limited time here. 

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