Perform cost benefit analyses

About this Video

• Video Title: Perform cost benefit analyses
• Channel: Gooru Content
• Speakers: Not specified in transcript
• Duration: 00:04:32

Introduction

This video explains how to build a strong financial justification for adopting generative AI. It emphasizes the importance of demonstrating tangible value creation and return on investment (ROI) to secure necessary investment from leadership. The video outlines a structured approach to cost-benefit analysis for AI adoption.

Key Takeaways

• Quantify Total Cost of Ownership: Include direct platform costs (API usage, compute, subscriptions), integration/development efforts, talent/training costs, and ongoing operational/maintenance expenses.
• Measure Value Creation: Identify and measure benefits like time savings through automation, faster time to market, revenue growth opportunities (enhanced customer engagement), and improved customer/employee satisfaction.
• Construct a Robust ROI Model: Use key financial metrics (ROI, payback period, NPV, IRR) to assess profitability. Include clear assumptions, transparency in calculations, and scenario analysis.
• Leverage Generative AI for Analysis: Use generative AI to analyze vendor quotes, break down cost structures, estimate efficiency gains, and identify/categorize financial benefits.
• Address Financial Risks: Identify potential risks (e.g., unexpected usage spikes, integration delays) and use sensitivity analysis and what-if scenarios to assess their impact on projected ROI. Compare different platform options.