AI characteristics – where lies the most value?
AI investments have unique characteristics that traditional ROI calculations cannot adequately capture. These implementations rarely deliver isolated value. They create ripple effects and compound impacts across departments or processes.
Other intangible and indirect benefits such as improved decision-making or enhanced innovation capability represent substantial value that traditionally doesn’t appear in ROI calculations. When an AI system helps your team make better decisions more quickly, how do you measure that improvement?
Your finance department likely encountered these limitations when evaluating previous complex technology investments. There’s the pressure to demonstrate financial returns while also recognising that some strategic investments deliver value that extends beyond simple calculations.
A well-structured, consistent measurement and transparent approach is needed. One that accounts for both tangible and intangible benefits while recognising the unique characteristics of your AI investments.
Organising effective AI value measurements
In essence, AI ROI should measure your revenue increasement as well as your costs & risks reduction. To get a more extended scope, you can apply a multidimensional approach that captures value across various business aspects. Your value measurement should cover four essential dimensions:
Financial dimension
While traditional financial metrics alone don’t give you the full picture, they remain important. This dimension includes:
Cost reduction and avoidance
Revenue increasements & enhancements
Productivity improvements
Resource optimisation
Operational dimension
often delivers substantial operational improvements that translate into both direct and indirect value:
Process efficiency gains
Quality improvements
Speed and throughput enhancements
Error reduction
Customer dimension
Customer-facing AI implementations can transform relationships and create significant value:
Enhanced personalisation
Increased satisfaction scores
Higher retention rates
Innovation dimension
AI enables new capabilities and strategic advantages:
New product/service development
Business model innovation
Market adaptability
Competitive differentiation
Measuring value across time horizons
Realising value from your AI projects happens through different time horizons. To have a comprehensive picture of this value, you should track these timings separately. In our experience, organisations with mature AI value measurement frameworks see way more positive returns on their investments.
With a time-based measurement approach, you can spot benefits emerging at different rates:
Short term horizon (0-6 months)
With AI technology evolving fast, it is important to keep your options open in the discovery phase and stay aware of vender lock-ins. In terms of ROI, initial benefits typically focus on low-hanging fruit that have a big impact and quickly deliver significant, measurable value:
Automation of repetitive, routine tasks
Processing efficiency gains
Initial quality improvements
Resource reallocation benefits
Medium-term horizon (6-18 months)
As adoption and knowledge increases, and systems mature, additional benefits emerge:
Process transformation results
Enhanced decision-making impacts
Customer experience improvements
Cross-functional efficiency gains
Long-term horizon (18+ months)
Strategic value often materialises in the longer term:
Business model innovation
Market positioning advantages
Organisational capability enhancements
Competitive differentiation
AI is not an IT matter, it is transformational for your full organisation. These timelines help you to create realistic expectations to your board and stakeholders.
By setting appropriate timeframes for different types of return, you can manage expectations while still showing progress.
For example, an AI implementation might deliver immediate benefits through automation of routine compliance tasks (short-term), followed by improved risk assessment accuracy (medium-term), ultimately enabling new personalised service offerings (long-term).
Beyond ROI: strategic benefits of AI measurement
An AI value framework is a strategic asset for your organisation. Implementing a robust AI value measurement approach delivers several key benefits:
Enhanced decision-making: a comprehensive view of AI return enables better-informed investment decisions across your portfolio. You gain the ability to compare different initiatives on a consistent basis and measure their unique value contributions.
Improved stakeholder communication: the framework provides a common language for discussing AI value across the organisation. This clear and transparent view builds trust in the investment process.
Strategic alignment: continuous value measurement creates organisational clarity around your AI objectives. It ensures initiatives remain focused on delivering real business value rather than pursuing technology for its own sake.
Organisational learning: systematic value measurement builds institutional knowledge about what works in your specific context, creating instinctual reflexes to embed AI within the product and process cycles and capturing its value.
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Through these measurement guidelines, you gain more than justification - you gain strategic influence. As a key driver, you not only understand the capabilities of AI, but you are also well-positioned to lead business transformation supported by technology, all while maintaining appropriate financial discipline and oversight.
These benefits translate in a stronger competitive position as your organisation becomes more adept at identifying, implementing, and measuring high-value AI initiatives.
Conclusion
AI ROI measurement requires a pragmatic approach supported by clear implementation protocols. Traditional financial approaches fall short while more comprehensive frameworks succeed in capturing AI’s full business value.
By using the approach outlined above, you can:
Justify and focus your (future) AI investments with evidence-based measurement
capture both tangible and intangible benefits
set appropriate expectations for your value realisation
improve organisational alignment around AI initiatives
enhance your strategic role in technology investment decisions
This approach not only justifies investments but enhances the CFO's strategic role in driving digital transformation. As financial leaders increasingly influence business decisions, having a robust framework for evaluating and communicating value becomes essential.
Want to learn more about building long-term AI value for your organisation?
Contact our AI experts at BDO Belgium to discuss how we can help you assess your current capabilities and develop a roadmap for long-term succes
