We are at the beginning stages of the largest technological transition in our lifetimes. To illustrate the importance of this transition, imagine entering the eras of personal computers, the internet, and mobile computing without the timely budget for those respective technologies. What might have happened? The answer is clear and examples are well-known. Think Blockbuster, Kodak, and Blackberry. Today, the key to leading and competing successfully lies in making early, appropriately sized, well-thought-out investments that are aligned with your business strategy and the possibilities AI can deliver to create a competitive advantage. Anything less risks your company becoming outdated and irrelevant.
First and foremost, it is essential to invest in AI strategy. This strategy should be informed by the state of the art in AI technology, and how AI can support and transform your business strategy. Don’t limit your thinking to generative AI and large language models. While this is the newest and most high profile AI capability, it is barely enterprise ready and only one of the wide range of AI technologies. And it’s also important to know that the pace of technical innovation is increasing and your AI strategy should be informed by the most recent AI research, not what is hitting the mainstream business press, which is often times several years behind. Businesses that fail to grasp these key points will inevitably make poor investment choices and fall behind. Understanding the AI landscape and how it can improve your business is not a matter of choice; it is a critical requirement for staying competitive.
Planning for the future is vital. Waiting until 2025 or beyond to start investing in AI, when others have already started will put you at a severe disadvantage. The time to start budgeting for AI is now.
Investment in AI should also not be seen as a one-time expenditure. Instead, be prepared for a sustained commitment to increasing investments in AI in the coming years to gain competitive advantage. Over time, AI will impact all industries, functional areas, and roles within an organization, just like the internet. Initial investments should be focused on your core products or services, improving your sales and marketing, and gaining operational efficiencies.
When determining your initial investment for this transformation, start with budget for strategy so you can identify the key levers of value creation and the ROI on the initial development projects to pursue. Then add budget for the most impactful projects identified in your strategy. The good news is that this AI development work should be self-funding, in that these projects should delivery more value than the investment, with the best an order of magnitude or more.
2024 will be the year of the AI budget. Don’t be left behind.