The future of industry is in smarter IT expenditures. So how can businesses shift their current thinking, and get ahead of the competition?
The cost of ambiguity
While corporate IT budgets have grown over the years, they reflect an operational cost which, in comparison to capital expenditures, is less clearly understood, and for which the specific value is hidden. In other words, seen as a mere necessity, IT is a cost center with little obvious validation.
But with artificial intelligence on the rise, IT spending is being reframed – from cost to value. And with this comes an essential question for every business leader: “What am I getting for this investment?”
The time has come for company IT strategies to be reoriented – away from simply managing infrastructure, and towards proving real business value through AI-enabled impact.
The inefficiency gap
For most businesses, IT is not a core function. Neither customer-facing nor revenue generating, IT is a support function like HR and Operations, enabling the core purpose of the business – insurance, production, healthcare – from the background.
But even with the rise of scalability products such as playbooks, knowledge management systems and managed service providers, IT is still a traditional, human-centric and inefficient function, too reliant on legacy processes. Data is siloed; workflows are manual and slow; and capital is often tied up with the least measurable return. Robotic Process Automation (RPA) and process mining can create some efficiency, but AI – especially agentic workflows – can use the same IT staff to vastly increase the value created.
AI: the catalyst for value acquisition
The leap to agentic workflows allows companies to adjust rigid business workflows into processes that self-optimize – where AI agents execute multi-step tasks, learn from outcomes, and seek the most efficient path. One example might be replacing manual ticket-handling with an AI-driven service desk agent – streamlining the entire workflow, and turning this and other such laborious tasks into smooth, automated processes.
AI enables the strategic principle of achieving “more with the same or more with less” across all IT and business functions. Allowing IT staff to reach more outcomes quicker both improves internal customer satisfaction, and expedites the business’ core functions.
Where to apply AI can be difficult, but identifying inefficiencies is a good starting point. Generally, most businesses know where the bottlenecks are in their IT operations – having built up over the years through reorganizations, acquisitions, regulatory components, etc. AI gives these businesses the opportunity to re-imagine their workflows, and allow agents to identify better ways to perform.
The value equation: metrics for modern IT
The modern mandate for IT is to ensure accountability and responsibility for all the money spent on measurable ROI. This covers three areas:
- Efficiency – operating with a reduced and measurable spend
- Revenue generation – creating new opportunities for the business core function
- Risk reduction – eliminating both internal and external risks that can disrupt the business
Practically this could mean anything from IT automation, with predictive maintenance and usage monitoring; operations, and processing efficiency gains through hyper-automation; the supply chain, integrating predictive logistics and inventory optimization; to HR, with AI-powered talent acquisition and personalized employee support, among many other potential applications.
Overall, global IT spend continues to rise as companies invest more in differentiating their businesses. The true winners will be those that shift from volume of spend to quality of ROI.
The future of IT, and serving the business
The age of technology for technology’s sake – or just keeping up with the competition via new software and infrastructure – is over. The race to the cloud for companies that did not properly evaluate their ROI has been a business awakening. AI has the opportunity to change to a value-based evaluation of worth. Most companies are still in early prototype stages and are struggling to identify ROI amongst fancy interfaces and novel ways of interacting with data. Those that use this as an opportunity to re-align to serve their core business function will be the future leaders in their industry. Maintaining a focus on metrics allows for intelligent investment that returns greater benefits. And through the lens of AI-driven value and ROI, organizations can move beyond wasteful expenditure and turn their technology budget into their most powerful competitive advantage.
How we can help
At Kibo AI, we provide essential advisory services for keeping your business on top – from how to spend wisely, to which AI tools work best for which task. Get in touch with our experts, and find out what we can do for you.
