Is AI going to cut down our costs or it just a halo effect?

We all know when AI took over Tom’s job, it’s just a matter of time that AI has the potential to significantly cut down costs across various industries by automating repetitive tasks, optimizing processes, and enabling better decision-making. However, whether AI actually cuts down costs or merely creates a “halo effect” or so to speak, depends on how it’s implemented and integrated into business operations. While indeed AI excels at routine tasks but struggles with out-of-the-box thinking which only humans are capable of. Truth be told, The Future is Uncertain, But Opportunity Exists.

The cost-saving potential of AI is not just a result of bias but is grounded in its ability to autonomously automate mundane tasks, analyze patterns, and help us make informed decisions. Here are some ways in which AI can drive cost reductions.

  1. Automation: AI can automate repetitive tasks, liberating human workforce to deal with more complex problems that demands their attention.
  2. Increased Efficiency: AI can optimize processes and make them more efficient.
  3. Enhanced Quality: AI can improve product and service quality, reducing costs associated with rework, recalls, or customer dissatisfaction.
  4. Personalization: AI enables personalized experiences for customers, which can increase customer satisfaction and retention.
  5. Scalability: AI solutions can often scale more easily and cost-effectively than traditional systems. Cloud-based AI services, for instance, can be scaled up or down as needed, allowing organizations to pay only for what they use.

Now, let’s delve into the real deal of developing, innovating & using an AI. the initial investment in AI technology may be high, leading to increased costs in the short horizon. Additionally, the entire benefits of AI may not be realized immediately, requiring time for optimization and fine-tuning which is quite exhaustive and not as fast as AI’s automation. it’s worth considering AI isn’t a magic bullet & definitely not a one that can be dodged either. Let’s break down few things that are worth noting,

  1. Development Costs: Initial investment in AI technologies, highly skilled personnels, computational power, data Acquistion & annotation and Model Maintenance-Updates could cost a fortune. Organizations need to carefully assess the costs and potential returns of AI adoption.
  2. Data Management: AI systems rely on huge data. Collecting, cleaning, labeling, and managing data can be expensive and time-consuming, particularly if the organization lacks access to comprehensive datasets or needs to comply with data privacy regulations.
  3. Unprecedented outcomes: AI model is good as the data it is trained with. If the training data is biased or incomplete or irrelevant, the resulting AI model will inherit those characteristics. This can lead to unprecedented outcomes, in turn leading to increased costs to train it.
  4. Integration Challenges: Integrating AI with existing systems can be complex and expensive. Existing IT infrastructure might not be compatible with AI, requiring updates or complete overhauls. Also, AI needs customization & personalization before integrating to specific needs.
  5. Security Risks & Careful implementation: AI systems need to be carefully designed and trained to avoid not just bias but to forbid cyber-attacks which can lead to exploitation of data and disrupt business operations.

AI is what it’s been fed with, yeah sure, it can learn & become better but still it revolves around the ingested data to analyze and predict, definitely not independent & cognitive to deal with unknown-unprecedented circumstances and not to forget the associated costs on developing it. A human has to be parameterized while developing an AI to monitor & instruct AI to what it can become of. AI shouldn’t & can never replace human judgment entirely. Human expertise is crucial for decision-making and ethical considerations.

So, what’s the conclusion then?

Well, The AI era has just begun, it would be availability heuristic to define the fiscal outcomes at this point, yet many businesses from versatile backgrounds have started flooding in knowing what AI can offer, so it’s prudent to join & harness early than soon to be out in our own game just like tom.



Beak | IT Infra Intelligence |

Beak AIOps is an AI driven IT infra intelligence platform, ready to plugin to your environment and serve you diligently.