Budgeting for AI Initiatives: A Practical Guide for Small Business
How to Budget for AI Initiatives
At some point, each of my clients asks me how to budget for AI initiatives. The answers are never straightforward. AI isn’t just a new server or a faster Internet connection. By now, managers and executives have learned that ChatGPT and its cousins can add time to their day, and they want to know what else is possible.
AI Integration in Business Applications
For most use cases, AI will be built into the applications that run your business. Your PSA, your club management system, your ERP, and your accounting package will magically have new features such as:
- Workforce Optimization
- Automated GL Coding
- Procurement Automation
These features can be huge time savers and will significantly impact operational efficiencies, but there’s a catch. Overreliance on these features can cause big problems—the technologies are immature and need to be double-checked by a human expert. If you’re too much of an expert, the technologies can be overly simple or make ridiculously obvious observations.
The Future of AI in Business Operations
Still, the technologies will improve. Even if the new features seem absurd at times, they will also be useful and will enhance your interaction with your operations and the software that runs it.
LLM Summarizer Features
The feature sets that will have immediate interest to any service organization are the LLM (Large Language Model) summarizer features. These are being used by:
- Service Departments
- Scheduling Departments
- Anyone interacting with a customer base
These tools provide a perfectly reasonable summary of every interaction with a customer. They can then provide a summary of summaries, sometimes with hyperlinks to individual communications that embody the observations made within the summary. These are very useful to almost any service organization.
Practical Steps for Budgeting
- Understand Your Needs
- Identify which areas of your operations will benefit most from AI integration. Is it customer service, scheduling, or financial processes?
- Consult with department heads to understand their pain points and where automation could make a difference.
- Evaluate Existing Solutions
- Research AI features in your current software. Many platforms are integrating AI capabilities into their systems at no extra cost.
- Talk to your software vendors about upcoming AI features and their potential impact on your business processes.
- Plan for Training and Expertise
- Budget for training your staff on new AI tools. Effective use of AI requires a solid understanding of how it works and how to interpret its outputs.
- Consider hiring or consulting with AI experts who can guide your implementation and ensure it aligns with your business goals.
- Implement Gradually
- Start with small, manageable projects that can demonstrate quick wins. This will help build confidence in AI technologies across your organization.
- Use these projects to refine your understanding of costs and benefits, which will help in planning larger initiatives.
- Monitor and Adjust
- Continuously monitor the performance of AI tools. Are they delivering the expected efficiencies? Are there any areas where human oversight is still crucial?
- Be prepared to adjust your strategy based on these insights. AI is a rapidly evolving field, and flexibility is key.
Conclusion
By following these steps, you can create a realistic budget for AI initiatives that aligns with your business objectives and operational realities. Remember, while the initial steps may seem daunting, the long-term benefits of AI integration can be substantial, driving efficiency and innovation in your organization.
