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It’s no secret that artificial intelligence can deliver internal benefits such as increased automation, improved business processes, and better insights from data.
But companies can also leverage their internal AI knowledge and the tools they use to generate revenue and find new growth opportunities. And the good news is that this can be applied to virtually any type of business.
“It’s a common misconception that only technology companies can benefit from cutting-edge innovations like generative AI,” said Nate Suda, principal managing analyst at research firm Gartner. “It’s a myth that needs to be dispelled.”
Turning AI into a revenue generator isn’t necessarily easy, however, especially since the emergence of AI-based business use cases is relatively new to many. CFOs can play an important role in helping their organizations monetize AI and here are some tips to ensure their success.
Demonstrate value
To create market-viable AI-based solutions, companies must show potential customers how they will benefit from using these offerings. CFOs should work with their fellow senior executives, including those who directly oversee product development efforts, to understand why AI-based solutions are valuable to customers.
“Understanding and meeting customer needs is fundamental,” said Anthony Lam, chief financial officer of health technology company Healwell AI. “CFOs need to ensure that the AI product or service being developed addresses a specific problem and delivers clear value. »
Early validation through focus groups or market research can prevent the development of products that don’t attract customer interest, Lam said. “Putting customer needs first and demonstrating tangible value are essential for successful monetization,” he said.
Focus on generative AI
Generative AI “is a profit enabler, just like the steam engine was during the industrial revolution,” Suda said. “The companies that prospered during the era were not only those that built engines, but also those that integrated the steam engine into their operations, using it to fuel unprecedented growth. Likewise, (generative AI) is the steam engine of the mind: it unleashes creativity, amplifies productivity and fuels learning across industries.
CFOs need to shift the conversation from how technology can drive digital revenue to how GenAI can increase the chances of the core business succeeding, Suda said. “When posed this way, CFOs play a central role in unlocking generative AI revenue for non-tech companies,” he said.
“Putting customer needs first and demonstrating tangible value are essential for successful monetization. »
Anthony Lam
CFO, Healwell AI
For organizations to successfully monetize GenAI, CFOs must focus on these key actions, Suda said, including managing GenAI’s unique cost structures by developing cost models that account for these factors; align AI business use cases with strategic financial objectives and target the most promising, high-value opportunities for AI monetization.
Understanding Costs
To calculate ROI for AI-enabled products and services, businesses need to understand development costs.
“AI solutions can be expensive to develop,” Lam said. They often rely on base models (FM) – machine learning or deep learning models that are trained on large data to be applied to a range of use cases. And these FMs require extensive data processing capabilities, he said.
“Costs associated with data acquisition, cleaning, licensing, AI engineering talent and IT resources – both cloud-based and on-premises – can be substantial,” Lam said. “CFOs must carefully evaluate these costs and plan how to amortize them against revenue streams to achieve a favorable ROI. »
Determine the price
Another key part of the ROI equation is determining the price of AI solutions. Pricing strategies should reflect several factors, Lam said.
The first is the market segment. Prices will vary depending on whether the target market is small, medium or enterprise, Lam said. “CFOs must strike a balance between gaining market share with lower prices and maximizing revenue with higher prices,” he said.
Another factor is price measurement. “The pricing model, flat monthly fees versus volume-based fees, should align with customer preferences and usage patterns,” Lam said. “Effective pricing is essential to the successful launch of an AI product or service, and CFOs play a critical role in establishing pricing strategies that meet the organization’s objectives. »
Improve sales and customer loyalty
Another way businesses can improve their finances with AI technology is to take advantage of new market opportunities and improve customer experience for better retention. AI and data analytics “can transform both sales and customer success by providing real-time insights and automating key processes,” said Kevin Rhodes, executive vice president and CFO of ‘Extreme Networks, a network technology provider.
“In sales, predictive analytics helps teams predict customer behavior, allowing them to focus on prospects with the highest conversion potential,” Rhodes said. “For customer success, AI-powered tools can identify customer usage and engagement patterns, enabling proactive outreach to resolve issues and increase satisfaction.
Data-driven insights improve both sales pitches and customer interactions, making them more personalized and effective, Rhodes said.
“Strategic use of AI enables finance leaders to take on a more dynamic role, contributing not only to cost management but also to revenue growth. »
Kevin Rhodes
CFO, Extreme Networks
“By automating administrative tasks such as CRM (customer relationship management) updates, scheduling and reporting, AI frees up time so teams can focus on building relationships and creating of long-term value,” Rhodes said. “This leads to greater efficiency, better customer retention and better overall performance across both functions.” »
Identify business trends
Traditionally seen as the gatekeepers of an organization’s financial health, CFOs are now expected to step out of their conventional role and take on a more strategic role within senior management, Rhodes said.
“This evolution is largely driven by AI and the power of data analytics to help influence business strategy, which is increasingly the responsibility of the CFO,” Rhodes said.
One of the most obvious recent examples is the COVID-19 pandemic, which has had a huge impact on supply chain planning, Rhodes said. “While there is no way to predict something like a pandemic, leveraging real-time AI-driven data can significantly help adjust strategies to minimize the impact of an event like supply chain disruption,” Rhodes said.
By leveraging AI’s ability to provide actionable insights into market trends, CFOs can unlock new avenues of growth for their business. “Strategic use of AI allows finance leaders to take on a more dynamic role, contributing not only to cost management but also to revenue growth,” Rhodes said.