SAP Concur highlights complexities in return on investment in AI

Businesses of various scales are currently facing the challenge of assessing and enhancing the return on investment (ROI) in artificial intelligence (AI) and automation.

According to Fabian Calle, the managing director for small and medium businesses, SAP Concur Australia and New Zealand, the path to unlocking the full potential of these technologies is filled with complexities.

"It’s the tried and tested saying: work smarter, not harder. It may be a cliché, but it’s true. AI and automation can have a significant impact on how a business runs, especially when it comes to managing expense and invoice processes, which are universally known as complex and often frustrating tasks," said Calle.

Business leaders are eager to reap the benefits of AI and automation while managing the associated risks. Finance managers are in a pivotal position to provide rapid and accurate assessments of AI investments' value. However, traditional ROI calculations become challenging due to the unique characteristics of AI projects, coupled with the ever-evolving landscape of applications and uncertain timing of benefits.

Successful AI projects must focus on effective data management, consistently tracking results, and upholding rigorous standards for security, privacy, and ethics.

Businesses need to approach AI and automation strategically to unlock their true value. There are three main areas where these technologies can drive transformation.

First, businesses can make smart decisions by leveraging data-driven insights. AI and automation can turn vast amounts of generated data into actionable insights by identifying patterns, trends, and anomalies. For instance, analytics tools can analyse expense data, flagging irregularities and suggesting cost-saving opportunities. AI-driven forecasting models can predict spending patterns, enabling finance teams to adjust budgets proactively and prepare for cash flow fluctuations.

Second, AI and automation can simplify invoicing and payment processes.

These technologies streamline the entire accounts payable process by automating the capture of electronic invoices, matching them with purchase orders, and ensuring timely vendor payments. This reduces manual errors and allows businesses to take advantage of early payment discounts, thereby improving cash flow management. Integrated expense and invoicing solutions provide a unified view of spending, facilitating better cost control.

Third, AI and automation can streamline expense management and ensure compliance. Managing regulatory compliance and risks is challenging, but AI can ensure accurate and timely reporting, monitor for compliance breaches, and identify potential risks. Expense management software can automate tracking and reporting of expense data, ensuring regulatory compliance.

Successfully implementing AI and automation requires more than just deploying the technology. It involves building a strong foundation through robust data practices, appropriate technologies, skilled talent, and streamlined business processes. Long-term investments in these areas can enhance efficiency, reduce costs, and prepare businesses for future challenges.

Effective implementation of these technologies also requires businesses to consider several factors. A comprehensive cost assessment should include expenses for data management, technology infrastructure, talent acquisition, training, and change management. Businesses must also account for costs related to ethical considerations and data security.

A holistic ROI calculation is essential. Beyond measuring efficiency and productivity, businesses should consider factors such as quality improvements, innovation potential, enhanced compliance, fraud reduction, and long-term benefits of a data-driven culture. User adoption rates and training effectiveness are also critical in determining the success of an AI implementation.

Investing in skill development is paramount. Businesses that develop internal expertise in AI can uncover new insights and drive innovation, looking beyond immediate productivity gains and cost reductions.

Adopting a phased approach to AI implementation can build momentum. Focusing on achieving simple early wins provides evidence of AI's tangible impact, justifying larger investments.

"Investing in AI and automation is a strategic move for long-term success. Early adopters will better adapt to changing market conditions and customer expectations. AI and automation help businesses manage costs more effectively by automating expense tracking, analysing spending patterns, and optimising budget allocation, which reduces administrative burdens and enhances decision-making," said Calle.

AI and automation not only augment human capabilities but also attract younger professionals and offer better work-life balance by automating routine tasks. These technologies empower employees to focus on strategic, value-added work.

"AI and automation touch so many aspects of a business, which adds complexity when trying to quantify their ROI. However, despite this challenge, the advantages are clear."

"By focusing on high-potential projects, securing early wins, and taking a holistic view of both costs and benefits, businesses of all sizes can unlock the true value of AI and automation, positioning themselves for long-term success," Calle noted.