Alexander Hagerup, Co-Founder and CEO of Vic.ai, is a serial tech entrepreneur with a strong passion for artificial intelligence.
As experts continue to debate whether a true recession is on its way, two things are certain: The economy is contracting, and borrowing is more expensive than it has been in over a decade. As a result, many businesses are becoming more cash-conservative, slowing their growth plans and battening down the hatches for what might be a challenging handful of years.
But as belts are tightening, business leaders still need to consider continued investment in areas that can improve business operations. As they evaluate how to optimize under financial pressure, businesses must weigh where their investment dollars will give them the best and quickest ROI.
And when it comes to bang for their buck, leaders are coming back time and time again to investments in technology. Tech leaders aren’t pulling back from technological investments at all, even in the face of a possible recession. Wisely, these leaders understand more than ever before that technology isn’t a cost center—it’s a business driver.
But not all technological investments are created equal, even when it comes to automation. Here are some factors finance leaders should consider when weighing where to allocate their increasingly-precious investment dollars.
MORE FOR YOU
Approach RPA With Caution
Automation is near the top of business leaders’ list, beaten out only by cybersecurity and analytics, according to a Bain & Company survey of 180 IT decision makers across North America and Europe. Forty-one percent of these respondents cited “building automation capabilities within business lines” as one of their most critical IT priorities.
Indeed, on its face, automation poses several cost-saving benefits, from reducing overhead to minimizing costly and time-consuming human error. But these solutions don’t always accomplish what they promise, especially when they involve robotic process automation or RPA.
Many business leaders make the mistake of overspending on RPA platforms, blinded by the promise of some future ROI. In reality, due to the need to customize RPA to every client, these decision-makers don’t actually know how long it will take to begin reaping the benefits—if they ever do. I, myself, have made this mistake in the past, spending far too much time and money on a tedious RPA solution that was intended to solve a customer success back-office function, only to find that after the overhead of managing it, the gains were marginal.
Go Fully Intelligent
If business leaders want to fully maximize their investments and reap quicker benefits, they’ll go one giant leap beyond automation, landing in the realm of autonomous artificial intelligence (AI). True AI solutions, which continually learn from a company’s data to become increasingly accurate with time, are the holy grail of ROI.
Finance leaders are in a great position to lead the way within their own companies by implementing AI solutions in the accounting function. Across industries, these teams are sagging under the weight of endless, tedious accounting tasks, using outdated, ineffective technology and wasting significant time fixing human errors. By adopting AI solutions, these leaders can free up their team members for more strategic tasks, all while increasing output and accuracy.
Reap The Benefits
In addition to directly saving companies money in terms of labor costs, AI also poses benefits in terms of data and analytics. This is significant, considering that 50% of the surveyed IT decision makers cited “leveraging enterprise-wide data and analytics to drive strategic decision-making” as a critical IT priority.
AI gives business leaders visibility into their data across business units, helping them drill down into their spending. Rather than spending several weeks of time across multiple employees, AI is unveiling these insights automatically, thereby empowering business leaders to execute strategic savings more quickly than ever before.
Hot new tech solutions like AI are also a boon for attracting and retaining talent—which pays dividends down the road. Employees are attracted to companies that are at the forefront of technology. During this costly period of high turnover and increasing labor costs, employers should take to heart the power of technology to improve recruitment and employee morale.
At a recent TEC Town Hall event, LinkedIn co-founder Reid Hoffman advised leaders to keep AI on their radar, even if they aren’t in a position to invest in it today. “You are sacrificing the future if you opt out of AI completely,” Hoffman said.
He couldn’t be more right. True AI solutions promise unmatched ROI in terms of both savings and time—as few as six months in the case of current AI accounting software. This couldn’t be more important in the face of a recession, when companies are going to need performance guarantees and very quick returns on every dollar they carefully spend.
Even more, AI can help business leaders not just survive economic obstacles, but also thrive once they reach the other side. By making a few smart investments today, businesses can emerge from any oncoming recession more effective and efficient than they were before.