From the course: Integrating Generative AI into Business Strategy

Assess generative AI outcomes to measure ROI

From the course: Integrating Generative AI into Business Strategy

Assess generative AI outcomes to measure ROI

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- Investing in generative AI is not just about embracing new technology, it's about driving real business value. But how do you measure the success of your AI initiatives? In this video, I'll provide you with a framework for accurately evaluating your AI solutions performance and return on investments, including metrics, costs, and overall business impact. When evaluating your AI initiatives, first, revisit the key performance indicators and milestones that you would've created during the AI roadmap goal alignment section of this course. These are your evaluation North Stars. Assess both quantitative metrics like usage analytics, and conversions, and qualitative feedback like surveys and interviews from staff and customers. Quantitative data reveals the who, what, and when, while qualitative data offers the why. Next, determine comprehensive costs over your AI solutions full lifecycle. From research to post-deployment oversight including maintenance, monitoring upgrades, and responsible deprecation. With targets and cost clarified, you can now begin to calculate business impact. Intangible terms for example. If your AI chat bot boosted sales conversion rates by 7%, you can determine precisely how much additional revenue that yielded and compare it against total costs. This cost benefit analysis determines return on investment, a metric crucial for executive decision making. However, traditional ROI calculations focusing solely on direct financial gains versus implementation costs don't always apply neatly to AI. AI impacts include both Hard ROI, such as direct financial gains like cost savings, and Soft ROI, broader benefits like employee satisfaction, decision agility improvements, and future readiness. You'll need to formulate frameworks to quantify both. So catalog all measurable cost and time savings, revenue and productivity lifts as Hard ROI would also develop indicators and measures to value software upsides like skills development, brand enhancement, and anticipatory capacity. Stay nimble and reevaluate KPIs and ROI analyses as markets shift so you can course correct if needed. Through accurate evaluation of real world performance and future strategic impact, you can justify investments to unlock AI's last and transformative potential in your business.

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