The investment may be worth it, but there are up front and ongoing cost.
As summer winds down and we head into budgeting season, many companies will have Artificial Intelligence (AI) based solutions on their radar for the upcoming budget year. When formulating your budgets keep in mind that the costs of implementing advanced AI in an accounts payable (AP) automation process vary depending on a number of different factors, such as the complexity of the AI system, the size of the organization, the level of customization required, and the specific vendor and/or solution chosen. While the investment in advanced AI for your AP automation initiative may return a sizeable investment, here are some of the upfront costs to be considered:
- AI Software: The cost of the AI software itself, which could be a one-time purchase, some form of a subscription-based license model or a combination of both. Some AI solution providers may charge based on the number of users or transactions processed.
- Implementation and Integration: The cost of integrating the AI solution into the existing accounts payable system, which may involve customization, data migration, and training. You will need to evaluate how well the AI solution fits your current system or whether you will need to replace your current AP processing solution with all new technology and processes.
- Training and Support: Training employees to use the new AI-powered system effectively and providing ongoing technical support to solution implemented.
- Infrastructure and Hardware: Depending on the AI solution, there might be additional hardware requirements to run the AI algorithms efficiently, particularly if you choose to go with an on-premise implementation.
- Cloud Computing and Storage: Upfront and on-going costs associated with a cloud-hosted (public or private) instance of an AI AP automation solution to include costs for computing power and storage of data and documents.
- Maintenance and Updates: Regular maintenance and updates (on-premise or cloud-hosted) to keep the AI system functioning optimally and up-to-date with the latest technologies.
- Security and Compliance: Ensuring that the AI solution meets the necessary security standards and regulatory compliance, which may require additional investments in security and monitoring software. ICG partners with AWS and Sysdig to offer world-class security and monitoring for our clients.
- Vendor Management and Education: Any significant changes to your AP process will inevitably impact the vendors and suppliers who are submitting payment requests to your company. As such, it is important to plan for and anticipate costs associated with vendor education and training as well as ongoing management that may be associated with your new AI processing environment.
Your Return on Investment (ROI) is a large component when budgeting for an advanced AI project. While implementing AI in your accounts payable, or other financial back-office operations, may come with significant upfront costs, it’s essential to consider the potential savings and efficiency gains in the long run as part of your budgeting and cost justification process.
It may challenging to provide an exact figure for the cost of your AI initiative without knowing the specific requirements and the AI solution chosen. However, it’s essential to conduct a cost-benefit analysis to determine if an investment in AI for your operation will result in substantial improvements and savings in the accounts payable process. Your company should also consider the potential benefits of reduced errors, increased processing speed, and enhanced data insights that AI automation can offer as part of your evaluation.
So where specifically can AI be applied to improve operational efficiency and accuracy in your AP department?
- AP Automation
- Vendor Portals & Supplier Portals
- Vendor Onboarding & Supplier Onboarding
- Data Capture and Document Assembly
- Workflow Management
Contact ICG today to start a conversation on how ICG Consulting can help your organization implement AI enabled vendor management solutions. You can also watch a short Solutions Video on ICG’s comprehensive back-office suite of solutions.