As summer winds down and we head into budgeting season, many companies will have Artificial Intelligence (AI) 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 several 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 investment in AI for your AP processes may have a sizeable ROI, consider some of the following costs when budgeting for AI in accounts payable.
Upfront Costs
- 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, may involve customization, data migration, and training. You will need to evaluate how well the AI solution fits your current system. You may also consider replacing 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. This is particularly true if you choose to go with an on-premise implementation.
- Cloud Computing and Storage: Upfront and ongoing 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.
- 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.
Recurring Costs
- 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. This 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.
Conclusion
Your return on investment (ROI) is a large component when budgeting for an advanced AI project. While implementing AI in your 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 be challenging to provide an exact figure for the cost of your AI initiative without knowing your specific requirements. It’s essential to conduct a cost-benefit analysis to determine if investing in AI will result in substantial improvements and savings. 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 about how ICG can help your organization with budgeting for AI in accounts payable.