Are We Measuring AI ROI All Wrong?

Well, Cody, I think there are plenty of examples of standard IT projects.

I'm thinking like multi-year ERP implementations, for instance, that cost millions of dollars and take years to pay back.

But I think you're right.

There is clearly kind of intense pressure on publicly listed company boards and particularly CFOs to justify the growing spending on AI.

But having said that, I think it's wrong to expect rapid ROI at a time when people are really just getting used to this technology and learning how it can boost their personal productivity.

And it's certainly a mistake to prematurely cut headcount because of AI investments.

In fact, in the past couple of years, we've seen a number of companies, Klarna, IBM, Ford, they've laid off hundreds of staff in different areas and then had to rehire them a few months later when the AI and the automation proves to be ineffective.

Now, let's be clear, AI will need to pay its way and it is going to reduce the size of supply chain functions in terms of headcount in the coming years.

But I think leaders need to get the use cases, the tech, the processes, the governance, all of those things right before that can realistically happen.

Yeah, I think that's right, Garrett.

And the calls that we've had recently with 0100 clients, the companies getting traction are not treating AI as another software development.

They're treating it as a redesign of how work gets done around a few critical decisions.

If you take a broken workflow, weak data and muddy decision rights and then drop AI on top, you're not going to get any meaningful transformation.

You're going to get a more expensive version of the same dysfunction.

So yeah, boards and CFOs are right to press on the economics, but the right question is not, did this tool pay for itself in 90 days? It's, did we remove a business constraint that matters? If a company can make better sourcing decisions faster, absorb more volatility without adding additional headcount, or even compress planning cycle times in a way that improves service or cash, that's a real value story, even if it doesn't first show up as a clean labor item.

That's a great point, Justin.

We've talked in the past about how if you drop AI on top of things, it just scales the dysfunction if you already have dysfunction there.

So I really like that point.

So let's dig into this.