This blog post models a business value case of using Microsoft Copilot and ChatGPT like technologies in organizations. Some of the data that is specific to a business was not entered. However, the model itself is comprehensive and the reader can adapt it to your organization’s specifics.
The business value model was created in a tool called Valufy I am reproducing the entire business case report here:
Executive Summary
Valuso is currently assessing the viability of Microsoft CoPilot and ChatGPT like technologies for implementation in its organization. This section provides a brief background, list of benefits (and their values), list of expenses (and their costs). The project financial metrics outlined at the end of this section will help provide a perspective on the viability of this project.
Background:
Valuso, a manufacturer of custom metal parts, is exploring the possibility of using Microsoft Copilot and other generative AI technologies to improve the productivity and operational efficiencies of their business. It is exploring a few specific ways that Valuso could use generative AI technologies: product design, quality control, operational planning, customer service, employee engagement, customer experience, etc. to name a few.
Benefits:
The following benefits have been identified with their approximate total values:
| Benefits | Estimated Value in millions of US Dollars |
| Additional Safety in Operational Areas | 06.35 |
| Better Customer Experience | 151.01 |
| Increased Employee Engagement | 253.10 |
| Increased Operational and Organizational Productivity | 196.11 |
| Reduced Costs through Greener Facilities | 196.11 |
The benefits above do not take into account the variable adoption rate of the project/initiative. Once the adoption rates are taken into account, the sum of the benefits will equal the total benefits listed in the project viability section below.
Costs:
The following expense items have been identified with their approximate costs:
| Costs | Estimated Cost in millions of US Dollars |
| Customer Relationship Management | 09.81 |
| Human Capital Management | 02.80 |
| Other | 02.80 |
| Process Re-engineering & Optimization | 04.00 |
| Regulatory Compliance | 49.03 |
| Technology Investments | 26.81 |
Project Viability:
The following high-level measures indicate the viability. All currencies shown below are in millions of US Dollars.
| Total Costs: | 95.25 |
| Total Benefits: | 570.20 |
| Hard Benefits: | 570.20 |
| NPV: | 474.95 |
| NPV (Based on Hard Benefits Only): | 474.95 |
| ROI: | 498.65% |
| ROI (Based on Hard Benefits Only): | 498.65% |
| IRR: | 782.54% |
| IRR (Based on Hard Benefits Only): | 782.54% |
| Payback Period (in Years): | 0.14 |
Background
Valuso, a manufacturer of custom metal parts, is exploring the possibility of using Microsoft Copilot and other generative AI technologies to improve the productivity and operational efficiencies of their business. It is exploring a few specific ways that Valuso could use generative AI technologies: product design, quality control, operational planning, customer service, employee engagement, customer experience, etc. to name a few.
Key Information for Business Case:
| Number of Employees: | 20000 |
| Annual Revenue (in millions of US Dollars): | 35000 |
| Evaluation Period: | 3 |
| Corporate Tax Rate: | 23 |
| Net Profit: | 20 |
| Discount Rate: | 3.5 |
| Project/Initiative Adoption Rate (% per year) | 50/70/90 |
Benefit Details
The following are the benefits associated with this project. All values expressed in millions of US Dollars.
| Benefit 1: Additional Safety in Operational Areas |
| Improved safety conditions, guide and monitor prescribed operational practices. Monitor workforce movements to reduce injuries, workplace fatigue, etc. |
| Weightage: 100 |
| Key Benefit Metric 1: Reduce workplace safety incidents |
| Benefit (US Dollars):Y1: 2.27 | Y2: 2.27 | Y3: 2.27 |
| Key Benefit Metric 2: Reduction in operator/driver safety incidents |
| Benefit (US Dollars):Y0: 0.00 |
| Benefit 2: Better Customer Experience |
| Use AI technologies to develop sophisticated chatbots and other customer service tools that could answer customer questions and resolve issues quickly and efficiently. This could improve the customer experience and reduce Valuso’s customer support costs. |
| Weightage: 100 |
| Key Benefit Metric 1: Additional Revenue due to improved customer satisfaction |
| Benefit (US Dollars):Y1: 53.90 | Y2: 53.90 | Y3: 53.90 |
| Key Benefit Metric 2: Faster time to market |
| Benefit (US Dollars):Y0: 0.00 |
| Key Benefit Metric 3: Improve win rate through access to real-time sales analytics |
| Benefit (US Dollars):Y0: 0.00 |
| Key Benefit Metric 4: Improved SLA due to better trained employees |
| Benefit (US Dollars):Y0: 0.00 |
| Key Benefit Metric 5: Increase in Customer Lifetime Value |
| Benefit (US Dollars):Y0: 0.00 |
| Key Benefit Metric 6: Increase in revenue due to customer renewal/repeat business |
| Benefit (US Dollars):Y0: 0.00 |
| Key Benefit Metric 7: Increased Revenue due to decreased customer churn (stickiness) |
| Benefit (US Dollars):Y0: 0.00 |
| Benefit 3: Increased Employee Engagement |
| Workforce improvements with office and frontline workers, sales reps, others, etc. Improvements due to agility in processes, fail fast approaches, etc.. Sales cycle improvements. Improvements in HR experiences |
| Weightage: 100 |
| Key Benefit Metric 1: Accelerated Innovation |
| Benefit (US Dollars):Y0: 0.00 |
| Key Benefit Metric 2: Improve Employee Productivity through collaboration |
| Benefit (US Dollars):Y1: 38.81 | Y2: 51.74 | Y3: 103.49 |
| Key Benefit Metric 3: Improve Employee Retention |
| Benefit (US Dollars):Y1: 26.40 | Y2: 26.40 | Y3: 26.40 |
| Key Benefit Metric 4: Improved employee productivity due to increased employee engagement |
| Benefit (US Dollars):Y0: 0.00 |
| Benefit 4: Increased Operational and Organizational Productivity |
| Improvement in product design, quality control, product planning, etc. to automate the mundane and focus on insightful tasks. |
| Weightage: 100 |
| Key Benefit Metric 1: Improve Factory Worker Productivity through collaboration |
| Benefit (US Dollars):Y0: 0.00 |
| Key Benefit Metric 2: Improve operational efficiencies |
| Benefit (US Dollars):Y1: 70.00 | Y2: 70.00 | Y3: 70.00 |
| Key Benefit Metric 3: Improve plant capacity due to predictive maintenance |
| Benefit (US Dollars):Y0: 0.00 |
| Key Benefit Metric 4: Improvement in Plant Availability |
| Benefit (US Dollars):Y0: 0.00 |
| Benefit 5: Reduced Costs through Greener Facilities |
| AI technologies can be used to monitor efficient usage of facilities and manufacturing plants resulting in reduced operating costs. This will be a significant contributing factor for the ESG score which in turn, is reflected in the overall value of the company. |
| Weightage: 100 |
| Key Benefit Metric 1: Facility Maintenance as a Percent of Revenue |
| Benefit (US Dollars):Y0: 0.00 |
| Key Benefit Metric 2: Operational cost reduction due to sustainability measures |
| Benefit (US Dollars):Y1: 70.00 | Y2: 70.00 | Y3: 70.00 |
| Key Benefit Metric 3: Reduced Facility Maintenance |
| Benefit (US Dollars):Y0: 0.00 |
| Key Benefit Metric 4: Reduced Facility Usage |
| Benefit (US Dollars):Y0: 0.00 |
Cost Details
The following are the costs associated with this project. All costs expressed in millions of US Dollars.
| Cost 1: Customer Relationship Management |
| The investments into the generative AI technologies will require change to the customer relationship management process. Customer concerns of non-human interaction, data proliferation, etc. will need to be managed. |
| Key Cost Metric 1: Customer Relationship Management Cost as percent of revenue |
| Cost (US Dollars):Y1: 3.50 | Y2: 3.50 | Y3: 3.50 |
| Key Cost Metric 2: Customer churn due to product transformation |
| Cost (US Dollars):Y0: 0.00 |
| Cost 2: Human Capital Management |
| The new systems will require training of existing personnel and retraining of current employees. |
| Key Cost Metric 1: Additional employee hiring |
| Cost (US Dollars):Y1: 1.00 | Y2: 1.00 | Y3: 1.00 |
| Cost 3: Other |
| There may be costs related to culture development, external brand management, heading off potential negative press through focused marketing campaigns. |
| Key Cost Metric 1: Enhanced Marketing Campaign |
| Cost (US Dollars):Y1: 1.00 | Y2: 1.00 | Y3: 1.00 |
| Cost 4: Process Re-engineering & Optimization |
| Process changes as a result of AI based systems. Re-engineering of existing processes. The generative AI paradigm will need to adopted into the workplace with a deliberative change management program in place. |
| Key Cost Metric 1: Cost of process development |
| Cost (US Dollars):Y0: 0.00 |
| Key Cost Metric 2: Process Adoption Cost |
| Cost (US Dollars):Y0: 1.00 |
| Key Cost Metric 3: Process training cost |
| Cost (US Dollars):Y0: 3.00 |
| Cost 5: Regulatory Compliance |
| Proliferation of AI in systems that rely on customer and employee data will require additional regulatory considerations. |
| Key Cost Metric 1: Cost of regulatory compliance as a percent of revenue |
| Cost (US Dollars):Y1: 17.50 | Y2: 17.50 | Y3: 17.50 |
| Cost 6: Technology Investments |
| Costs due to technology acquisition, maintenance and development of AI based systems |
| Key Cost Metric 1: Annual SaaS Subscription |
| Cost (US Dollars):Y1: 6.00 | Y2: 6.00 | Y3: 6.00 |
| Key Cost Metric 2: Technology Setup Cost 1 |
| Cost (US Dollars):Y0: 10.00 |
Value Proposition
The following tables detail the benefit propositions (both hard and soft) as well as the cost details associated with this project. All currencies expressed in millions of US Dollars.
Total Benefits:
| Benefit | Weightage | Year 1 | Year 2 | Year 3 | Total |
| Additional Safety in Operational Areas | 100 | 02.19 | 02.12 | 02.05 | 06.35 |
| Better Customer Experience | 100 | 52.08 | 50.32 | 48.61 | 151.01 |
| Increased Employee Engagement | 100 | 63.00 | 72.95 | 117.15 | 253.10 |
| Increased Operational and Organizational Productivity | 100 | 67.63 | 65.35 | 63.14 | 196.11 |
| Reduced Costs through Greener Facilities | 100 | 67.63 | 65.35 | 63.14 | 196.11 |
| Gross Benefits | 252.54 | 256.07 | 294.08 | 802.69 | |
| Benefit Adoption Rate | 50.00% | 70.00% | 90.00% | ||
| Adopted Benefits | 126.27 | 179.25 | 264.68 | 570.20 |
All Costs:
| Cost | Initial Cost | Year 1 | Year 2 | Year 3 | Total |
| Customer Relationship Management | 00.00 | 03.38 | 03.27 | 03.16 | 09.81 |
| Human Capital Management | 00.00 | 00.97 | 00.93 | 00.90 | 02.80 |
| Other | 00.00 | 00.97 | 00.93 | 00.90 | 02.80 |
| Process Re-engineering & Optimization | 04.00 | 00.00 | 00.00 | 00.00 | 04.00 |
| Regulatory Compliance | 00.00 | 16.91 | 16.34 | 15.78 | 49.03 |
| Technology Investments | 10.00 | 05.80 | 05.60 | 05.41 | 26.81 |
| Total Yearly | 14.00 | 28.02 | 27.07 | 26.16 | 95.25 |
Onetime Costs:
| Cost | Initial Cost | Year 1 | Year 2 | Year 3 | Total |
| Customer Relationship Management | 00.00 | 00.00 | 00.00 | 00.00 | 00.00 |
| Human Capital Management | 00.00 | 00.00 | 00.00 | 00.00 | 00.00 |
| Other | 00.00 | 00.00 | 00.00 | 00.00 | 00.00 |
| Process Re-engineering & Optimization | 04.00 | 00.00 | 00.00 | 00.00 | 04.00 |
| Regulatory Compliance | 00.00 | 00.00 | 00.00 | 00.00 | 00.00 |
| Technology Investments | 10.00 | 00.00 | 00.00 | 00.00 | 10.00 |
| Total Yearly | 14.00 | 00.00 | 00.00 | 00.00 | 14.00 |
Recurring Costs:
| Cost | Initial Cost | Year 1 | Year 2 | Year 3 | Total |
| Customer Relationship Management | 00.00 | 03.38 | 03.27 | 03.16 | 09.81 |
| Human Capital Management | 00.00 | 00.97 | 00.93 | 00.90 | 02.80 |
| Other | 00.00 | 00.97 | 00.93 | 00.90 | 02.80 |
| Process Re-engineering & Optimization | 04.00 | 00.00 | 00.00 | 00.00 | 04.00 |
| Regulatory Compliance | 00.00 | 16.91 | 16.34 | 15.78 | 49.03 |
| Technology Investments | 10.00 | 05.80 | 05.60 | 05.41 | 26.81 |
| Total Yearly | 14.00 | 28.02 | 27.07 | 26.16 | 95.25 |
Net Present Value Calculation:
| Initial | Year 1 | Year 2 | Year 3 | Total | |
| Costs | 14.00 | 28.02 | 27.07 | 26.16 | 95.25 |
| All Benefits | 126.27 | 179.25 | 264.68 | 570.20 | |
| Hard Benefits | 126.27 | 179.25 | 264.68 | 570.20 | |
| Soft Benefits | 00.00 | 00.00 | 00.00 | 00.00 | |
| Net Cash Flow | -14.00 | 98.25 | 152.18 | 238.52 | 474.95 |
Assumptions
The following assumptions have been made in developing the benefit and cost calculations.
Benefits Calculation Assumptions:
| Benefit 1: Additional Safety in Operational Areas |
| Improved safety conditions, guide and monitor prescribed operational practices. Monitor workforce movements to reduce injuries, workplace fatigue, etc. |
| Weightage: 100 |
| Calculation for Key Benefit Metric “Reduce workplace safety incidents“: ( Average Percentage Improvement due to this benefit / 100 ) * Average cost of safety incident resolution * Number of safety incidents
Benefit Application Rate: Year 1: 100% Year 2: 100% Year 3: 100% Notes: $42K as per National Safety Council. 2.7 safety incidents per100 safety workers |
| Calculation for Key Benefit Metric “Reduction in operator/driver safety incidents“: ( Average Percentage Improvement due to this benefit / 100 ) * Average cost of safety incident resolution * Number of driver/operator safety incidents
Notes: |
| Average Percentage Improvement due to this benefit (%age):0 |
| Average Percentage Improvement due to this benefit (%age):10 |
| Average cost of safety incident resolution (per incident):0 |
| Average cost of safety incident resolution (per incident):42000 |
| Number of driver/operator safety incidents (per year):0 |
| Number of safety incidents (#):540 |
| Benefit 2: Better Customer Experience |
| Use AI technologies to develop sophisticated chatbots and other customer service tools that could answer customer questions and resolve issues quickly and efficiently. This could improve the customer experience and reduce Valuso’s customer support costs. |
| Weightage: 100 |
| Calculation for Key Benefit Metric “Additional Revenue due to improved customer satisfaction“: ( Average Percentage Improvement due to this benefit / 100 ) * ( Increase in Customer Satisfaction (NPS, CSAT, CES) / 100 ) * ( Profit margin of company / 100 ) * ( 1 – Rate on which company is taxed / 100 ) * Annual Revenue of Company
Benefit Application Rate: Year 1: 100% Year 2: 100% Year 3: 100% Notes: |
| Calculation for Key Benefit Metric “Faster time to market“: Annual Revenue of Company * ( Percentage Annual impact of product/service/software solution to company revenue / 100 ) * ( Profit margin of company / 100 ) * ( 1 – Rate on which company is taxed / 100 ) * ( Average time to solution development in months / 12 ) * ( Expected percent acceleration in development / 100 )
Notes: |
| Calculation for Key Benefit Metric “Improve win rate through access to real-time sales analytics“: Current open sales opportunities * Average revenue per customer * ( Profit margin of company / 100 ) * ( 1 – ( Rate on which company is taxed / 100 ) ) * ( Closing percentage of a sale or deal / 100 ) * ( Expected percent increase in sales due to improved analytics / 100 )
Notes: |
| Calculation for Key Benefit Metric “Improved SLA due to better trained employees“: ( Expected percent improvement in meeting SLA due to people efficiencies / 100 ) * Yearly cost of meeting SLA
Notes: |
| Calculation for Key Benefit Metric “Increase in Customer Lifetime Value“: Number of current customers * Expected Percent Increase in Customer lifetime value * Customer lifetime value
Notes: |
| Calculation for Key Benefit Metric “Increase in revenue due to customer renewal/repeat business“: Average revenue per customer * ( Expected percent increase in sales as a result of enriched customer experience / 100 ) * Number of current customers
Notes: |
| Calculation for Key Benefit Metric “Increased Revenue due to decreased customer churn (stickiness)“: ( Expected Percent Improvement as a result of this project or initiative / 100 ) * ( Average percentage of customers lost (churn rate) per year / 100 ) * Average revenue per customer * Number of current customers * ( Profit margin of company / 100 ) * ( 1 – Rate on which company is taxed / 100 )
Notes: |
| Annual Revenue of Company (Annual):35000000000 |
| Annual Revenue of Company (Annual):10000000000 |
| Average Percentage Improvement due to this benefit (%age):10 |
| Average percentage of customers lost (churn rate) per year (%):0 |
| Average revenue per customer (Annual):0 |
| Average revenue per customer (Annual):0 |
| Average revenue per customer (Annual):0 |
| Average time to solution development in months (in months):0 |
| Closing percentage of a sale or deal (%age):0 |
| Current open sales opportunities (numeric):0 |
| Customer lifetime value (per customer):0 |
| Expected Percent Improvement as a result of this project or initiative (%age):0 |
| Expected percent acceleration in development (%age):0 |
| Expected percent improvement in meeting SLA due to people efficiencies (%age):0 |
| Expected percent increase in sales as a result of enriched customer experience (%age):0 |
| Expected percent increase in sales due to improved analytics (%age):0 |
| Expected percentage increase in customer lifetime value (%age):0 |
| Increase in Customer Satisfaction (NPS, CSAT, CES) (%age):10 |
| Number of current customers (numeric):0 |
| Number of current customers (numeric):0 |
| Number of current customers (numeric):0 |
| Percentage Annual impact of product/service/software solution to company revenue (%age):0 |
| Profit margin of company (%age):20 |
| Profit margin of company (%age):20 |
| Profit margin of company (%age):20 |
| Profit margin of company (%age):20 |
| Rate on which company is taxed (%age):23 |
| Rate on which company is taxed (%age):23 |
| Rate on which company is taxed (%age):23 |
| Rate on which company is taxed (%age):23 |
| Yearly cost of meeting SLA (annual):0 |
| Benefit 3: Increased Employee Engagement |
| Workforce improvements with office and frontline workers, sales reps, others, etc. Improvements due to agility in processes, fail fast approaches, etc.. Sales cycle improvements. Improvements in HR experiences |
| Weightage: 100 |
| Calculation for Key Benefit Metric “Accelerated Innovation“: Number of innovation ideas per year * Percentage of Innovation Ideas that are implemented * Profit margin of company * Expected percent acceleration in innovation * AVG_ADDI_REVE_DUE__INNO_IDEA
Notes: |
| Calculation for Key Benefit Metric “Improve Employee Productivity through collaboration“: Number of Information/Knowledge Workers * ( Percent of working time spent in collaboration / 100 ) * Number of working hours per year * ( Expected percent improvement in employee collaboration / 100 ) * Annual Salary of information/knowledge worker * ( 1 – ( Rate on which company is taxed / 100 ) ) / Number of working hours per year
Benefit Application Rate: Year 1: 30% Year 2: 40% Year 3: 80% Notes: |
| Calculation for Key Benefit Metric “Improve Employee Retention“: ( Average rate of employee turnover in the company / 100 ) * ( Expected reduction in employee turnover / 100 ) * ( Average cost of employee hire + Average cost of employee fire ) * Number of employees in company
Benefit Application Rate: Year 1: 100% Year 2: 100% Year 3: 100% Notes: |
| Calculation for Key Benefit Metric “Improved employee productivity due to increased employee engagement“: Number of employees in company * ( Expected percentage increase in overall employee productivity / 100 ) * Annual Average Fully Burdened Salary of Employee
Notes: |
| Annual Average Fully Burdened Salary of Employee (per year):0 |
| Annual Salary of information/knowledge worker (Annual):100000 |
| Average cost of employee fire (Annual):10000 |
| Average cost of employee hire (Annual):100000 |
| Average rate of employee turnover in the company (%age):12 |
| Expected percent acceleration in innovation (%age):0 |
| Expected percent improvement in employee collaboration (%age):30 |
| Expected percentage increase in overall employee productivity (%):0 |
| Expected reduction in employee turnover (%age):10 |
| Number of Information/Knowledge Workers (numeric):14000 |
| Number of employees in company (numeric):0 |
| Number of employees in company (numeric):20000 |
| Number of innovation ideas per year (numeric):0 |
| Number of working hours per year (in hours):2000 |
| Percent of working time spent in collaboration (%age):40 |
| Percentage of Innovation Ideas that are implemented (%age):0 |
| Percentage of Innovation Ideas that are implemented (%age):0 |
| Profit margin of company (%age):20 |
| Rate on which company is taxed (%age):23 |
| Benefit 4: Increased Operational and Organizational Productivity |
| Improvement in product design, quality control, product planning, etc. to automate the mundane and focus on insightful tasks. |
| Weightage: 100 |
| Calculation for Key Benefit Metric “Improve Factory Worker Productivity through collaboration“: Number of factory workers * ( Percent of working time spent in collaboration / 100 ) * Number of working hours per year * ( Expected percent improvement in employee collaboration / 100 ) * Annual Salary of Factory Worker * ( 1 – ( Rate on which company is taxed / 100 ) ) / Number of working hours per year
Notes: |
| Calculation for Key Benefit Metric “Improve operational efficiencies“: ( Operating costs as a percentage of annual revenue / 100 ) * Annual Revenue of Company * expected percent improvement in operations efficiencies / 100
Benefit Application Rate: Year 1: 100% Year 2: 100% Year 3: 100% Notes: |
| Calculation for Key Benefit Metric “Improve plant capacity due to predictive maintenance“: Number of units produced * Expected percent improvement in plant capacity due to predictive maintenance * Number of plants/sites * ( Average revenue per unit of product – Cost per unit )
Notes: |
| Calculation for Key Benefit Metric “Improvement in Plant Availability“: Average cost of plant downtime per hour * Annual number of production hours per plant/site * Average percent of plant/site availability * Number of plants/sites * Expected improvement in plant/site availability
Notes: |
| Annual Revenue of Company (Annual):35000000000 |
| Annual Salary of Factory Worker (annual):0 |
| Annual number of production hours per plant/site (in hours):0 |
| Average cost of plant downtime per hour (per hour):0 |
| Average percent of plant/site availability (%age):0 |
| Average revenue per unit of product (per unit):0 |
| Cost per unit (per unit):0 |
| Expected improvement in plant/site availability (%age):0 |
| Expected percent improvement in employee collaboration (%age):0 |
| Expected percent improvement in plant capacity due to predictive maintenance (%age):0 |
| Number of factory workers (numeric):0 |
| Number of plants/sites (numeric):0 |
| Number of plants/sites (numeric):0 |
| Number of units produced (numeric):0 |
| Number of working hours per year (in hours):0 |
| Operating costs as a percentage of annual revenue (%age):40 |
| Percent of working time spent in collaboration (%age):0 |
| Rate on which company is taxed (%age):23 |
| expected percent improvement in operations efficiencies (%age):0.5 |
| Benefit 5: Reduced Costs through Greener Facilities |
| AI technologies can be used to monitor efficient usage of facilities and manufacturing plants resulting in reduced operating costs. This will be a significant contributing factor for the ESG score which in turn, is reflected in the overall value of the company. |
| Weightage: 100 |
| Calculation for Key Benefit Metric “Facility Maintenance as a Percent of Revenue“: ( Facility Maintenance Cost as a Percent of Revenue / 100 ) * ( Expected percent savings in facility operations / 100 ) * Annual Revenue of Company
Notes: |
| Calculation for Key Benefit Metric “Operational cost reduction due to sustainability measures“: ( Average percentage reduction in cost due to sustainability measures / 100 ) * Annual Revenue of Company * ( PCT_OPERATING_COSTS_Annual Revenue of Company / 100 )
Benefit Application Rate: Year 1: 100% Year 2: 100% Year 3: 100% Notes: |
| Calculation for Key Benefit Metric “Reduced Facility Maintenance“: Number of facilities * Annual operational cost of facility * Expected percent savings in facility operations
Notes: |
| Calculation for Key Benefit Metric “Reduced Facility Usage“: Average annual facility cost per employee * Number of employees in company * Average percentage reduction in facility usage / 100
Notes: |
| Annual Revenue of Company (Annual):10000000000 |
| Annual Revenue of Company (Annual):35000000000 |
| Annual operational cost of facility (per facility):0 |
| Average annual facility cost per employee (per employee):0 |
| Average percentage reduction in cost due to sustainability measures (%age):0.5 |
| Average percentage reduction in facility usage (%age):0 |
| Expected percent savings in facility operations (%age):0 |
| Expected percent savings in facility operations (%age):0 |
| Facility Maintenance Cost as a Percent of Revenue (%age):0 |
| Number of employees in company (numeric):0 |
| Number of facilities (#):0 |
| Operating costs as a percentage of annual revenue (%age):40 |
Costs Calculation Assumptions:
|
Cost 1: Customer Relationship Management |
| The investments into the generative AI technologies will require change to the customer relationship management process. Customer concerns of non-human interaction, data proliferation, etc. will need to be managed. |
| Calculation for Key Cost Metric “Customer Relationship Management Cost as percent of revenue“: Annual Revenue of Company * ( Customer management cost as a percent of revenue / 100 )
Cost Application Rate: Year 1: 100% Year 2: 100% Year 3: 100% Notes: |
| Calculation for Key Cost Metric “Customer churn due to product transformation“: Catch all bucket for benefits or costs
Notes: |
| Annual Revenue of Company (Annual):35000000000 |
| Catch all bucket for benefits or costs (numeric):0 |
| Customer management cost as a percent of revenue (%):0.01 |
| Cost 2: Human Capital Management |
| The new systems will require training of existing personnel and retraining of current employees. |
| Calculation for Key Cost Metric “Additional employee hiring“: Annual Salary of information/knowledge worker * Number of new employees
Cost Application Rate: Year 1: 100% Year 2: 100% Year 3: 100% Notes: |
| Annual Salary of information/knowledge worker (Annual):100000 |
| Number of new employees (numeric):10 |
| Cost 3: Other |
| There may be costs related to culture development, external brand management, heading off potential negative press through focused marketing campaigns. |
| Calculation for Key Cost Metric “Enhanced Marketing Campaign“: Catch all bucket for benefits or costs
Cost Application Rate: Year 1: 100% Year 2: 100% Year 3: 100% Notes: |
| Catch all bucket for benefits or costs (numeric):1000000 |
| Catch all bucket for benefits or costs (numeric):0 |
| Cost 4: Process Re-engineering & Optimization |
| Process changes as a result of AI based systems. Re-engineering of existing processes. The generative AI paradigm will need to adopted into the workplace with a deliberative change management program in place. |
| Calculation for Key Cost Metric “Cost of process development“: Average time in hours taken to develop business process * Number of employees needed to develo business process * Annual Salary of information/knowledge worker / Number of working hours per year
Notes: |
| Calculation for Key Cost Metric “Process Adoption Cost“: Average time in hours taken for process adoption * Number of employees involved in adoption process * Annual Salary of information/knowledge worker / Number of working hours per year
Notes: |
| Calculation for Key Cost Metric “Process training cost“: Number of hours required for process related training * Average hourly cost per trainer * Number of trainers needed for process related training
Notes: |
| Annual Salary of information/knowledge worker (Annual):100000 |
| Annual Salary of information/knowledge worker (Annual):0 |
| Average hourly cost per trainer (per hour):300 |
| Average time in hours taken for process adoption (in hours):40 |
| Average time in hours taken to develop business process (in hours):0 |
| Number of employees involved in adoption process (numeric):500 |
| Number of employees needed to develo business process (numeric):0 |
| Number of hours required for process related training (in hours):200 |
| Number of trainers needed for process related training (numeric):50 |
| Number of working hours per year (in hours):2000 |
| Number of working hours per year (in hours):0 |
| Cost 5: Regulatory Compliance |
| Proliferation of AI in systems that rely on customer and employee data will require additional regulatory considerations. |
| Calculation for Key Cost Metric “Cost of regulatory compliance as a percent of revenue“: Annual Revenue of Company * ( Cost of regulatory compliance as a % of revenue / 100 )
Cost Application Rate: Year 1: 100% Year 2: 100% Year 3: 100% Notes: |
| Annual Revenue of Company (Annual):35000000000 |
| Cost of regulatory compliance as a % of revenue (%):0.05 |
| Cost 6: Technology Investments |
| Costs due to technology acquisition, maintenance and development of AI based systems |
| Calculation for Key Cost Metric “Annual SaaS Subscription“: Cost of SaaS per month * 12 * Number of software licenses required
Cost Application Rate: Year 1: 100% Year 2: 100% Year 3: 100% Notes: |
| Calculation for Key Cost Metric “Technology Setup Cost 1“: Catch all bucket for benefits or costs
Notes: |
| Catch all bucket for benefits or costs (numeric):10000000 |
| Cost of SaaS per month (cost/month):100 |
| Number of software licenses required (numeric):5000 |
