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| Illustration generated with AI assistance using ChatGPT and DALL·E by OpenAI. Concept and article text by Vipin Labroo |
The whole rationale behind deploying AI to the extent that it threatens to decimate whole professions is premised on the fact that it leads to much enhanced productivity, reduced costs and unprecedented profits. In other words, much more ROI or return on investment than would accrue if humans were employed to carry out the same tasks. But is it really the case that the ROI from using AI in place of humans is always higher? Let us take a look and try to assess if it is indeed like that.
For all the hype and hoopla surrounding the rising adoption of AI across industries, the fact of the matter is that the ROI delivered by it is way below expectations. According to research carried out by Scaled Agile’s partner, Return on AI Institute; while 90% of organisations find that they derive some value from AI, only a minority are seeing significant economic impact. Even so, almost 60% of them have started slowing or reducing hiring, banking on future AI productivity gains. At the same time, only 2% of them have linked those decisions to actual results. This points to businesses perceiving more value from AI than actually realising it.
AI Comes at a Cost
Transitioning to AI comes at a cost. Much of it is in the form of the consumption of natural resources like water and rare minerals, as well as damage to the environment on account of the large amount of electricity required to be produced to make it functional. At the same time, there is a parallel loss of valuable human expertise that would have grown and matured over the years if not replaced by AI. Completely slamming the door on the face of human ingenuity and its ability to create wonders, and instead depending on AI, which hones its skills by studying past human achievements, may not be the bright idea that many think that it is.
Comparing humans and AI is like comparing apples with oranges
ROI on AI requires human support
In a scenario where AI use doesn’t begin to deliver ROI for 2 to 4 years, is it better to invest in human resources and develop and grow them over the years? In any case, organisations that do manage to show high ROI on their AI investment are the ones that have realised that a human centric business model works best in an environment where AI expertise is encouraged. The key learning over here is that AI performs best when it empowers people by transforming how they perform work. The focus here is on aiding the human work force to perform better and not on finding ways and means to replace people with technology on account of illogical FOMO felt by business houses around the world, driven by unfounded hype.
Money Makes the Mare Go
Feeding the AI behemoth with astronomical investment in the hope of future super profits is not tenable, and more and more companies are realising it. Until the time AI comprehensively proves its worth as a viable business proposition for organisations across scale and geography, it makes way more sense for one to trust and invest in people. That will get them more ROI in the near term, and who knows the long-term future as well. AI has as much chance of making people leave the workforce as the internet has had since its launch years ago. While AI will doubtless make its worth felt more and more, it will only do so with the help of people. There is no other way.
