Tagged with: #roi

AI coding tools don’t close the expertise gap — they amplify it. Research shows senior developers capture twice the productivity gains of juniors, while a randomised controlled trial found experienced developers actually worked slower with AI than without, the hidden taxes of verification offsetting initial speed. This article explores the verification premium — and why Boards should ask not “can we use AI to write code cheaper?” but “do we have the verification capability to ensure AI-generated code creates value rather than debt?”

Traditional ROI calculations capture the obvious: cost savings, faster processes, fewer errors. Yet AI’s most powerful returns often emerge much later, as cascading second and third-order effects transform capabilities, business models, and competitive position. In this article I explore how Boards can identify and measure these hidden gains using leading, lagging, and predictive indicators, while ensuring governance frameworks balance opportunity with risk.

Organisations are demanding disciplined, comprehensive business cases for AI initiatives that balance traditional financial rigour with frameworks capturing AI’s unique value creation patterns. In this fourth article in my series on AI business cases, I provide a step-by-step guide to building AI business cases that secure approval and set the foundation for successful implementation.

Building on my previous thoughts about why traditional business cases fail for AI investments, this article explores what I consider to be the essential building blocks for a more effective evaluation approach. This foundation provides boards with the tools to assess AI’s unique value creation patterns while maintaining financial discipline - helping leaders confidently navigate investment decisions that conventional models simply cannot adequately evaluate.

In today’s AI-driven landscape, traditional business case methods fall short when evaluating AI investments. Drawing from my experience developing AWS’s cloud business case tools, I explore why conventional ROI models struggle with AI’s parallel, multi-speed adoption patterns. Unlike cloud’s sequential journey, AI initiatives exist simultaneously across different maturity stages, creating valuation challenges that standard metrics can’t capture. Boards need new evaluation approaches that account for AI’s diverse cost structures, varying timelines for returns, and how investments in one area often enable value in entirely different parts of the business.

In my early years at Amazon Web Services (AWS), I created a tool for building cloud business cases that went beyond measuring just total cost of ownership and now forms the basis of our approach to costing migrations. I later co-authored the Cloud Value Framework (CVF) which focusses on measuring cloud value across four areas: cost optimisation, risk reduction, increased agility, and resource efficiency. So it should come as no surprise that I often get asked by Boards and the executives I meet “How do we decide if we should make an AI investment and how do we measure its ROI?”