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AI: Costs of implementation

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Factoring in the costs of artificial intelligence is more than figuring upfront expenditures, cautions Thuan Ngo, vice president of data and technical services with San Jose, CA-based IT consultancy ZAG Technical Services, Inc. BB #:365534

“Bean counters tend to focus on simple ROI [return on investment], but is that really the best evaluation of the benefits of new technology?”  

He cites smartphones as an example. “Would we be able to function today without a smartphone? Can we measure an accurate ROI on the cost of that phone? The answer is: it depends.”

Steven Shuman, sales manager for G&R Farms, BB #:114342 Glennville, GA, puts it this way: “We aren’t a company eager to be early adopters. Cost is important for us and our customers to make sure we can deliver ROI to everyone.

“New technology, as exciting as it is, does come with new costs, not just for the equipment and installation, but for training, management, and maintenance, and we need to make sure that every step and continued operation provides value.”

If a company is looking to use AI with minimal fuss, Ngo says there are cost-effective options for implementing specific features and capabilities. However, more complex business problems “will require more investment in time and effort to train the AI model to produce the desired results consistently and reliably.”

Since AI is not a one-size-fits-all proposition, each company must study the ROI balance, assess needs, and lay out a realistic timeframe for implementation, Ngo advises.

A move into the AI realm is always a “journey” and not a “quick fix,” he adds. “You need to have a good digital strategy and know what your technical requirements are, so you get compatible equipment and software.”

As AI is used to gain more insight into the massive amount of data locked up across the supply chain, Ngo says priorities and goals will evolve with changing demand. He recommends “proof-of-value projects” of six to twelve weeks.

“If a company adopts the right strategy with agile delivery, it frequently sees enough return in expended resources (labor, money, etc.) to justify and fund the next round of projects,” he explains.

“This is a catalyst to how a company can start to adopt a modernization culture where it advances technology as a competitive advantage.”

This is an excerpt from the Applied Technology feature in the November/December 2023 issue of Produce Blueprints Magazine. Click here to read the whole issue.