Insights on AI-powered Cost Reduction Strategies

Most companies have started using AI in some form, and now the pressure is on to deliver ROI from those AI initiatives. Whether the money comes from creating greater output or by slashing expenses, AI can help companies boost their profit margin. Here are some insights on how to strategically use AI-powered cost reduction strategies in your organization. 

Boost Workforce Productivity

Your employees are your greatest asset, and AI can help them be more productive. For example, companies can use AI to predict staffing needs and allocate resources more efficiently, avoiding under- or over-staffing. 

In their daily work, employees can use custom AI applications to automate routine tasks, freeing them up to focus on more strategic initiatives and work more efficiently. Real-time AI data tracking can help identify areas where teams can cut costs, complete tasks faster and identify process bottlenecks. In fact, a study by the MIT Sloan School of Management found that using AI boosted worker productivity. Recent hires and junior developers benefited the most, increasing their output by 27% to 39%. More senior developers saw productivity gains of 8% to 13%.

If your employees are using tools, AI can also analyze tool usage to determine who is getting the most value out of the tools. If a tool isn’t being used enough to justify its cost, companies can eliminate the tool and save the money instead. 

Optimizing Procurement and Pricing Strategies

 Procurement optimization is an area where companies can use AI to see fast, visible and concretely measurable cost reductions. Companies can use AI-driven insights to negotiate better terms with vendors, find the best suppliers, make efficient purchasing choices (like buying in bulk) and identify optimal purchasing windows. Once those purchases are made, companies can use the same insights to improve their supply chain to further reduce the overall procurement costs. 

Companies can also optimize procurement operations with dynamic pricing. By using AI to create dynamic pricing, companies can better forecast demand and adapt to business trends, which improves profit margins. As customers buy products and their tastes shift, AI can monitor inventory levels and predict future marketing trends so the company doesn’t waste money buying products that won’t sell well. 

Planning for Future Finances With Predictive Cost Management

As inflation rises and costs pile up, companies can keep their finances healthy by using AI for predictive cost management. One way to do this is to have AI forecast cash flow and perform an expense pattern analysis. This can help the company identify opportunities to minimize cash wastage and improve payment cycles. 

AI can also help predict what maintenance costs will be and when hardware will need to be replaced, helping companies budget appropriately. Along with maintenance costs, energy consumption costs are important to consider. Predictive cost management can estimate what the energy consumption (and the bills that will follow) will look like. Companies can use that information to better manage their energy consumption, such as switching to containerized models that use resources strategically, and adapt quickly to changing economic conditions. 

Catch and Prevent Fraud and Other Risks

Save costs, as well as internal disruption and PR disasters, by using AI for fraud detection. AI models can monitor financial transactions in real-time to detect unusual activity, reducing the risk of fraud and associated costs. Fraud techniques are becoming increasingly sophisticated, so using self-learning AI can help companies identify suspicious activity before it becomes an expensive problem. 

Besides fraud, AI can help with other risk mitigation. AI models can simulate likely “what-if” scenarios to evaluate the impact of different risks, such as economic downturns, regulatory changes or natural disasters. That way, the company can be prepared in case of an emergency and minimize financial losses.  

Owning an Enterprise AI Platform vs. Using SaaS-Based Tools

Another way to effectively cut costs is to own your own AI platform rather than paying to use SaaS-based tools. AI for enterprises is eye-wateringly expensive. At about 44% of companies, artificial intelligence is the single-largest technology spending budget line item. However, you can make AI more affordable by deploying and running AI applications on a trusted platform. When you own your artificial intelligence platform, you have control over increasing industry costs. Using a familiar, trusted infrastructure means avoiding unforeseen costs when things go wrong. 

That’s why SUSE introduced SUSE AI, a secure, private and enterprise-grade artificial intelligence platform built to deploy and run any generative AI workload, with zero trust security and observability built-in. SUSE AI offers customers the chance to own their own AI platform, leading to reduced costs and predictable expenses. 

You won’t have to worry about costly upgrades or migrations with SUSE AI. Because the platform is extensible, you can easily integrate new technologies and models as they emerge. And as you build out your use cases and your AI for enterprise usage spreads throughout your company, the platform can easily scale to meet your financial needs today and into the future. 

To learn more about how SUSE AI can reduce costs in your organization, watch this SUSE AI Intro Webinar.