As organisations moved to the cloud, many discovered that the ability to easily set up and consume services also made spending harder to track. The reason? Teams could now get services running without a lengthy procurement process.
More use meant more spend, so finance teams soon needed ways to break that spending down and track it by product and department.
Fast forward to today, and if you remember first making sense of those cloud bills, buying AI licences might give you a sense of déjà vu. You’re back to working out what each AI subscription covers and what the business will pay as your team members use it.
Let’s talk Microsoft
In late September, Microsoft announced its updated Copilot pricing model – combining subscriptions for “everyday” use and usage charges for “advanced” use, including Cowork, Code and Autopilot.
Microsoft also announced new tools for tracking consumption, setting spending policies and controlling which models are available to team members.
You can see where this is going. Counting licences will only tell you part of the story for your financial reporting.
Let’s talk JPMorgan
On the bank’s third-quarter earnings call, JPMorgan’s CFO, Jeremy Barnum, acknowledged that some productivity benefits it expects from AI will be offset by token costs.
Many organisations are realising the same thing.
This matters when deciding how much an organisation invests in AI usage. It’s not enough to quantify productivity – you need to understand what doing so costs.
We’ve been here before
You may recognise the name – FinOps. It started when the move to cloud led organisations to bring engineering, finance and business teams together to understand cloud spend and the value it produced.
And guess what? FinOps has already been extended to cover AI in several areas, including allocating costs, forecasting expenditure and measuring business value.
Where to now
As tools proliferate and consumption grows, you can expect that tracking spend, quantifying benefits and controlling expenditure will become an ever more important part of the story.