An AI business case arrives looking polished, with upward-pointing charts and bold promises of operational transformation. Whether from external vendors or internal IT leadership, these proposals share a critical oversight: they market technology rather than business outcomes.
A Finance Director's responsibility isn't evaluating neural architecture but validating the underlying promise. This role functions as a stress-test for AI proposals.
The Soft Savings Fallacy
The most prevalent misrepresentation involves efficiency calculations claiming time savings convert directly to cost reductions. A typical example:
"AI tool saves 2 hours per employee weekly. 100 employees. £40/hour rate = £352,000 annual savings."
This projection is problematic. Without headcount reduction or hour cuts, "savings" become capacity—only valuable when filled with profit-generating activities.
Strategy: Separate efficiency claims into two categories:
Cashable Savings — Explicit spending elimination (cancelled recruitment, reduced vendor fees)
Capacity Creation — Recovered time requiring reinvestment
Capacity-dependent proposals represent productivity bets requiring higher proof burdens.
The Pilot Trap
Pilot results often appear misleading because controlled environments feature enthusiastic participants, clean datasets, and extensive oversight. Production environments contain skeptical users, messy data, and minimal support.
Edge cases—unusual scenarios beyond typical conditions—frequently emerge during scaling, causing performance degradation before recovery.
Strategy: Apply conservative adjustments to pilot metrics. If pilots showed 90% accuracy, model at 70%. Projects remaining viable at reduced performance levels are robust.
The Cost of Verification
Generative AI generates plausible but potentially inaccurate outputs requiring human review. This changes job functions rather than eliminating positions.
Example workflow:
- Manual drafting: 45 minutes
- AI generation: 1 minute
- Review/correction: 30 minutes
- Net savings: 14 minutes (not 44)
Verification requires concentration and catches subtle errors humans easily overlook.
Strategy: Demand workflow diagrams showing verification steps and associated human costs deducted from savings projections.
The Integration Black Hole
"Seamless integration" typically means API availability, not functional operational integration. Legacy systems (Sage 200, older Dynamics versions, custom databases) weren't designed for modern API calls.
Implementation budgets are frequently severely underestimated. Real integration requires:
- Mapping — Ensuring consistent definitions across systems
- Security — Preventing unauthorised data access
- Maintenance — Managing updates and compatibility
Strategy: Examine Software License-to-Professional Services ratios. Complex integrations should heavily weight services costs in year one. Disproportionate software costs signal underestimated complexity.
The Exit Strategy
Deploying AI that handles significant operational volumes creates dependency, particularly if headcount adjustments follow. Vendor price increases or model failures could leave no viable fallback if personnel were eliminated.
Strategy: All proposals require Business Continuity & Exit sections addressing:
- Manual fallback procedures if AI fails
- Data exportation capabilities upon vendor change
- Cash reserves for staff re-hiring if automation fails
The FD's Decision Matrix
Evaluate proposals through five commercial questions:
Revenue Logic — Are savings demonstrably bankable or theoretical?
Pilot Validity — Does data reflect realistic or idealized scenarios?
Net Time — Are verification costs deducted from efficiency claims?
Integration Reality — Is implementation budgeting realistic for legacy environments?
Reversibility — Can the organisation survive reverting this system?
Proposals answering honestly across all dimensions while showing positive returns merit approval. Those relying on vague promises should be rejected.
This approach represents strategic stewardship, not obstruction—positioning Finance as the "Department of Sustainable Growth."