Corporate Chargeback System for AI Citizen Development

Discover a solution where the costs and benefits of AI projects are accrued to the business units justly and transparently.

Artificial intelligence (AI) is fundamentally transforming how life sciences companies function, including how they accomplish research and development (R&D), manage operations, and enhance customer service.

But when they try to implement and scale AI citizen development initiatives, cost management becomes a stumbling block.

A corporate chargeback system provides a solution where the costs and benefits of AI projects are accrued to the respective business units justly and transparently.

Understanding Corporate Chargeback Systems

In contrast to an accounting model where one department bears all IT costs and those costs are treated as overhead, a corporate chargeback system puts financial responsibility on all departments. This system establishes equality, fairness, and accountability and encourages every part of the business to engage in and support AI endeavors.

Step-by-Step Implementation of a Corporate Chargeback System

When establishing the chargeback system for your AI citizen development program:

Determine costs and benefits. These may include:

Data storage and data processing costs
Training costs for IT and data science
Development and deployment costs
Increased business revenue and profit
Improved operational efficiency and productivity
Greater customer satisfaction and loyalty

Calculate cost-benefit allocations. Develop a formula that considers user hours, data usage, or the level of AI integration in a department’s processes. The goal is to quantify the financial impact of AI in the organization that is fair and commensurate to the actual use or benefit derived. For example, platform subscription fees could be assigned to departments that use an AI platform, while data storage fees might land in departments that manage large datasets.

Communicate the process with transparency. Share with stakeholders the method, reason, and outcome of the process; this is the most critical aspect in obtaining their buy-in and ensuring accountability. Gather feedback to further refine and improve the chargeback system.

Apply and monitor allocations. Redistribute costs based on allocations by modifying budgets or transferring monies among departments. Monitor the impact of the chargeback system and assess its effectiveness in order to make adjustments and ensure that it continues to be fair and transparent while promoting AI in your organization.

Share the Cost and Benefit of AI Citizen Development Across Your Organization

Developing a corporate chargeback system for AI projects may sound cumbersome, but these steps help you secure investments in AI, realize the benefits, and share costs across the organization. You’ll optimize financial management and enhance coordination and support between departments for AI initiatives to drive organized and sustainable innovation.

Would your organization benefit from a similar approach to AI investment? Let USDM help you customize this model for your organizational needs and challenges. Contact us today!