Total Cost of Ownership
The full cost of an AI tool or workflow over its working life, not only the subscription or the build invoice. For a workflow it covers model usage, platform and hosting, human review, maintenance and governance.
What it means in practice
The running cost article breaks a workflow’s cost into five parts and gives a worked example with no prices. The off-the-shelf and custom comparison adds what a subscription’s invoice leaves out: manual steps where the tool does not fit, licences renewed for capability nobody uses and staff time spent working around it. The cloud and on-premise comparison applies the same thinking to infrastructure.
How we use it
The running cost article’s advice is to start with the narrowest process worth automating, because a workflow built to handle every exception on day one is the most expensive shape to run, and to ask for the cost per completed task. Its closing questions to ask before agreeing a budget are a practical way to set out the whole cost before committing.
FAQ
Questions about total cost of Ownership
What are the hidden costs of an AI Workflow?
The running cost article names human review as the part most often left out of the estimate, alongside maintenance and governance. Model usage is usually the smallest part, because one business task processes very little text.
How should two AI options be compared on cost?
On the cost per completed task rather than the cost per model call, and with the total cost of ownership set out for both. The running cost article says a subscription and a custom build differ in the shape of their costs, not only the size.
What it means for a Business
Two options can only be compared fairly when the whole cost of each is set out. A chatbot bought for a process can look cheap to run until the hours spent copying its output into other systems are counted, and human review can cancel the saving if checking takes nearly as long as the work.
Ready to put this to work?
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