{"id":1906,"date":"2026-07-02T08:00:34","date_gmt":"2026-07-02T08:00:34","guid":{"rendered":"https:\/\/www.talenthawk.com\/?p=1906"},"modified":"2026-07-02T08:10:08","modified_gmt":"2026-07-02T08:10:08","slug":"the-hidden-economics-of-ai-erp-are-we-creating-a-new-cost-problem","status":"publish","type":"post","link":"https:\/\/www.talenthawk.com\/blogs\/the-hidden-economics-of-ai-erp-are-we-creating-a-new-cost-problem\/","title":{"rendered":"The Hidden Economics of AI ERP \u2013 Are We Creating a New Cost Problem?"},"content":{"rendered":"

For twenty years, the technology industry sold a simple message.<\/p>\n

Software would reduce costs.<\/p>\n

Cloud software would reduce infrastructure costs.<\/p>\n

Automation would reduce labour costs.<\/p>\n

Now AI is being sold as the next stage of that journey.<\/p>\n

But a difficult question is emerging.<\/p>\n

What if AI reduces some costs while simultaneously creating entirely new categories of expenditure?<\/p>\n

Across SAP, Oracle Fusion and Microsoft Dynamics 365 Business Central, the AI proposition appears compelling.<\/p>\n

Yet many organisations are struggling with a fundamental issue.<\/p>\n

How do you measure the value?<\/p>\n

What customers say they like<\/strong><\/h3>\n

SAP customer examples include De Agostini reporting approximately 500 hours saved every month and Team Liquid reporting the elimination of approximately 10,000 hours of manual effort.<\/p>\n

Those numbers are impressive.<\/p>\n

But what do they actually mean financially?<\/p>\n

This is where many organisations begin to struggle.<\/p>\n

The employee versus AI equation<\/strong><\/h3>\n

Consider a finance administrator earning \u00a340,000 per year.<\/p>\n

If AI saves 20% of that person’s time, has the organisation saved \u00a38,000?<\/p>\n

Not necessarily.<\/p>\n

The employee still receives the same salary.<\/p>\n

The organisation only benefits financially if that efficiency creates measurable capacity, revenue growth or avoided hiring costs.<\/p>\n

Many AI business cases count time saved as money saved.<\/p>\n

The two are not always the same thing.<\/p>\n

Bain & Company has highlighted that while organisations are aggressively investing in AI, many continue to struggle to demonstrate realised financial value beyond productivity improvements.<\/p>\n

The distinction matters.<\/p>\n

Productivity is not the same as profit.<\/p>\n

The downstream costs nobody includes<\/strong><\/h3>\n

Many organisations underestimate:<\/p>\n

    \n
  • Data remediation<\/li>\n
  • Governance<\/li>\n
  • Security controls<\/li>\n
  • Change management<\/li>\n
  • AI monitoring<\/li>\n
  • Usage management<\/li>\n
  • Consumption charges<\/li>\n<\/ul>\n

    The result is that AI projects frequently cost more than anticipated.<\/p>\n

    Not because the technology fails.<\/p>\n

    But because successful adoption creates additional demand.<\/p>\n

    The cloud lesson<\/strong><\/h3>\n

    Many organisations believed cloud computing would dramatically reduce costs.<\/p>\n

    Initially, it often did.<\/p>\n

    Then workloads increased.<\/p>\n

    Storage expanded.<\/p>\n

    Integrations multiplied.<\/p>\n

    Monthly bills grew.<\/p>\n

    AI may follow the same pattern.<\/p>\n

    The danger is not that AI fails.<\/p>\n

    The danger is that it succeeds.<\/p>\n

    Successful AI adoption drives more usage.<\/p>\n

    More usage drives more consumption.<\/p>\n

    More consumption drives more spending.<\/p>\n

    The challenge facing CIOs and CFOs is understanding where that curve stops.<\/p>\n

    Because the objective was never to buy artificial intelligence.<\/p>\n

    The objective was to improve business performance.<\/p>\n","protected":false},"excerpt":{"rendered":"

    For twenty years, the technology industry sold a simple message. Software would reduce costs. Cloud software would reduce infrastructure costs. Automation would reduce labour costs. Now AI is being sold as the next stage of that journey. But a difficult question is emerging. What if AI reduces some costs while simultaneously creating entirely new categories…<\/p>\n","protected":false},"author":7,"featured_media":1909,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","footnotes":""},"categories":[37],"tags":[],"class_list":["post-1906","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/posts\/1906","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/comments?post=1906"}],"version-history":[{"count":1,"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/posts\/1906\/revisions"}],"predecessor-version":[{"id":1911,"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/posts\/1906\/revisions\/1911"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/media\/1909"}],"wp:attachment":[{"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/media?parent=1906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/categories?post=1906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.talenthawk.com\/af-api\/wp\/v2\/tags?post=1906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}