Greg Holmes, Apptio: AI needs a new financial playbook - Ctrl Alt Lead podcast

Consumption-based pricing has changed the game

AI has created a fresh challenge for technology leaders: how do you control spending when costs go up every time somebody uses the service?

That question sits at the heart of the latest Ctrl Alt Lead podcast with Greg Holmes, field CTO at Apptio, an IBM company. He argues that AI is forcing organisations to rethink not only their financial controls, but how they measure technology value.

Greg believes many organisations are still applying old thinking to a new economic model.

"It used to be that before you made any big investment or a new cost was going to come in, you'd have a review, you'd have a business case with finance, but so much AI cost is operational. You do the thing, then you get billed for it, and there's not really a financial control point before you're doing the things."

Unlike traditional spending, where costs are reviewed and approved upfront, AI's consumption-based pricing requires ongoing oversight. For Greg, that means bringing finance, business and technology teams together to speak a common language – as well as changing how organisations think about the return on investment.

"ROI used to be a dirty word... but I think now it should be looked on as a continuous operational measurement."

AI is a combination of opex and capex, and judging its RoI should, in the same fashion, consider both the operational cost and the lifetime value. Greg says organisations should continuously assess whether their AI initiatives are delivering value relative to the costs required to support them, rather than treating it as a one-off business case exercise.

Being that Apptio is part of IBM, we naturally also touched on the product area that drove Big Blue to success when it was starting out: mainframes.

Greg pushed back against the idea that AI inevitably means moving away from these platforms. While mainframes are often discussed as a modernisation challenge, he argues that many organisations continue to derive value from them, and points out that they can integrate well into emerging AI ecosystems.

Looking ahead, Greg predicts AI governance will become significant enough to justify dedicated leadership, saying, "I think you actually need a chief AI officer for an organisation to make it work."

As AI spending, governance and platform decisions become more complex, he believes organisations will need leaders capable of speaking the languages of finance, technology and business simultaneously.

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