AI token costs: a new spin on a very, very old problem

This will undoubtedly be the flavour of the month across the internet, particularly on platforms such as LinkedIn. People will suddenly be saying, “Aha! AI isn’t saving the world. CEOs are seeing the cost of all that token usage and realising that they shouldn’t have replaced people.”

Yes, some CEOs will be receiving unexpectedly large bills, but there is nothing new about the underlying problem. It is the same challenge every corporation faces when assessing value for money and trying to understand the total cost of a decision before committing to it.

My favourite recurring example is the comparison between contractors and permanent employees. Taken as a whole, a good contractor does not cost more than a permanent employee, provided you pay a sane market rate and you get what you asked for delivery-wise. Permanent employees come with many additional and often less visible costs, including benefits, training, leave and potential employment liabilities.

This does not mean that one option is automatically better than the other. It simply means that avoiding consultants or contractors does not always produce the savings an organisation expects. A good consultant who delivers genuine value is as good a deal as a dedicated employee. {This is a shameless plug}.

The same principle has appeared throughout the history of business outsourcing. It may look inexpensive to outsource work to the cheapest available supplier in another country, but is it really cheaper if the result is increasing technical debt and creating remediation costs further down the line?

Going back even further, buying cheap tools may appear to be a cost-saving exercise. However, if they need to be replaced repeatedly, they may ultimately cost far more than buying the right tools in the first place.

AI is no different. Every generation falls for some version of the same promise. When something appears too good to be true, it usually is. Everything has a cost, and there is no such thing as a free lunch.

What we need to avoid now is another knee jerk reaction. AI is brilliant and is a major step up in what corporations do day to day. However, it is not a universal solution, and its costs go beyond simply doing the work and providing the necessary computing power.

Vast amounts of investment have been poured into AI companies, and those investors will eventually expect a return. One way or another, that is likely to mean that prices will rise and costs will increase.

So, we return to the same advice that finance departments have been giving organisations since time immemorial: look at the complete cost of a decision.

Do not ask only how much something will cost this year. Ask what it could cost over the next ten years. Consider the supporting systems, the people, the remediation work, the supplier risks and the potential cost of changing direction later.

Before making large-scale changes, take the time to understand what you are buying, what it will replace and how much the service is likely to cost over its entire lifetime.

PowerPoint and accessibility

As a deeply technical person, I have always slightly resented PowerPoint. It can feel like communication with extra steps, or like turning everything into a very basic “See Spot run” version of the world. That said, I am aware that, from a manager’s point of view, when they have so much information thrown across their desk, something neatly laid out and clear can make their job much easier.

However, I have recently been lucky enough to work with someone with significant accessibility needs, and I am now seeing PowerPoint in an even grimmer light.

Often, other forms of communication are asked to be converted into a PowerPoint slide for the sake of presentation, even when the email containing the original data is perfectly readable by everybody. Yet the expectation remains that it has to be fancied up before adult humans are considered capable of coping with it.

This has always struck me as slightly annoying and needless work, but it had never really occurred to me how much of a non-inclusive pain it can be for people with accessibility issues.

A lot of the templates people use for PowerPoint, particularly those from larger vendors, are designed with sheer beauty in mind. They are often created by professional designers, and they can look brilliant. But they can also be an absolute devil to edit if you are not fully able-bodied and a wizard with a mouse. They are often far more like works of art than practical means of communication.

I do appreciate how good a polished PowerPoint slide can look, and I do appreciate the clarity they can sometimes bring. But are they always necessary? Do we need to produce a beautiful slide rather than one that is merely clear, easy to edit, and suitable for communication?

So next time you are adding complex background images and hundreds of little dots to make a Gantt chart, have a think about how someone who only has voice commands would edit it.

Move 37: learning from a little AI history

This might sound like a strange phrase, because AI, at least in the form most people now recognise it, has only really been around for a few years. But there is already AI history, and some moments that have been dismissed in one region or country have been fundamental in another.

One example that I think is well worth reading about, especially if you are interested in how China came to view AI, is the AlphaGo tournament, where an AI beat one of the world’s best Go players.

To many of us who had already seen similar things happen with chess, this felt like another incremental step. Computers had been getting better and better, and sooner or later they were going to beat humans at more complex board games. Chess had already had its Deep Blue moment, so AlphaGo could easily be seen as the next stage in the same thing.

But Go is different.

If you watch some of the videos about the match, particularly those that cover Chinese reactions to it, one move stands out: Move 37. In that move, the AI did something that was classed by many observers as almost alien. Mathematically, it was simply finding a logical gap in a progression. It was a move that worked, and there was no real reason why it should not have been played. But up to that point, it looked completely weird and different.

Because this happened within a subject that was culturally important and widely understood, it helped redefine, to a certain extent, how China saw AI. From that point on, AI was taken far more seriously, contributing to the enormous effort and investment that followed.

I will put a link to a video below, but it is well worth watching.

Corporate term: “Tantric delivery”

Definition:

A delivery that goes on and on, but never quite reaches a conclusion.

Explanation:

I must admit that this is partially borrowed from Rory Sutherland, who has used the word “tantric” in the context of sectors. However, you often see tantric deliveries in projects, particularly regulatory or administrative projects.

A tantric delivery is a project that continues for an extended period but never reaches its climax. It often feels this way because no one is willing to take responsibility, take ownership, or sign off on anything. Instead, the project becomes trapped in increasingly fine-grained paperwork, approvals and process steps.

Also such projects can be caused because of never-ending scope creep or a set of deliverables that change faster than they can be delivered upon

As a result, the delivery never seems to get past its final set of bottlenecks or goes live. It is always nearly finished, always close to being signed off, and always somehow still not delivered.

 

Disclaimer: As always these posts are not aimed at anyone client or employer and are just my personal observations over a lifetime of dealing with both management and frontline associates.

Keeping Social Rewards for Permanent Staff.

A slightly odd, old-fashioned practice that I have always favoured as a long-term contractor is that favours, praise and rewards should be reserved for permanent members of staff, not contractors.

As a contractor, you receive your remuneration directly in the form of money, so you should not really need anything additional. Yes, public praise can be nice for your reputation and can help with securing future work, but I have found that it does not need to be displayed openly. Merely having a list of people for whom you have done excellent work and who remember that tends to be the best long-term reward. Public recognition further up the ranks is not really necessary.

Although this may sound like an odd, humble brag or slightly self-effacing view, it is one that has some basis in history. During and before the First World War, some military traditions treated medals and formal rewards as things intended primarily for career soldiers, where they could support rank, status and advancement. The thinking was that such honours were, in a sense, less useful when given to conscripted soldiers who would only be with the regiment for the duration of that conflict.

I have found that the same broad idea can help with contractor and permanent staff relations. Contractors should not really be receiving extra rewards, such as public praise or internal recognition, because they are already being rewarded through their rate and contract. That recognition is often better spent on permanent staff, for whom it can support morale, career development and a sense of belonging.

This is only a personal viewpoint, but it is one that has stood me in good stead.