This blog is part of our “AI in Auto Retail and Finance” series, which explores how AI transforms the auto industry, from reducing costs to improving efficiencies. Check out our other blogs on understanding AI, enhancing process efficiencies, AI-based co-pilots, and the revolutionary changes AI brings to auto retail and finance.
Controlling costs is crucial for success and growth in the fast-moving world of auto retail and finance. One key business focus is the Total Cost of Ownership (TCO), which includes all expenses related to acquiring, operating, and maintaining vehicles and financial systems. Lowering TCO can boost profits, streamline operations, and improve customer satisfaction, making it a top priority for dealerships, lenders, and other stakeholders in the industry.
Reducing TCO allows businesses to reinvest in growth opportunities like expanding inventory, enhancing customer service, and adopting new technologies. It also means more competitive pricing, which helps attract and retain customers.
This blog will explore how AI can significantly reduce TCO in document processing for loan approval.
Section 1: Investment Costs
Setup Investment/Cost
Implementing AI solutions involves initial setup costs such as software procurement, hardware purchases, and initial configuration expenses. AI can streamline these processes by automating configuration tasks and optimizing resource allocation, thereby reducing initial investment requirements.
Infrastructure Cost
Maintaining AI systems incurs ongoing infrastructure costs, including servers, cloud services, and data storage expenses. AI can optimize resource utilization, ensuring efficient use of existing infrastructure and minimizing these costs. For instance, AI can dynamically allocate cloud resources based on demand, reducing unnecessary expenditure.
Template-Based Setup Cost
Creating and maintaining templates for OCR-based document processing involves template development and update costs. By leveraging machine vision-based models, AI can dynamically read unstructured documents at a rapid scale and speed, thus significantly reducing these setup costs. By learning from data patterns, AI systems can generate and update templates with minimal human intervention.
Section 2: Technology Costs
Integration Cost
Integrating AI systems with existing infrastructure can be costly, involving API development, data migration, and system integration. AI can facilitate seamless integration using advanced algorithms to automate data mapping and transfer processes, thereby minimizing integration costs.
Custom Feature Rollout Cost
Developing and deploying custom AI features entails development, testing, and implementation costs. AI can accelerate these processes using pre-trained models and automated testing frameworks, reducing rollout costs. This way, AI allows for faster deployment of new features with minimal resource expenditure.
Maintenance & Configuration Release Cost
Ongoing maintenance and configuration releases for AI systems require updates, patches, and bug fixes. AI can automate many of these maintenance tasks, such as predictive maintenance and automated patching, reducing ongoing maintenance costs and ensuring systems remain up-to-date with minimal downtime.
System Downtime Cost
System downtime can severely impact operational efficiency and revenue. AI can minimize downtime through proactive maintenance, automated recovery processes, and real-time monitoring. By predicting potential failures and addressing them before they occur, AI ensures continuous operation and reduces the costs associated with downtime.
Per Page Scanning, Classification, Extraction Cost
Document processing tasks such as scanning, classification, and data extraction using non-AI approaches (e.g., OCR) incur significant costs. AI can automate these tasks, dramatically reducing per-page costs. AI-powered tools can process thousands of documents in seconds, ensuring high accuracy and efficiency.
License and Subscription Fees
Software licenses and subscription fees add to the overall costs of AI systems. AI vendors often offer flexible pricing models, such as pay-as-you-go, which can reduce licensing costs. Additionally, AI’s ability to optimize software usage ensures businesses only pay for what they use.
Section 3: Operational Costs
Labor Cost for Document Fixing
Manual document correction and validation require considerable labor. Traditional non-AI methods involve a significant labor component to fill the gaps left by document processing tools such as OCR. AI can reduce the need for manual intervention by significantly enhancing the accuracy of processed documents, thus minimizing labor costs. With AI, documents processed are over 98% accurate, reducing the time and effort required for manual corrections.
Training Cost
Training employees on AI systems and processes involves significant expenses for training programs and materials. AI can provide intuitive interfaces and automated training modules, making it easier for employees to learn and adapt to new systems. This way, AI reduces training costs and speeds up the onboarding process.
Opportunity Cost Due to Longer Cycle Time for Custom Feature Development
Delays in custom feature development result in opportunity costs. AI can expedite feature development cycles by automating repetitive tasks and providing rapid prototyping tools, minimizing opportunity costs. This way, AI ensures businesses can quickly adapt to market demands and stay competitive.
AI is a game-changer for the automotive retail and finance industry, providing powerful tools to reduce costs and improve efficiency. Embracing AI allows companies to remain competitive, foster innovation, and ensure long-term profitability in a rapidly evolving market.
Read the other blogs in this series: