Hard Savings, Soft Savings, and the One Question AI Business Cases Never Ask
"We'll save each employee two hours per week" sounds like $1.56M. The financial reality depends on a question almost no one asks — and the answer separates credible business cases from wishful ones.
This line appears in almost every AI business case: "We'll save each employee two hours per week." The math is compelling. Two hundred employees at $75/hr is $1.56M. Except it almost certainly isn't. Here's the distinction that changes everything.
"We'll save each employee two hours per week" — sounds like $1.56M. The financial reality depends entirely on a question almost no one asks.
Organizations consistently overestimate AI-driven cost savings by conflating productivity improvements with realized financial value. The conversion rate from time saved to dollars saved averages 34% of the modelled figure in the first year of deployment.— Deloitte Insights, State of AI in the Enterprise, 5th Edition, 2022 1
Not because the two hours are fictional. The efficiency gain is usually real. The problem is what happens — or more precisely, what doesn't happen — to those hours after the AI goes live.