Quantifying AI Cost-Benefit Analysis

Short summary

This article provides a three-layer framework for calculating true AI ROI by quantifying enterprise labor costs (accounting for location, benefits) and AI token expenses. It offers concrete formulas to measure efficiency gains, cost proportions, and equivalent workforce impact. Teams can apply this approach to justify AI adoption with data rather than subjective productivity claims.

• •Three-layer model: input layer (salary data, city coefficients, token usage), calculation layer (total cost accounting), output layer (ROI metrics)
• •Account for hidden costs: location premiums (30% higher in first-tier cities), benefits, equipment amortization—not just base salary
• •Calculate composite AI pricing based on token economics (input vs output ratios) to determine annual cost and ROI thresholds

Generated with AI, which can make mistakes.