Key facts
- EY is creating an "AI Value Realization Office" to manage its AI investments.
- The new office will govern AI spending, monitor usage, and determine which initiatives to scale.
- EY-Parthenon research suggests 75% of AI's enterprise value comes from cross-functional applications.
- The office aims to ensure AI initiatives change business performance and capture value across departments.
- EY has reduced token consumption by 60% through an AI router and other governance strategies.
- A recent survey indicated 98% of decision-makers are reconsidering AI approaches due to token spending costs.
EY is establishing a new function, the "AI Value Realization Office," to centralize its artificial intelligence spending and ensure the technology delivers measurable impact. Dan Diasio, EY's global consulting AI leader, stated the office will govern AI spending, drive returns, monitor usage, decide which AI initiatives to scale, and oversee AI's impact on jobs.
Diasio explained that traditional departmental budgeting often leaves value on the table, as AI's potential payoff frequently spans multiple functions. EY-Parthenon research indicates that 75% of potential enterprise value from AI comes from these horizontal value streams, compared to 25% from projects confined to individual departments.
The new office will focus on the overall value strategy, assessing how AI initiatives change business performance and ensuring funding flows to the most significant opportunities. This move mirrors historical corporate function developments, such as HR during the Great Depression and treasury teams in the 1970s.
EY is also acting as "client zero" for AI, testing the technology internally to demonstrate its capabilities to clients. The firm committed $1.4 billion in 2023 to build the foundation for its EY.ai platform. To manage costs, EY has implemented an "invisible" AI router that directs employees to the most efficient model, reducing token consumption by 60% since April.
As AI providers adjust pricing models, clients are becoming more aware of the actual costs. A recent EY US AI Pulse survey found that 98% of 534 senior decision-makers are reconsidering their AI strategies due to token spending. Diasio believes that giving AI governance more authority through a dedicated function will be critical for clients scaling AI.