What is a Cost-Benefit Analysis (CBA) in the context of AI implementation?

• A. A thorough evaluation of costs, including security controls, alongside potential productivity gains.
• B. A simple tally of hardware costs.
• C. Only a qualitative assessment of risks.
• D. A plan to reduce staff numbers.

Answer: (A)

Cost-benefit analysis in AI implementation means weighing the full spectrum of costs—initial investment, integration, data and infrastructure needs, security controls, ongoing maintenance, and governance—against the total benefits, such as productivity gains, faster decision-making, improved accuracy, cost savings, and risk reduction. It aims to quantify value over an appropriate time horizon, often incorporating risk and uncertainty to inform a go/no-go decision.

This best answer reflects that comprehensive view: it considers security controls as part of the costs and balances them with potential productivity improvements, capturing both explicit and implicit value. A narrow focus on hardware costs misses ongoing expenses and benefits; evaluating only risks qualitatively ignores measurable productivity gains; and a plan to reduce staff numbers is a staffing strategy, not a full cost-benefit evaluation.