Board of Directors - AI Plan
- John Debrincat
- Oct 10
- 8 min read
Plan for Use of AI in Your Business
Where does the buck stop? At the company Board of Directors. Ask a simple question at the next board meeting. Has AI been used in any company project?
If there is a answer other than YES it would be surprising. Access to AI capabilities is in easy reach. Often embedded in systems like Microsoft 365 or even Google we find AI capabilities. AI can be a fantastic tool used correctly or it can threaten the foundations of the enterprise. A plan for adoption, use, management and risk is essential.
Deloitte Case Example
Deloitte Australia produced a report for the Department of Employment and Workplace Relations (DEWR) assessing the “Targeted Compliance Framework” (an IT system used in welfare compliance).
After publication, academics and media uncovered numerous errors:
• Citations to academic works that don’t exist
• A fabricated quote attributed to a Federal Court judgment
• Misattributed or incorrect footnotes and references
Deloitte later revised the report, removed or corrected the false references and added disclosure that generative AI tools (specifically Azure OpenAI GPT-4o) had been used in drafting.
Deloitte has agreed to partially refund the final instalment (AU$440,000 contract) as part of resolution with DEWR.
DEWR states that, despite corrections, the “substantive content, findings and recommendations” remain unchanged.
Key issues exposed
AI “hallucination” risk; Some errors appear to be classically AI-style fabrications: invented sources, spurious quotes — things a human with domain knowledge would unlikely make.
Lack of upfront disclosure / transparency; The initial version did not clearly state that AI tools were used. The disclosure came later during revision.
Insufficient human oversight or verification; Errors indicate that the AI-generated content was inadequately checked. Even after corrections, critics argue that the core methodology may rest on shaky foundations.
Reputational & governance impact; The episode triggered political criticism, calls for stricter procurement rules, and questions about accountability in AI-augmented consulting.
Building a Plan
Building an Artificial Intelligence (AI) plan for your business is essential to stay competitive and future-proof your operations. An AI strategy can drive efficiency by automating repetitive tasks, improving decision-making through data-driven insights, and enhancing customer experience with personalised interactions. It also allows businesses to scale more easily, manage resources efficiently, and innovate faster by leveraging AI-driven creativity in product development and marketing.
Implemented correctly, AI can offer the potential for significant cost savings by reducing labour expenses and operational inefficiencies. AI based tools can reduce cybersecurity risks by automating security monitoring and fraud detection. AI has important potential for customer service, sales, marketing, and operational management. Having a clear plan ensures the right tools and policies are implemented to maximise benefits while mitigating risks.
There are different types of AI from Narrow AI with examples like Machine learning and Natural Language Processing. Generative AI, like ChatGPT, fits into Narrow AI. This is where this article is focused. But there are more theoretical, or hypothetical, types of AI such as Theory of Mind and Self Aware AI that are, right now, just long term goals.
Developing an AI plan helps businesses capitalise on opportunities and stay ahead in a rapidly evolving market.
Business Benefits of Using AI
The benefits that the use of AI might bring to a business are influenced by the type and size of the business, the skills available and potential benefits that might be obtained. Implementing a tool or solution because it’s the today idea that everyone is talking about will not lead to success or improvement. Look for and aim for:
Increased Efficiency, AI can automate repetitive and time-consuming tasks, such as data entry, customer support, or inventory management, freeing up employees to focus on higher-value activities.
Cost Reduction by automating routine tasks, AI can reduce labour costs and improve operational efficiency, leading to savings on wages, overtime, and errors.
Improved Decision-Making using AI-powered analytics and insights can help businesses make data-driven decisions, leading to better forecasting, market analysis, and customer behaviour predictions.
Enhanced Customer Experience using AI-driven chatbots and personalized recommendations can improve customer satisfaction by providing real-time support and personalized experiences.
Scalability with AI systems that can handle increasing volumes of data and customer interactions without requiring proportional increases in staff or infrastructure.
Risk Management using AI to monitor for potential risks, such as fraud detection or cybersecurity threats, and take preventive measures.
Profitable Use Cases
There are many potential use cases in every business for AI. Look for the most opportune use case that best fits your business and skills.
Customer Service and Support improves using AI chatbots for 24/7 customer support which can reduce response times and free up human agents to handle more complex inquiries.
Sales and Marketing using AI to automate lead generation, personalised marketing campaigns, and automating follow-up emails, improving conversion rates and customer engagement.
Inventory and Supply Chain Management, AI can optimise inventory levels, predict demand trends, and streamline supply chain operations, leading to reduced waste and improved logistics.
Data Analytics, AI can process and analyse large datasets to uncover valuable insights into customer behaviour, market trends, and operational performance, driving strategic business decisions.
Human Resources, AI can automate the recruitment process by screening resumes, analysing employee performance, and predicting workforce needs.
Planning the Use of AI for Business
Many boards and businesses fail to plan and take on an implementation without understanding the process. It is essential that as business managers or board members you build a business plan and review for successes and failures. The typical plan might follow these steps:
Assess Business Needs, which begins by identifying pain points or inefficiencies in the business where AI could provide value. Areas such as customer service, inventory management, and marketing are typical starting points.
Define Objectives, set clear, measurable goals for AI deployment, such as improving customer response times by 20%, increasing sales leads by 15%, or reducing operational costs by 10%.
Vendor and Tools Selection, depending on the identified needs, select appropriate AI tools or services. For SMBs, cloud-based AI solutions such as Google Cloud AI, Microsoft Azure AI, or off-the-shelf AI tools like chatbots, and CRM platforms, are often ideal for ease of implementation and scalability.
Pilot the Solution, use a proof of concept to start small by piloting the AI solution in one department or with one process. Use the pilot phase to gather data, measure success, and identify areas for improvement.
Integration with Existing Systems will ensure the AI tools integrate smoothly with current software platforms such as CRM, ERP, or supply chain management systems.
Train Employees, provide learning plan to employees to use AI tools effectively. This includes both technical training and education on how AI will affect their day-to-day roles.
Monitor and Optimise, continuously monitor AI systems for performance, accuracy, and alignment with business objectives. Use AI analytics to track key performance indicators (KPIs) and optimize performance as needed.
Business AI Policies and Procedures
Data Privacy and Security
Implement robust data privacy policies to ensure AI systems comply with regulations like the Australia Privacy Principles or General Data Protection Regulation (GDPR) for example. Encrypt sensitive data and use cybersecurity tools to monitor for threats.
AI Ethics Policy: Establish an ethical framework for AI usage, particularly in areas like customer interactions or employee performance monitoring. Ensure AI decisions are transparent and free from bias.
Risk Mitigation Plan:
Develop a plan to manage potential AI failures or malfunctions, including having manual overrides and backup systems in place.
Employee Transition Plan:
Create policies to manage employee transitions, ensuring that workers displaced by AI are retrained or reassigned where possible.
Third-party Vendor Management:
Establish procedures for evaluating and managing third-party AI vendors, ensuring they meet the business’s security and ethical standards.
SWOT Analysis Framework
Strengths, weaknesses, opportunities and threats are the four cornerstones of a great plan. Every business will have a different set of foundation values and goals. There is no “out of the textbook” answer to the issues that might be reviewed in the SWOT meeting.
Strengths:
Increased operational efficiency.
Improved customer engagement and satisfaction.
Cost reduction through automation.
Enhanced decision-making via data-driven insights.
Weaknesses:
Initial cost of AI implementation.
Lack of in-house expertise may require reliance on third-party vendors.
Possible employee resistance to AI adoption.
Potential for system failures or inaccurate outputs.
Opportunities:
Gaining a competitive edge by adopting AI early.
Expanding into new markets through better data analytics.
Reducing costs and improving profit margins.
Leveraging AI for personalized customer experiences to boost loyalty.
Threats:
Data privacy or security breaches.
AI system malfunctions leading to operational downtime.
Ethical concerns over AI decision-making (e.g., biases in algorithms).
Rapidly evolving AI technology may render current solutions obsolete.
Business Benefits versus Costs and Risks
If you are building a plan for AI then you need to be able to articulate the elements that weight up the benefits versus the cost of execution and risk of failure. This will enable the management and teams to look at the full impact on the business.
Delivering Business Improvements
Increases productivity by automating repetitive tasks.
Enables businesses to make data-driven decisions quickly.
Reduces operational costs.
Enhances customer experiences.
Scalable and can grow with the business.
Costs and Risks
Initial setup can be costly.
Potential job displacement may create employee dissatisfaction.
Requires ongoing maintenance and monitoring.
Possible bias in AI decision-making.
Risk of security breaches and data privacy issues.
By carefully considering these factors, an SMB can strategically plan for AI integration, maximising its benefits while mitigating potential risks.
Supplier / Consultant Contract Considerations
Artificial Intelligence is transforming how we work, innovate, and deliver outcomes — but as AI becomes more embedded in business processes, a fundamental question arises:
should AI usage be declared and regulated in every contract?
Why We Need AI Usage Clauses?
Many organisations now rely on AI tools to write content, analyse data, design systems, or even make decisions. Yet few contracts explicitly address how, when, or if AI can be used. This creates grey areas in accountability, data ownership, and liability.
An AI Usage Clause introduces transparency and trust. It clarifies what’s human-driven, what’s AI-assisted, and what standards must be met when AI plays a role in producing deliverables.
What the Clause Should Include:
Disclosure: No AI use unless declared and agreed upon by both parties.
Validation: All outputs produced with AI must be validated by a human process — independent of AI.
Responsibility: Errors caused by AI must be corrected at no cost to the client.
Accountability: If project failure results from AI usage, penalties should apply.
Why It Matters
AI is powerful, but not infallible. Contracts built on trust, ethics, and responsibility ensure that AI supports, rather than undermines, professional standards. As AI continues to shape industries, embedding clear guidelines in contracts will protect both clients and creators from unforeseen risks. Just as cybersecurity and data privacy clauses became standard over the past decade, AI usage clauses will likely become the next essential element in modern agreements.
Wrapping it Up
An AI Usage Clause in contacts and agreements should require disclosure when AI is used requiring approval, validation by humans, and backed by accountability. If errors or failures occur because of AI, they should be fixed at no cost or face penalties. This isn’t about limiting innovation it’s about ensuring transparency, trust, and responsibility in the age of intelligent automation. Read the full article to explore why AI clauses could become as essential as data privacy terms in every modern agreement.
Business needs that are addressed vary between the different AI solutions and tools available, from content creation and customer interaction to technical development and marketing, offering scalability and ease of use for businesses across industries.
References:
Author: John Debrincat FACS, MAICD
Lead Consultant
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