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Tokens Are Not the New Billable Hour (and Confusing the Two Will Be Costly)

Tokens Are Not the New Billable Hour (and Confusing the Two Will Be Costly)

Summary

IT services companies have traditionally charged clients based on hours worked by humans. With the growing use of AI, companies now use "tokens," a digital measure of AI work, but tokens should not replace billable hours as a way to measure value. The key is to combine human skills and AI tokens effectively to deliver better business results rather than just focus on token usage.

Key Facts

  • IT service firms used billable hours to charge clients for human work in the past.
  • AI is becoming part of how these companies deliver services using digital work measured by tokens.
  • Tokens count AI use but do not directly show the value delivered to clients.
  • Focusing only on token usage can make costs rise without better business outcomes.
  • Companies need to blend human expertise and AI tokens to improve reliability and efficiency.
  • Each token interaction creates data that helps improve service delivery over time.
  • Successful companies will charge based on outcomes, not just hours or tokens used.
  • Effective management of tokens and human work together offers the most predictable and valuable results.
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