Greg Holmes, Field CTO for EMEA at Apptio, an IBM company, argues that successfully scaling intelligent automation requires financial rigour.

The “build it and they will come” model of technology adoption often leaves a hole in the budget when applied to automation. Executives frequently find that successful pilot programmes do not translate into sustainable enterprise-wide deployments because initial financial modelling ignored the realities of production scaling.

“When we integrate FinOps capabilities with automation, we’re looking at a change from being very reactive on cost management to being very proactive around value engineering,” says Holmes.

This shifts the assessment criteria for technical leaders. Rather than waiting “months or years to assess whether things are getting value,” engineering teams can track resource consumption – such as cost per transaction or API call – “straight from the beginning.”

The unit economics of scaling intelligent automation

Innovation projects face a high mortality rate. Holmes notes that around 80 percent of new innovation projects fail, often because financial opacity during the pilot phase masks future liabilities.

“If a pilot demonstrates that automating a process saves, say, 100 hours a month, leadership thinks that’s really successful,” says Holmes. “But what it fails to track is that the pilot sometimes is running on over-provisioned infrastructure, so it looks like it performs really well. But you wouldn’t over-provision to that degree during a real production rollout.”

Moving that workload to production changes the calculus. The requirements for compute, storage, and data transfer increase. “API calls can multiply, exceptions and edge cases appear at volume that might have been out of scope for the pilot phase, and then support overheads just grow as well,” he adds.

To prevent this, organisations must track the marginal cost at scale. This involves monitoring unit economics, such as the cost per customer served or cost per transaction. If the cost per customer increases as the customer base grows, the business model is flawed.

Conversely, effective scaling should see these unit costs decrease. Holmes cites a case study from Liberty Mutual where the insurer was able to find around $2.5 million of savings by bringing in consumption metrics and “not just looking at labour hours that they were saving.”

However, financial accountability cannot sit solely with the finance department. Holmes advocates for putting governance “back in the hands of the developers into their development tools and workloads.”

Integration with infrastructure-as-code tools like HashiCorp Terraform and GitHub allows organisations to enforce policies during deployment. Teams can spin up resources programmatically with immediate cost estimates.

“Rather than deploying things and then fixing them up, which gets into the whole whack-a-mole kind of problem,” Holmes explains, companies can verify they are “deploying the right things at the right time.”

When scaling intelligent automation, tension often simmers between the CFO, who focuses on return on investment, and the Head of Automation, who tracks operational metrics like hours saved.

“This translation challenge is precisely what TBM (Technology Business Management) and Apptio are designed to solve,” says Holmes. “It’s having a common language between technology and finance and with the business.”

The TBM taxonomy provides a standardised framework to reconcile these views. It maps technical resources (such as compute, storage, and labour) into IT towers and further up to business capabilities. This structure translates technical inputs into business outputs.

“I don’t necessarily know what goes into all the IT layers underneath it,” Holmes says, describing the business user’s perspective. “But because we’ve got this taxonomy, I can get a detailed bill that tells me about my service consumption and precisely which costs are driving  it to be more expensive as I consume more.”

Addressing legacy debt and budgeting for the long-term

Organisations burdened by legacy ERP systems face a binary choice: automation as a patch, or as a bridge to modernisation. Holmes warns that if a company is “just trying to mask inefficient processes and not redesign them,” they are merely “building up more technical debt.”

A total cost of ownership (TCO) approach helps determine the correct strategy. The Commonwealth Bank of Australia utilised a TCO model across 2,000 different applications – of various maturity stages – to assess their full lifecycle costs. This analysis included hidden costs such as infrastructure, labour, and the engineering time required to keep automation running.

“Just because of something’s legacy doesn’t mean you have to retire it,” says Holmes. “Some of those legacy systems are worth maintaining just because the value is so good.”

In other cases, calculating the cost of the automation wrappers required to keep an old system functional reveals a different reality. “Sometimes when you add up the TCO approach, and you’re including all these automation layers around it, you suddenly realise, the real cost of keeping that old system alive is not just the old system, it’s those extra layers,” Holmes argues.

Avoiding sticker shock requires a budgeting strategy that balances variable costs with long-term commitments. While variable costs (OPEX) offer flexibility, they can fluctuate wildly based on demand and engineering efficiency.

Holmes advises that longer-term visibility enables better investment decisions. Committing to specific technologies or platforms over a multi-year horizon allows organisations to negotiate economies of scale and standardise architecture.

“Because you’ve made those longer term commitments and you’ve standardised on different platforms and things like that, it makes it easier to build the right thing out for the long term,” Holmes says.

Combining tight management of variable costs with strategic commitments supports enterprises in scaling intelligent automation without the volatility that often derails transformation.

IBM is a key sponsor of this year’s Intelligent Automation Conference Global in London on 4-5 February 2026. Greg Holmes and other experts will be sharing their insights during the event. Be sure to check out the day one panel session, Scaling Intelligent Automation Successfully: Frameworks, Risks, and Real-World Lessons, to hear more from Holmes and swing by IBM’s booth at stand #362.

See also: Klarna backs Google UCP to power AI agent payments

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is part of TechEx and is co-located with other leading technology events including the Cyber Security & Cloud Expo. Click here for more information.

AI News is powered by TechForge Media. Explore other upcoming enterprise technology events and webinars here.

FedEx is using AI to change how package tracking and returns work for large enterprise shippers. For companies moving high volumes of goods, tracking no longer ends when a package leaves the warehouse. Customers expect real-time updates, flexible delivery options, and returns that do not turn into support tickets or delays.

That pressure is pushing logistics firms to rethink how tracking and returns operate at scale, especially across complex supply chains.

This is where artificial intelligence is starting to move from pilot projects into daily operations.

FedEx plans to roll out AI-powered tracking and returns tools designed for enterprise shippers, according to a report by PYMNTS. The tools are aimed at automating routine customer service tasks, improving visibility into shipments, and reducing friction when packages need to be rerouted or sent back.

Rather than focusing on consumer-facing chatbots, the effort centres on operational workflows that sit behind the scenes. These are the systems enterprise customers rely on to manage exceptions, returns, and delivery changes without manual intervention.

How FedEx is applying AI to package tracking

Traditional tracking systems tell customers where a package is and when it might arrive. AI-powered tracking takes a step further by utilising historical delivery data, traffic patterns, weather conditions, and network constraints to flag potential delays before they happen.

According to the PYMNTS report, FedEx’s AI tools are designed to help enterprise shippers anticipate issues earlier in the delivery process. Instead of reacting to missed delivery windows, shippers may be able to reroute packages or notify customers ahead of time.

For businesses that ship thousands of parcels per day, that shift matters. Small improvements in prediction accuracy can reduce support calls, lower refund rates, and improve customer trust, particularly in retail, healthcare, and manufacturing supply chains.

This approach also reflects a broader trend in enterprise software, in which AI is being embedded into existing systems rather than introduced as standalone tools. The goal is not to replace logistics teams, but to minimise the number of manual decisions they need to make.

Returns as an operational problem, not a customer issue

Returns are one of the most expensive parts of logistics. For enterprise shippers, particularly those in e-commerce, returns affect warehouse capacity, inventory planning, and transportation costs.

According to PYMNTS, FedEx’s AI-enabled returns tools aim to automate parts of the returns process, including label generation, routing decisions, and status updates. Companies that use AI to determine the most efficient return path may be able to reduce delays and avoid returning things to the wrong facility.

This is less about convenience and more about operational discipline. Returns that sit idle or move through the wrong channel create cost and uncertainty across the supply chain. AI systems trained on past return patterns can help standardise decisions that were previously handled case by case.

For enterprise customers, this type of automation supports scale. As return volumes fluctuate, especially during peak seasons, systems that adjust automatically reduce the need for temporary staffing or manual overrides.

What FedEx’s AI tracking approach says about enterprise adoption

What stands out in FedEx’s approach is how narrowly focused the AI use case is. There are no broad claims about transformation or reinvention. The emphasis is on reducing friction in processes that already exist.

This mirrors how other large organisations are adopting AI internally. In a separate context, Microsoft described a similar pattern in its article. The company outlined how AI tools were rolled out gradually, with clear limits, governance rules, and feedback loops.

While Microsoft’s case focused on knowledge work and FedEx’s on logistics operations, the underlying lesson is the same. AI adoption tends to work best when applied to specific activities with measurable results rather than broad promises of efficiency.

For logistics firms, those advantages include fewer delivery exceptions, lower return handling costs, and better coordination between shipping partners and enterprise clients.

What this signals for enterprise customers

For end-user companies, FedEx’s move signals that logistics providers are investing in AI as a way to support more complex shipping demands. As supply chains become more distributed, visibility and predictability become harder to maintain without automation.

AI-driven tracking and returns could also change how businesses measure logistics performance. Companies may focus less on delivery speed and more on how quickly issues are recognised and resolved.

That shift could influence procurement decisions, contract structures, and service-level agreements. Enterprise customers may start asking not just where a shipment is, but how well a provider anticipates problems.

FedEx’s plans reflect a quieter phase of enterprise AI adoption. The focus is less on experimentation and more on integration. These systems are not designed to draw attention but to reduce noise in operations that customers only notice when something goes wrong.

(Photo by Liam Kevan)

See also: PepsiCo is using AI to rethink how factories are designed and updated

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is part of TechEx and is co-located with other leading technology events, click here for more information.

AI News is powered by TechForge Media. Explore other upcoming enterprise technology events and webinars here.

Klarna aims to address the lack of interoperability between conversational AI agents and backend payment systems by backing Google’s Universal Commerce Protocol (UCP), an open standard designed to unify how AI agents discover products and execute transactions.

The partnership, which also sees Klarna supporting Google’s Agent Payments Protocol (AP2), places the Swedish fintech firm among the early payment providers to back a standardised framework for automated shopping.

The interoperability problem with AI agent payments

Current implementations of AI commerce often function as walled gardens. An AI agent on one platform typically requires a custom integration to communicate with a merchant’s inventory system, and yet another to process payments. This integration complexity inflates development costs and limits the reach of automated shopping tools.

Google’s UCP attempts to solve this by providing a standardised interface for the entire shopping lifecycle, from discovery and purchase to post-purchase support. Rather than building unique connectors for every AI platform, merchants and payment providers can interact through a unified standard.

David Sykes, Chief Commercial Officer at Klarna, states that as AI-driven shopping evolves, the underlying infrastructure must rely on openness, trust, and transparency. “Supporting UCP is part of Klarna’s broader work with Google to help define responsible, interoperable standards that support the future of shopping,” he explains.

Standardising the transaction layer

By integrating with UCP, Klarna allows its technology – including flexible payment options and real-time decisioning – to function within these AI agent environments. This removes the need for hardcoded platform-specific payment logic. Open standards provide a framework for the industry to explore how discovery, shopping, and payments work together across AI-powered environments.

The implications extend to how transactions settle. Klarna’s support for AP2 complements the UCP integration, helping advance an ecosystem where trusted payment options work across AI-powered checkout experiences. This combination aims to reduce the friction of users handing off a purchase decision to an automated agent.

“Open standards like UCP are essential to making AI-powered commerce practical at scale,” said Ashish Gupta, VP/GM of Merchant Shopping at Google. “Klarna’s support for UCP reflects the kind of cross-industry collaboration needed to build interoperable commerce experiences that expand choice while maintaining security.”

Adoption of Google’s UCP by Klarna is part of a broader shift

For retail and fintech leaders, the adoption of UCP by players like Klarna suggests a requirement to rethink commerce architecture. The shift implies that future payments may increasingly come through sources where the buyer interface is an AI agent rather than a branded storefront.

Implementing UCP generally does not require a complete re-platforming but does demand rigorous data hygiene. Because agents rely on structured data to manage transactions, the accuracy of product feeds and inventory levels becomes an operational priority.

Furthermore, the model maintains a focus on trust. Klarna’s technology provides upfront terms designed to build trust at checkout. As agent-led commerce develops, maintaining clear decisioning logic and transparency remains a priority for risk management.

The convergence of Klarna’s payment rails with Google’s open protocols offers a practical template for reducing the friction of using AI agents for commerce. The value lies in the efficiency of a standardised integration layer that reduces the technical debt associated with maintaining multiple sales channels. Success will likely depend on the ability to expose business logic and inventory data through these open standards.

See also: How SAP is modernising HMRC’s tax infrastructure with AI

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is part of TechEx and is co-located with other leading technology events including the Cyber Security & Cloud Expo. Click here for more information.

AI News is powered by TechForge Media. Explore other upcoming enterprise technology events and webinars here.