What is Fragmentation Tax?

The fragmentation tax is the cumulative cost you incur while managing multiple tools, vendors and platforms in your AI stack. 

Imagine this, you are preparing for dinner and scout for the best ingredients in the market. You visit the farmers’ market for veggies, local grocer for cheese, a different seller for flour – you may end up getting the best ingredients, but you spend time moving from store to store, using loyalty cards for discounts and scouting for the best price. 

Overall, you ended up spending more time and effort – logistics, co-ordination, comparison etc. That is the cost of fragmentation. 

The Real Costs of Your AI Stack

Integration

Every new tool needs to be integrated into the system. And integration is a time consuming process. It requires planning and engineering effort from the team, especially in debugging, verifying and integrating outputs, which adds additional overheads. 

Vendor Management

Every tool you buy comes with its own license and renewal cycle. Different tools means different contracts and billing cycles to track (a cumbersome process). This makes budget forecasting and procurement more complicated than it needs to be. 

Maintenance Issues

When you have multiple tools and software in your system, you need to ensure they are constantly up-to-date. You need to manage the API versioning schedules, manage documentation updates of each tool, and of course, feature updates and security patches for each software. All these activities translate to chaos and take time away from your core business. 

Debugging

Debugging across multiple tools and platforms becomes a challenge especially when you are working with AI. As a result, it slows you down everyday processes and takes away time from your core work – detection, analysis and resolution becomes a cumbersome process. 

Challenges Compound When Not Addressed

Having multiple tools in your system is sometimes necessary. However, complexity is not. While picking tools and solutions, teams need to assess if there is scope to consolidate and optimize costs. A lot of times one platform may complete a task at 90% quality – which is still easier to manage and more efficient than procuring three different tools (more expensive, harder to manage, higher overheads). 

The total cost of ownership (TCO) must be considered while deciding which tools to purchase – this could include factoring in integration time, time and costs to setup, maintenance overhead, team training and operational complexity. 

Why Consolidation is Crucial

A fragmented stack comes with a real cost – the cost of integration and management overheads. It slows down your team and turns out to be more expensive in the longer term. When you invest in a consolidated platform, you are buying back time for your team. 

Oftentimes, specialist vendors offer only marginal improvements in performance. But these improvements require a lot of development effort and time – and it is well known that developer productivity is the most valuable resource in a lot of companies. A unified platform provides you a good overall performance and minimizes unnecessary costs. 

Calculate the Real Cost to Your Business

The next time you are looking to purchase an AI tool, consider the following: 

• What is the actual cost of the tool?
• How long will integrations take?
• Does it fit well in your existing tech stack?
• Will it require significant development efforts to get it up and running, or to maintain?
• What is your total vendor count? Can you do without an additional tool right now?

The cost of fragmentation is real and expensive. Often, these costs do not show up explicitly, but are hidden in development hours. As a result, you are slowing down your business. Sometimes, the best tool is the one that fits seamlessly in your workflows and improves your efficiency.

What a Unified Approach Looks Like 

The answer to fragmentation is a purpose-built architecture that covers the full-lifecycle of AI deployment – connecting to your data, governing how AI is being used, and using it in the right workflows in your organization. 

When these components are brought together by different vendors, accountability becomes an issue. When you get a bad output, you are unable to track where the issue lies, and hence, resolve it immediately. A unified platform solves this issue and makes the process transparent, efficient and cohesive.

How AI Squared Put This Into Practice

UNIFI by AI Squared is designed to be the unified platform you need. It comes with pre-built connectors to enterprise systems, enterprise-grade RAG, a no-code workflow builder for multi-step pipelines, and compliance guardrails built-in. 

With AI Squared, you get to build, manage and monitor AI in your existing workflows without affecting productivity. To learn more, speak with us today.