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Token Efficiency Framework — Workflow Economics

Four-tab interactive workflow economics framework for assessing enterprise AI displacement, token efficiency scaling curves, signal thresholds, and capital allocation posture.

Purpose

This artifact converts AI cost/performance improvements into a workflow-level decision instrument for enterprise AI portfolio reviews.

It is designed for CIO, CFO, and board-level discussions where the key question is not “Can AI do this?” but:

When does this workflow cross the economic displacement threshold, and what should we do before it does?

Live Version

https://grikard.github.io/token-efficiency-framework/

Framework Structure

The artifact includes four tabs:

  1. Displacement Equation
    Defines the economic threshold for workflow displacement.

  2. Scaling Curves
    Compares token cost efficiency, GPU AI performance, and Moore’s Law.

  3. Decision Matrix
    Maps representative workflows by signal threshold and position on the token efficiency curve.

  4. Workflow Assessor
    Lets users score any workflow across four dimensions and receive a capital allocation posture.

Core Formula

Displacement Ratio =
(Intelligence Fidelity × Human Baseline Cost)
÷
(AI Execution Cost + Error Rate × Error Cost)

A workflow becomes economically displaceable when:

Displacement Ratio > 1.0

Core Thesis

Compute efficiency alone does not determine AI displacement.

Displacement occurs when intelligence fidelity and human baseline cost exceed AI execution cost plus workflow-specific error penalty.

High-consequence workflows require:

  • fidelity improvement
  • governance
  • proprietary training data
  • error-cost controls
  • human-in-the-loop design

not merely cheaper tokens.

Four Capital Allocation Postures

Posture Typical Horizon Meaning
Automate Now 0–6 months Economics already cross the displacement threshold
Sequence Next 12–24 months Prepare infrastructure before capability catches up
Build & Defend 24–48 months High-value workflows approaching threshold; build data moat
Protect & Invest 36+ months Human judgment remains primary; protect proprietary expertise and data

Workflow Assessor Inputs

The interactive assessor scores workflows on four dimensions:

Input Definition
Signal threshold Cognitive fidelity required for acceptable output
Annual volume Leverage from automation across repeated workflow instances
Error cost Consequence of a wrong output
Training data coverage Availability of proprietary signal and workflow examples

Example Workflow Presets

The assessor includes presets for:

  • Invoice processing
  • Tier 1 support
  • Compliance monitoring
  • Wealth advisory preparation
  • M&A judgment

Intended Use

Use this framework to support:

  • enterprise AI portfolio reviews
  • agentic AI investment sequencing
  • CIO/CFO capital allocation discussions
  • workflow economics analysis
  • AI governance and risk triage
  • ROIC-driven automation planning

Author

Gary Rikard, MBA

LinkedIn: https://www.linkedin.com/in/garyrikard

Repository Topics

Suggested GitHub topics:

enterprise-ai
agentic-ai
workflow-economics
token-efficiency
ai-displacement
ai-governance
capital-allocation
roic
automation-economics

Notes

The scaling curve panel uses Chart.js loaded from a public CDN. The chart requires internet access to render.

The model is an executive decision framework, not a deterministic forecast. Workflow-specific assumptions should be validated with operational telemetry, error-rate testing, and governance review before production deployment.

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Four-tab workflow economics framework for assessing AI displacement, token efficiency curves, signal thresholds, and capital allocation posture.

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