To evaluate an AI model, first define the business risk. Use precision when a false positive is costly (e.g., approving a faulty part). Use recall when a false negative is costly (e.g., missing a cancer diagnosis). The technical metric must align with the specific cost of being wrong.

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While public benchmarks show general model improvement, they are almost orthogonal to enterprise adoption. Enterprises don't care about general capabilities; they need near-perfect precision on highly specific, internal workflows. This requires extensive fine-tuning and validation, not chasing leaderboard scores.

Use a two-axis framework to determine if a human-in-the-loop is needed. If the AI is highly competent and the task is low-stakes (e.g., internal competitor tracking), full autonomy is fine. For high-stakes tasks (e.g., customer emails), human review is essential, even if the AI is good.

Generic evaluation metrics like "helpfulness" or "conciseness" are vague and untrustworthy. A better approach is to first perform manual error analysis to find recurring problems (e.g., "tour scheduling failures"). Then, build specific, targeted evaluations (evals) that directly measure the frequency of these concrete issues, making metrics meaningful.

While consumer AI tolerates some inaccuracy, enterprise systems like customer service chatbots require near-perfect reliability. Teams get frustrated because out-of-the-box RAG templates don't meet this high bar. Achieving business-acceptable accuracy requires deep, iterative engineering, not just a vanilla implementation.

The main obstacle to deploying enterprise AI isn't just technical; it's achieving organizational alignment on a quantifiable definition of success. Creating a comprehensive evaluation suite is crucial before building, as no single person typically knows all the right answers.

The benchmark for AI performance shouldn't be perfection, but the existing human alternative. In many contexts, like medical reporting or driving, imperfect AI can still be vastly superior to error-prone humans. The choice is often between a flawed AI and an even more flawed human system, or no system at all.

Standardized benchmarks for AI models are largely irrelevant for business applications. Companies need to create their own evaluation systems tailored to their specific industry, workflows, and use cases to accurately assess which new model provides a tangible benefit and ROI.

AI evaluation shouldn't be confined to engineering silos. Subject matter experts (SMEs) and business users hold the critical domain knowledge to assess what's "good." Providing them with GUI-based tools, like an "eval studio," is crucial for continuous improvement and building trustworthy enterprise AI.

Don't rely on a simple agreement percentage to validate an LLM judge. If failures are rare (e.g., 10% of cases), a judge that always predicts "pass" will have 90% agreement but be useless. Instead, measure its performance on positive and negative cases separately (e.g., True Positive Rate and True Negative Rate).

When selecting foundational models, engineering teams often prioritize "taste" and predictable failure patterns over raw performance. A model that fails slightly more often but in a consistent, understandable way is more valuable and easier to build robust systems around than a top-performer with erratic, hard-to-debug errors.