AI ROI: 3 crucial questions CIOs must ask

AI’s rapid growth in 2023 is prompting technology leaders to take a more measured approach to implementation in 2024, focusing on strategic value and responsible deployment rather than rushing to adopt every new AI capability.

The shifting landscape: The meteoric rise of AI technologies, sparked by ChatGPT’s release in late 2022, has transformed from a fear of missing out (FOMO) to a more calculated “look before you leap” mentality.

• IDC projects Global 2000 companies will allocate over 40% of core IT budgets to AI-related activities by 2025
• Worldwide AI spending is expected to surpass $500 billion by 2027
• The focus has shifted from rapid adoption to strategic implementation aligned with business goals

Strategic implementation priorities: Organizations must align AI initiatives with specific business objectives rather than pursuing technology for its own sake.

• AI implementations typically target two key areas: expanding capabilities and eliminating waste
• Cost reduction, while important, should not be the sole consideration for AI adoption
• Leaders must avoid “shiny object syndrome” where new technology becomes a distraction rather than an asset
• Clear vision and strategic alignment are essential for successful AI implementation

Responsible AI framework: Organizations need comprehensive policies and procedures to ensure ethical AI use and protect stakeholder interests.

• Privacy protection for customer data must be prioritized
• Safeguards are needed to prevent proprietary information from being fed into AI models
• Organizations must address potential bias in AI models and outputs
• Clear reporting structures and transparency measures should be established
• Legal departments should be actively involved in policy development
• Upcoming regulations like the EU’s Artificial Intelligence Act should inform policy decisions

Workforce considerations: Employee readiness and buy-in are critical factors for successful AI implementation.

• Organizations must communicate clearly about AI’s role in augmenting human work
• Employees need transparency regarding how AI will impact their roles
• Training and upskilling opportunities should be provided
• Clear procedures for reporting AI-related concerns must be established
• Support for career transitions may be necessary as AI impacts certain roles

Strategic outlook: Success with AI in 2024 will depend more on careful planning and strategic alignment than on the speed of adoption. Organizations that take time to understand where AI can provide maximum ROI while addressing ethical considerations and workforce impacts will be better positioned to realize sustainable benefits from their AI investments.