Dive Brief:
- Despite ambitious plans for scaled deployments, IT leaders and decision-makers have not seen break-even returns on their AI investments, according to a CDW Group report published earlier this month. Almost every organization surveyed had at least one AI project in the pipeline.
- Nearly two-thirds of the more than 900 leaders surveyed by the IT services company estimated ROI rates on AI investments of 50% or less. Break-even rates were far more elusive, with less than 2% of respondents seeing 100% returns.
- In addition to the ROI challenges, scalability has also proven tricky for businesses. Just over one-third of business leaders say their organization reached full deployment on their highest-priority AI projects.
Dive Insight:
Amid ongoing economic concerns, CIOs are looking closely at how AI can cut costs and fuel revenue. But on the way to AI's promised advantages, businesses continue to grapple with unfit data structures, looming skills gaps and cost challenges.
Leaders also struggle to identify what they should buy instead of building, as executives evaluate a sprawling market of AI offerings.
“I'd say 9 out of 10 organizations that we talk to struggle with where to start, what solutions to use and how to govern and really have a lifecycle management approach to AI,” said Ken Drazin, director of digital experience at CDW, in the report.
Despite the challenges, executives remain optimistic about long-term outcomes. Most businesses that did not reach full ROI on their AI projects expect to see cost savings in three years, according to an IBM-commissioned report published in December. Nearly half expect cost savings as soon as 2027.
CIOs fueling AI adoption for their businesses are eager to deliver results, as automation assumes specific tasks and augments employee productivity. Some have already flagged specific positive outcomes.
General Mills attributed more than $20 million in cost-savings to supply chain optimization tools that use AI, executives said during an investor conference earlier this year. Financial services company Charles Schwab also credited AI with helping drive down per-client account costs by more than 25% in the last decade.
