Businesses racing to drive growth with generative AI (GenAI) face myriad challenges, with the road to success clearly linked to organizations where CIOs are trusted to lead.
At organizations that enable CIOs to take full ownership of digital business initiatives, the chances for success increase by as much as 79% compared with organizations in which their responsibilities are limited.
Those are among the findings of an Ernst & Young LLP survey of 500 chief information officers (CIOs) at US companies with an average annual revenue of $17.4 billion.
Its findings suggest that CIOs are unsure about GenAI, even though many are in the midst of deployment, and expecting significant investment in the technology.
The study found that half of CIOs say they haven’t yet fully embraced the hype surrounding GenAI, even though all are committing budget to it.
“Over the years, there have been many examples of ‘cutting-edge’ technologies that did not live up to the initial hype,” said Matt Bartell, Americas Deal Technology Leader at EY-Parthenon. “As the technology experts at a company, CIOs are uniquely positioned not only to understand and enable the potential for growth that may be unleashed by GenAI but also to make sure the organization’s expectations are aligned to tangible goals.”
More than eight in ten CIOs expect the GenAI component of their budgets to increase over the next 12 months, and 12% expect an increase of more than 50%. The largest increases are at companies where the chief executive officer and CIO jointly lead the artificial intelligence (AI) strategy.
Revenue generator
Despite their skepticism about the GenAI hype, CIOs still see the technology as a revenue generator or as a means to transform their business models (64%) while just 19% see the main value in cutting costs.
While nearly half believe GenAI will substantially enhance organizational value, most are moving cautiously to put the technology into production.
Nearly half (47%) have a GenAI solution in either the pilot or proof-concept stage, though only a quarter have a solution in production.
“The CIO and their organizations play a critical role in driving value from GenAI. In order to gain credibility and drive momentum with their business counterparts, CIOs may need to focus on GenAI use cases that can more immediately scale and drive value rather than trying to examine a wider array of options,” says Mazen Baroudi, EY Americas Technology Strategy Leader.
One step companies are taking to speed up adoption is to look outside for GenAI expertise.
Overwhelmingly, CIOs (86%) say that their organizations plan to acquire or partner with GenAI-based software platforms or businesses. In contrast, only 11% of CIOs are hiring people with GenAI skills.
This makes it more essential for CIOs to expand their role in the transaction process, especially when one considers that only 32% say that deals significantly meet their technology objectives.
While three-quarters of CIOs are involved in portfolio strategy and due diligence, just 37% are engaged in the critical post-close phase of a transaction, when technology is integral and transformation occurs.
By extending their role into the implementation phase, IT leaders can improve the likelihood of a positive outcome that supports the company’s strategic goals, not only for GenAI-focused deals but for all acquisitions.
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The views expressed by the author are not necessarily those of Ernst & Young LLP or other members of the global EY organization.