Search of the Gartner, Inc.., with 451 senior technology leaders conducted in the second quarter of 2024, reveals that 57% of CIOs (Chief Executive Officers) claim to have the task of leading a Artificial Intelligence strategy (AI) in their organizations. However, four emerging challenges are making it difficult for them to deliver business value with AI.
“Due to the relentless innovation in the race between technology vendors, CIOs feel like they are always living in the hype, while the reality of their AI race to the bottom line – and how hard it is to get value – makes it seem like they’re in a valley, too,” he says. Mary Mesaglio, Vice President and Analyst at Gartner.
“However, CIOs can set the pace in their race for AI results,” says Hung LeHong, Vice President and Analyst at Gartner. “If you have modest ambitions for AI, in an industry that is not yet being reshaped by AI, you can afford to move at a more measured pace. This is a steady pace of AI. For those companies with bigger ambitions for AI, or in an industry that is being reinvented by AI, the pace will be faster. This is an accelerated pace of AI. Whether you are moving at a steady pace or an accelerated pace of AI, you need to deliver value and outcomes.”
Gartner analysts explain how to overcome four emerging challenges to deliver value with AI securely and at scale.
The business benefits of using AI don’t always materialize: To generate value for businesses with Generative Artificial Intelligence (GenAI), people need to consistently use GenAI tools in their workflows. In a Q2 2024 Gartner survey of more than 5,000 digital workers in the United States, United Kingdom, India, Australia, and China, employees reported saving an average of 3.6 hours per week using GenAI. However, not everyone gets the same level of benefit from using it.
“Herein lies the real challenge of AI productivity,” LeHong points out. “Productivity gains from GenAI are not equally distributed. The gains vary by employee, not only because of their personal interest and adoption levels, but also by job complexity and experience level.”
AI-accelerated companies are also looking for benefits that go beyond productivity – improvements at the operations and process level, such as automating key business processes or redefining roles to work with chatbots; and transformative improvements at the enterprise level, such as outcomes that create new revenue streams or reshape the company's value proposition.
“In these cases, CIOs should manage AI benefits as a portfolio. Determine the size of their bet in each benefit area and manage risks and rewards across that portfolio,” Mesaglio says.
The cost of AI can quickly spiral out of control: More than 90% of CIOs said managing costs limits their ability to realize value from AI for their enterprises, according to a Gartner survey of more than 300 CIOs conducted in June and July 2024. Gartner believes cost is as big a risk for AI as security or hallucinations. If CIOs don’t understand how GenAI costs scale, Gartner estimates they could make a 500% to 1,000% error in their cost calculations.
“As a CIO, you need to understand your AI bill,” LeHong says. “You need to understand the cost components and pricing model options, and you need to know how to reduce those costs and negotiate with vendors. CIOs need to create proofs of concept that test how costs will scale, not just how the technology works.”
Data and AI everywhere creates new challenges and risks: As AI and data proliferate across the enterprise, they are no longer centralized assets that IT directly controls. Gartner research has revealed that on average, only 35% of AI capabilities will be developed by IT teams. This means new approaches are needed to manage and secure data access, govern AI inputs and outputs, and securely deliver value.
“This is where the concept of a ‘technology sandwich’ comes in,” LeHong says when describing the AI technology stack of the future. “At the bottom of the sandwich is all the data and AI from IT, typically centralized. At the top is all the data and AI coming from everywhere, typically decentralized. And in the middle are the trust, risk, and security management (TRiSM) technologies that make it all secure. That’s what you need to build to accommodate AI and data coming from everywhere.”
Gartner: AI Technology Sandwich
Source: Gartner (October 2024)
“As a CIO, your job is to design a technology sandwich that can handle the complexity of AI, but still allow you to seize new opportunities,” Mesaglio says. “Companies with a steady AI momentum (with ten or fewer AI initiatives) will govern their technology sandwiches using human teams and committees. AI-accelerated companies will add TRiSM technologies—a suite of technologies designed to build trust, monitor risk, and manage security for safe AI at scale.”
AI use can positively and negatively impact employee performance and well-being: Some employees may have a strong affinity for AI, while others may feel threatened or resentful. These intense reactions to AI can lead to unintended behavioral outcomes that negatively impact job performance, such as jealousy of those using AI and over-reliance on AI tools. However, few companies are actively managing these behavioral results. In Gartner’s June/July survey, only 2013 CIOs said they are focused on mitigating the potential negative impacts of Generative AI on employee well-being.
“Most companies aren’t curious enough about how AI makes their employees feel. This is important because AI can lead to a variety of unintended behavioral outcomes,” Mesaglio says. “The critical point is that if you’re going to use change management to address this, be intentional about who is responsible for what behavioral outcomes. Companies need to manage behavioral outcomes with the same rigor as they manage technology and business outcomes.”
Gartner clients can read more at: “Pacing Yourself in the AI Races: 2024 IT Symposium/Xpo Keynote Insights” and “AI Technology Sandwich: A Conceptual Framework for Executing AI”.
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