Gaining value from artificial intelligence (AI) was the key topic in the opening keynote of the Gartner symposium, with Gabriela Vogel, vice-president analyst at Gartner, telling 6,000 delegates at the Barcelona conference: “We are at a crossroads, CIOs have either made a mistake or they are on a path to greatness.”
Vogel stated that value in the private sector means growth, adding: “Chief financial officers [CFOs] say 74% of you are achieving productivity gains, but only 11% see real return on investment [ROI]. AI readiness is the key that unlocks the next level.”
Along with a focus on delivering business growth, Gartner sees an opportunity for CIOs to get out of back office IT. Almost two-thirds of CIOs (65%) are not happy with being constrained to the four walls of the IT department. According to analyst firm Gartner, CIOs want to be customer-facing, where they are involved in the same conversations that people in the business have with their customers and customer prospects.
“In particular, they need to be much more involved in client-facing solutions, in client-facing conversations and in client-facing strategies, rather than the back office or core IT operations, which are internally facing,” said Daniel Sanchez-Reina, vice-president analyst at Gartner, adding that business chiefs want to hear about the financial impact and scaling of AI to materialise the financial impact. “CEOs and CFO are tired of listening to CIOs say they are piloting AI projects and say they will be able to improve productivity.”
Beyond prioritising the financial return on AI-powered initiatives, Gartner is urging IT leaders to prioritise and reprioritise their IT spending “in flight”. Sanchez Reina said this means they should no longer plan spending-based quarterly budget reviews, strategy reviews or annual spend. Instead, he recommended they adapt a more flexible approach to IT budget planning, which means CIOs will have to think ahead to consider how the IT planning decisions they make could impact the business in the future. For insurance, he said CIOs will need to consider how their decisions could affect the profit, loss and operating costs of the business.
Among the difficult conversations CIOs are likely to have with senior management is when being sold product bundles where there is no immediate value. For instance, an IT leader may decide to purchase reserved instances of graphics processors (GPUs) for 12 months to support AI projects, but business priorities then change.
Reina Sanchez said: “If you have acquired GPUs, it’s just a matter of saying, okay, let’s terminate these AI projects because they don’t make sense in the new context. CIOs need to have to open a conversation with the C-suite and discuss which AI projects will not give the ROI or the objectives that were planned.”
He also urged CIOs to get assurances from business chiefs that the decision to terminate these projects has their full backing.
While the conversation should move beyond efficiency, such gains in efficiency can be directly correlated financial costs. For instance, Sanchez Reina said AI could be used to “supercharge the internal IT team”, adding: “Maybe AI can enable them to reduce their outsource bill.” Beyond IT, where business processes are outsourced, this supercharged AI could reduce that bill too.
As Sanchez Reina noted, if a CIO can say AI is able to reduce the outsourcing bill by 5% to 30%, there is a direct business impact.
