Dive Brief:
- Most companies are struggling to find and define ROI even as usage scales across their organizations, an SAP study released Wednesday found. SAP worked with Oxford Economics to survey 2,600 director and C-suite level executives at midmarket and enterprise companies across 13 countries to find insights.
- Although satisfaction with AI ROI is up a few percentage points from last year, reaching 69%, nearly just as many respondents said they’re not convinced that the technology they’re deploying is delivering its full potential, the survey found.
- It’s a tough spot for companies, Sean Kask, chief AI strategy officer at SAP, told CIO Dive, as ROI is a hard metric to measure. Companies may assess a project’s feasibility versus its ROI matrix. “Look at the use cases that you have, the value that you think you can derive with them and measure that against the effort to implement it,” Kask said.
Dive Insight:
Enterprise confidence in AI is growing as experience with the technology matures, but different members within an organization still struggle to define success, or measure the business value of it.
Although SAP found that satisfaction with AI’s value was climbing, the ERP vendor also found that cost was not one of the top benefits organizations were finding. Respondents reported that AI use wasn’t driving cost efficiency or productivity as much as it helped employees create insights, make decisions or interact with customers.
“It’s not the No. 1 benefit driver of AI, but it’s certainly part of it,” Kask said.
AI use is slightly up compared with last year, with an average of 30% of all tasks being completed with AI assistance, compared with one-quarter last year. That statistic is expected to rise to 48% in the next two years, the survey found. Only 18% of companies said they are using end-to-end, cross-functional AI deployments compared to single-use tasks.
SAP and Oxford Economics found that the average U.S. company spent $37.2 million on AI this year, and they expect to increase spending by 46% in the next two years. Of that spending, American companies reported $9.9 million in ROI this year, and expect to achieve $26.5 million in the next two years.
In the next few years, maturing companies’ leaders will focus more on scaling and finding AI’s role in the business, a KPMG survey from earlier this month found. But data, skills and governance will continue to be the biggest challenges to finding ROI, Kask said.
“As [companies] start to roll out and gain experience, especially with agents, they discover a lot of shadow agents, or shadow IT agents that can access data that they shouldn’t be or taking actions in the system on behalf of users that maybe aren’t auditable,” Kask said.
Deployment can highlight the weak spots that companies will need to zero in on, or showcase where they should continually review best practices. The study found that AI is fundamentally reshaping the organizations that are doubling down on the technology. Kask said the businesses that will find success are those that have board-level AI literacy and the willingness to revamp their systems.
“It’s about the allocation of scarce resources, and not just throwing everything at AI, but doing it in a way that maximizes that kind of ROI,” Kask said. “I think that’s done at board level, frankly, by picking out where you can really change a process in a strategic way, and then measure the outcome.”
