Despite the enthusiastic claims from vendors, enterprise buyers appear to approach generative AI with caution, typical of their careful approach to newer technologies. Throughout the year, as vendors introduced new generative AI products, Chief Information Officers (CIOs) took note. While some companies are looking to cut back on spending or maintain current levels, there is an exception when technology enables more efficient operations and greater output with fewer resources.
Generative AI holds the potential for such advancements, but it comes with its own set of costs. This includes higher expenses for features in Software as a Service (SaaS) products or fees associated with utilizing large language model APIs for internal software development. Regardless of the approach, it is crucial for those implementing the technology to assess the return on investment.
A July survey by Morgan Stanley revealed that many large company CIOs were proceeding cautiously with generative AI. While 56% acknowledged its impact on investment priorities, only 4% had launched significant projects, with most still in the evaluation or proof of concept phase. This aligns with insights gained from conversations with CIOs.
However, CIOs are under pressure to deliver experiences comparable to those seen in consumer-oriented technologies, such as ChatGPT. The internal customers of CIOs or Chief Technology Officers (CTOs) have experienced the capabilities of generative AI and expect similar excellence. This creates a tension between meeting internal expectations, potentially driven by CEOs, and the CIO’s inclination to move cautiously, even with transformative technologies like generative AI.
To address this, setting up structured and organized approaches to implementation over time is essential. Jim Rowan from Deloitte emphasizes the importance of infrastructure, not just in terms of technology but also in defining roles, processes, governance, and providing the necessary capabilities for successful implementation.
CIOs share similar strategies for incorporating generative AI into their organizations. For instance, Monica Caldas from Liberty Mutual initiated a proof of concept involving a few thousand employees and aims to expand its application across the entire company. Other CIOs, like Mike Haney from Battelle and Kathy Kay from Principal Financial Group, are exploring specific use cases within their organizations, emphasizing the need for careful experimentation and learning during these early stages of transformative technology adoption.
