Gartner identifies four emerging challenges to delivering value with AI securely and at scale.
A Gartner survey of 451 senior technology leaders conducted in the second quarter of 2024 reveals that 57% of CIOs say they are tasked with leading an AI strategy in their companies. However, four emerging challenges are making it difficult for them to deliver business value with AI.
“Due to the relentless innovation in the race among technology vendors, CIOs feel they are always living up to the hype, while the reality of the race for their AI results – and how hard it is to get value – makes it seem like they are in a valley too,” said Mary Mesaglio, Vice President and Analyst, Gartner.
“However, CIOs can set the pace in their race for results with AI,” says Hung LeHong, Vice President and Analyst, Gartner.
“If you have modest ambitions for AI, in an industry that isn’t yet being reshaped by AI, you can afford to go at a more measured pace. This is a steady pace of AI. For those companies with greater ambitions in AI, or in an industry that is being reinvented by AI, the pace will be faster. This is a fast pace of AI. Whether you’re moving at a steady or accelerated AI pace, you need to deliver value and results.”
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 drive business value with Gen AI, 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 that they saved, on average, 3.6 hours per week by using GenAI.
However, not all of them get the same level of benefit from using it.
“Here’s the real challenge of productivity with AI,” LeHong said.
“Productivity gains with GenAI are not distributed equally. Earnings vary by employee, not only because of their personal interest and adoption levels, but also because of the complexity of the job and level of experience.”
AI-accelerated companies are also seeking benefits that go beyond productivity – improvements at the level of operations and processes, such as automating key business processes or redefining roles to work withchatbots; and transformative improvements at the enterprise level, such as outcomes that create new revenue streams or redesign the company’s value proposition.
“In these cases, CIOs must manage the benefits of AI as a portfolio. Determine the size of your bet in each benefit area and manage risks and rewards across that portfolio,” said Mesaglio.
The cost of AI can quickly spiral out of control:
More than 90% of CIOs said managing costs limits their ability to derive value from AI for their companies, according to a Gartner survey of more than 300 CIOs in June and July 2024. Gartner believes that cost is as big a risk to AI as safety or hallucinations. If CIOs don’t understand how GenAI’s 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 account,” says LeHong. “You have to understand the cost components and pricing model options, and you need to know how to reduce those costs and negotiate with suppliers. CIOs must create proofs of concept that test how costs will scale, not just how the technology works.”
Data and AI everywhere create new challenges and risks: With the proliferation of AI and data across the enterprise, it’s no longer centralized assets that IT directly controls. Gartner research revealed that, on average, only 35% of AI capabilities will be developed by IT teams. This means that new approaches are needed to manage and secure data access, govern AI inputs and outputs, and deliver value securely.
“This is where the concept of the ‘tech sandwich’ comes in,” LeHong said when describing the AI tech stack of the future. “At the base of the sandwich are all the IT data and AI, typically centralized. At the top are all the data and AI coming from everywhere, typically decentralized. And in between are trust, risk and security management (TRiSM) technologies that make it all secure. That’s what you need to build to accommodate AI and data that comes from everywhere.”
“As a CIO, your job is to design a tech sandwich that can handle the complexity of AI but still allow you to take advantage of new opportunities,” Mesaglio said.
“Companies with a steady pace of AI (with ten AI initiatives or less) will govern their tech sandwiches using human teams and committees. AI-accelerated companies will add TRiSM technologies – a set of technologies designed to build trust, monitor risk, and manage security for secure AI at scale.”
Use of AI 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 who use AI and over-reliance on AI tools. However, few companies are actively managing these behavioral outcomes.
In the June/July Gartner survey, only 20% of CIOs said they focus on mitigating the potential negative impacts of Gen 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 said.
“The critical point is that if you use change management to deal with this, be intentional about who is responsible for which behavioral outcomes. Companies must manage behavioral outcomes with the same rigor as technological and business outcomes.”
