There is now a general consensus that generative AI will transform business in profound ways, and companies and individuals that do not embrace it will quickly be left in the dustbin of history.
At the same time, as companies delve deeper into this technology, they want proof, real business metrics, that show how AI is actually improving business performance and revenue.
They cannot and should not rely solely on vendor promises. Yet, it is not easy to establish a direct correlation between a tool like Microsoft Copilot and overall business performance.
So should CIOs just believe this news? In this week’s article Clouded Judgment NewsletterMost companies may not have a choice, investor Jamin Ball says. They may not see results for a while, forcing them to make a very difficult buying decision, he says.
Here’s Ball’s take:
“The world is changing right now. AI is a massive platform shift. And if you don’t embrace it or invest in it, you risk losing market share and becoming obsolete. As your competitors invest in AI, you need to invest in AI too. Ultimately, those investments may not immediately translate into better business outcomes (i.e. more revenue), but they will certainly lead to better end-user experiences. And they may very well lead to better “other” metrics like retention or churn. If your competitors are creating better end-user experiences and you’re not, you’re likely to find yourself in trouble in the short to medium term,” Ball wrote.
But CIOs want more certainty before they blindly jump into expensive new technology, no matter how revolutionary it may be. They, like the company’s CFO, must face the reality of the moment when it comes to justifying the expense. If they spend a lot of money, when can they reasonably expect to see a return on their investment?
At the same time, those who use the electricity analogy for AI may believe that it is AI. moment of electricity —that moment in the late 18th century when factories started switching from steam to electricity. You could ignore it and keep using steam, but at some point you were going to get crushed (pun intended).
The answer might come from a savvy startup, or more likely, larger companies will turn to the usual suspects – Deloitte, McKinsey and Accenture – and pay them hefty fees to help find the solution. Ironically, this will only increase the cost and time to value.
As Jerry Garcia of the Grateful Dead once sang in “Wheel“You can’t go back and you can’t stand still. If lightning doesn’t strike you, lightning will.” CIOs trying to figure out how to proceed must decide whether they want to move their business into the future or waste money.
