Today, there is broad consensus that generative AI will fundamentally transform business, and companies and individuals who do not get on board will soon be relegated to the dustbin of history.
At the same time, as enterprises dive deeper into this technology, they want evidence and real business metrics that show how AI is actually improving business performance and revenue.
They can't and shouldn't just trust the vendor's promises, but it's not easy to make a direct correlation between something like Microsoft Copilot and overall business performance.
Should CIOs just take it on faith? In this week’s Clouded Judgement newsletter, investor Jamin Ball suggests that most companies may have no choice. In his view, they may not see results for some time, and they will have a very difficult buying decision to make.
Here's what the ball had to say:
“The world is evolving right now. AI is a massive platform shift. And if you don’t adopt or invest in it, you risk losing market share and slowly becoming irrelevant. Your competitors are investing in AI efforts, so you should be investing in them. Ultimately, these investments may not immediately lead to better business outcomes (e.g., more revenue), but they will certainly lead to better end-user experiences. And they may even lead to better “other” metrics, like retention or churn. If your competitors are building better end-user experiences and you’re not, you’re going to be in trouble in the short/medium term,” Ball wrote.
But CIOs want more certainty before they blindly jump into expensive new technologies, no matter how game-changing they may be. They and their corporate CFOs need to deal with the realities of today when it comes to justifying the costs: When will they expect to see a return on their investment if they spend big money?
At the same time, those who use the electricity metaphor for AI might believe that this is AI’s electric moment, the moment when factories began to switch from steam to electricity in the late 18th century. You could ignore this and continue to use steam, but at some point it would be overwhelmed (pun intended).
Perhaps the answer lies in a clever startup, or more likely, a certain size of enterprise will turn to the usual suspects like Deloitte, McKinsey, and Accenture, paying them huge fees to help solve their problems. Ironically, that only increases costs and time to value.
As Jerry Garcia of the Grateful Dead sang in “The Wheel,” “You can't go back and you can't stand still / If the thunder doesn't catch you, the lightning's gonna catch you.” CIOs trying to figure out how to proceed must decide whether to lead their companies steadily into the future or to throw good money at bad things.
