The Top CIO Challenges, According to 12k+ of Your CIO Peers

Seventy-four percent of CEOs say that AI is the technology that will most impact their industry (up from 20% in 2022 and 54% in 2023). The high expectations means CIOs are under pressure to demonstrate value from AI investments. However, the ROI for AI is often nonexistent or difficult to showcase. Further, AI expenses are often volatile and unpredictable, and due to the new expense structure, CIOs cannot rely on previous experience of tools. 

Regardless, CIOs will need to find a way to manage executive and board expectations around the investments and ensure leadership understands they won’t see quantifiable returns in the expected short time frame. They’ll need a new way to think about the type of value AI can add to the organization, which may look different from what executives expect today. To justify the investments and manage expectations, create business cases for ROI (investment), ROE (employee) and ROF (future). 

On the tech side, CIOs need a tech stack that can accept a variety of AI and data inputs and a coherent AI platform. 

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Eighty-nine percent of CEO and senior business executives say effective data, analytics and AI governance is essential for enabling business and technology innovation. However, only 46% report having strategic value-oriented KPIs associated with governance policy and procedures.

Further, without AI-ready data foundations and practices, CIOs will be unable to deliver value from AI investments. In fact, most CIOs struggle to create trusted data foundations (i.e. data governance, data literacy, greater data collaboration) to enable AI-driven business outcomes. 

CIOs who want to show the value of new investments in AI-ready data and governance should prioritize the AI use cases that demonstrate the necessity of those investments. 

Data and analytics is a team sport and CIOs must collaborate to upskill the organization around AI and overcome the business resistance to data governance. 

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Sixty-nine percent of CIOs say their top focus area during personal working time in the next 12 months is managing cybersecurity and technology risks. In order to better enable business-led IT, CIOs must partner with the chief information security officers (CISOs) to evolve the cybersecurity operating model. 

In practice, CIOs must work with CISOs to:

• Align the cybersecurity strategy and program to business objectives and risk appetite

• Identify new technology that can enhance business outcomes and support enterprise digital transformation

• Align with senior stakeholders on acceptable risk within the organization and partner to define a plan to manage the risk.

CIOs are under pressure to purchase and implement new and increasingly expensive technology with limited budgets. Software vendors are raising prices by as much as 30% annually as they embed AI into SaaS and other solutions. Additionally, cost overruns with GenAI budgets could consume 35% of the entire annual budget with cost estimates for the technology off between 500% and 1000%. 

With executives and organizations increasingly focused on implementing and creating value from AI, CIOs need to beware of rapidly escalating costs and uncoordinated spend decisions happening inside and outside of IT. 

To effectively maintain control, CIOs will need to build a business case for AI technology, despite unclear outcomes and limited short-term ROI. They’ll need to lead execution for AI even though direct control of spend will be limited and manage volatile cost drivers.