C-suites don’t really understand what generative AI is — and CIOs need to step in before they botch adoption projects

Don Schuerman on stage at PegaWolrd
(Image credit: Future)

Despite talking a good game about the technology, business leaders still don’t really understand what generative AI is, according to research published from Pegasystems.

The study found that leaders tended to overestimate their knowledge of AI, with 93% of respondents claiming to have a good understanding of the technology and how it works. 

But in spite of this claimed understanding, 80% of leaders thought that AI has been in general business use for less than five years, with only 7% correctly answering that AI has been in mainstream use for over 10 years already.

Shockingly, even though just under two thirds  (65%) of the respondents were unable to pick an accurate description of generative AI, only 3% of respondents admitted they did not have a grasp of the technology, 

Pegasystems said this goes some way to explaining why the study found 61% of decision makers said they had failed an AI implementation project at their organization.

This does not appear to have dampened interest in the technology, however, and 85% of these executives said they spend up to half their annual IT budget on AI solutions of some sort.

There is some awareness that this is not a viable combination, however, and Pega found 77% of respondents were willing to admit to at least some level of wastage in their budget stemming from the lack of a fleshed out AI strategy.

CIOs need to take a lead on being clear on how AI can help their organization

Pegasystems’ findings suggest there needs to be a serious rethink around how and why these investments are made, indicating decision-makers are very prone to falling for some of the hype generated around AI in recent years.

Speaking ahead of the official opening of PegaWorld iNSpire, Don Schuermann, CTO at Pegasystems, said the mystification of AI in the media in the wake of the generative AI explosion has caused a large amount of confusion.

“The way AI is talked about in the media is it consistently gets talked about as this very amorphous thing. Self-driving car? That’s AI; RPA? that’s AI too. As opposed to understanding: no it’s actually a collection of discrete technologies and approaches,” he explained

“Even something like self-driving cars, it’s not an AI, it’s hundreds of AIs working together to do different things, and I think executives trying to implement this in their enterprise need to drop to this next level of understanding.”


Schuerman argued that CIOs have a critical role to play in transforming attitudes around AI among fellow executives.

CIOs should have the technical wherewithal to actually see where AI can provide real value, Schuerman stated, and said this represents a “huge opportunity” for them to be precise with the particular form of AI they want to use for specific business functions.

“I think there is a huge opportunity for CIOs to step in a little bit as an educator to the enterprise and the rest of the C-suite. I do think there’s this huge impact of AI, but we have to make sure that across the C-suite people are educated in what it really means and how to then translate it into the use cases,” he argued.

“I think that’s a really important role. You see that lack of understanding, you see the lack of AI skills, but also you see the ambitions to really use this to drive pretty transformative [change].”

Solomon Klappholz
Staff Writer

Solomon Klappholz is a Staff Writer at ITPro. He has experience writing about the technologies that facilitate industrial manufacturing which led to him developing a particular interest in IT regulation, industrial infrastructure applications, and machine learning.