AI is causing headaches in the boardroom as CFOs and CIOs struggle for clarity on ROI

Boardroom meeting with executives discussing business issues, including CTO, CISO, CIO, and CEO.
(Image credit: Getty Images)

Senior business and IT executives must improve alignment in the boardroom to ensure return on investment (ROI) from AI technologies, experts have told ITPro.

CIOs and CFOs in particular face a range of barriers when it comes to AI adoption projects, according to Rodolphe Malaguti, head of product strategy at Conga, largely due to lingering concerns over ROI and whether there are tangible business use-cases.

Malaguti's comments come in response to new research highlighting that CFOs find AI investment confusing, with a significant portion of finance execs on the verge of slashing funding for projects if ROI doesn't materialize soon.

Similarly, a recent survey of CIOs revealed many find it difficult to agree on what metrics they should be measuring to assess value.

Over three-quarters (78%) of CFOs have expressed a desire to increase AI investment over the next 12 to 18 months, research from Basware shows, though most also admit that they “don’t know where to start.”

Meanwhile, half (50%) of CFOs said they will axe AI investment if it fails to return measurable ROI within a year, leaving precious little time for the technology to prove itself.

What measurable AI looks like is also in contention though, according to a report from software company Gong.

While 61% of CIOs believe only increased revenue justifies AI investment, 60% think that time savings alone justify the costs. Only 32% actively measure both, the report said, pointing to a disconnect on ROI.

Unlike the surveyed CFOs, less than 20% said a lack of provable ROI would be a reason to abandon AI initiatives, though smaller firms with between 200 and 500 members of staff were more willing to do so (40%).

This highlights a confluence of issues for decision makers across both the business and technology aspects of the business - and it comes amid a critical period in the maturation of AI.

ROI from AI has plummeted over the last three years, according to research from Appen. Whereas 56.7% of deployed AI projects showed meaningful ROI in 2021, just 47.3% showed ROI in 2024.

This hasn’t deterred some CIOs, though. A study from software firm Ardoq revealed that 60% of IT execs believe ‘fear of missing out’ (FOMO) is a major driver of investment in spite of rocky returns.

How can execs improve alignment on AI?

Closer collaboration and engagement between departments when it comes to AI adoption will be crucial to ensuring success, Malaguti told ITPro.

“As companies review their budgets ahead of next year, IT teams need to be honest and be able to justify their chosen AI solutions or technologies and outline real proof points,” he said.

“CIOs need to think carefully about why they have chosen a particular AI tool and what they are trying to achieve with it. That needs to be the focus of these conversations, rather than implementing a new technology as if it is going to solve all their problems,” he added.

Ensuring that AI has its own, separate representation at the board level should also be a key focus, said Sarah Pearce, partner at law firm Hunton Andrews Kurth.

RELATED WHITEPAPER

“Senior, centralized management helps foster a good governance culture and raise awareness throughout the organization from the top down,” Pearce told ITPro.

“Having an appointed leader in the C-suite, who is focused on AI, is a good way of ensuring adequate resources are appropriately allocated in a way that allows for meaningful accountability," she added.

George Fitzmaurice
Staff Writer

George Fitzmaurice is a staff writer at ITPro, ChannelPro, and CloudPro, with a particular interest in AI regulation, data legislation, and market development. After graduating from the University of Oxford with a degree in English Language and Literature, he undertook an internship at the New Statesman before starting at ITPro. Outside of the office, George is both an aspiring musician and an avid reader.