Good morning. As CFOs determine the business case for generative AI to help drive change and create value, boards and investors are looking to finance chiefs to help measure the potential return on investment (ROI) for various AI strategies.
During a recent Fortune Brainstorm AI virtual discussion held in partnership with Accenture, experts weighed in on ways to make AI investments pay off. “I think by all the measures, we have traversed a large part of the AI hype cycle, and there’s a lot of discussion around ’Show me the money,’” Muqsit Ashraf, group chief executive of strategy at Accenture said. And that's evident in some earnings calls over the past couple of quarters, he added.
According to Accenture’s estimates, 90% of companies are exploring AI or generative AI capabilities. However, Ashraf says fewer than a third of those firms are taking proper steps to set themselves up for success, such as establishing an AI center of excellence or developing use cases in a structured way. He also said that fewer than 20% of companies are getting close to the goals established for AI investments.
To maximize a company's chances of seeing ROI when it comes to AI, Ashraf suggested incorporating these five steps:
–Leading with value. Make decisions on the basis of the “must win” business challenges and strategic imperatives. Ask the question, how can AI address those challenges? For example, a pharma company may use AI to compress drug discovery time. Or, an energy or utility company may be looking for a more efficient way to manage assets or drive capital programs.
—You can start small, but create a clear path to scale generative AI in a big way, and to do so quickly. Accenture finds the companies that are consistently delivering higher ROI are those that scale their AI cases across the organization. Some examples are knowledge management, content generation, and customer experience.
—Unlocking real value happens when you're investing in AI to reimagine or reinvent processes or ways of working. “The technology cost is about 30%, while the 70% resides in things like building the right capabilities, training, and change management,” Ashraf said.
—Invest in enhancing trust and responsibility. There is enhanced risk in using generative AI in particular, and regulation will only increase. However, Accenture has found that fewer than 2% of the companies are investing in a holistic, fully operationalized, responsible AI program, Ashraf said.
—Executive sponsorship. Having leadership on board for what you're going to invest in and how you're going to run the program is important. In looking at the companies Accenture has worked with in implementing AI, at those with CEO-level sponsorship, the ROI has been about two and a half times greater than those without it, Ashraf said.
During the discussion, Ken Washington, SVP and chief technology and innovation officer at medical device-maker Medtronic said that each department is tasked to come up with AI use cases to increase productivity or improve patient outcomes. They’ve gathered over 200 ideas so far, with some receiving a first round of internal funding.
“The responsible application of this technology is critically important, and so is clarity around what this technology really is and what it means to your business,” Washington said.
Sheryl Estrada
sheryl.estrada@fortune.com
The following sections of CFO Daily were curated by Greg McKenna
