AI Adoption Projects Are ‘Investment Roulette’ as Fear of Missing Out Drives Flawed Decisions
May 14 2024 - 5:00AM
Business Wire
Barely half (53%) of emerging technology
adoption projects deliver measurable business benefits and impact,
finds research from Ardoq
Ardoq, a SaaS company dedicated to helping enterprises
successfully navigate digital transformation, today announced new
research revealing the trial-and-error state of emerging technology
adoption. The ‘Emerging Technology Adoption 2024’ report finds that
barely half (53%) of research projects deliver measurable benefits
and impacts. 61% of CIOs say their investments are often driven by
the fear of missing out. Furthermore, nearly four in five CIOs
(79%) argue they have to take risks on emerging technologies or
they will ‘go the way of the dinosaurs’.
The tension of balancing risk versus reward is present in all
emerging technology research projects, but most prominently around
Artificial Intelligence (AI). Key findings of the report
include:
- 91% of CIOs say that if successful, emerging technology
research can put them at the forefront of their market – but 99%
say the success rate tends to be much lower than for established
technologies.
- Two-thirds of CIOs (66%) believe competitors will ‘eat them for
lunch’ if they don’t move quickly on AI.
- Yet the majority (65%) feel that AI is the most high-risk
technology they've ever invested in, and there is a ‘moral
pressure’ on them to get it right (81%).
- 82% of IT leaders say it’s easy to ‘AI wash’ products by
implementing new capabilities, without necessarily creating any
tangible business benefits.
“In today’s fast-paced digital era, those that can adopt new
technologies quickly and fuse them into the fabric of their
business can unlock huge rewards,” commented Erik Bakstad, CEO and
co-founder, Ardoq, “We have seen this time and again, but it is not
since the internet emerged that a technology has promised such
potential as that posed by AI today. However, investing in emerging
technologies like AI is not for the faint of heart. Organizations
must be prepared to navigate the risks, or could find their
technology investments falling short of expectations.”
The research found that the average enterprise spends $43.4
million annually on emerging technology projects. Yet, despite
these huge sums, 69% of CIOs say predicting the ROI on such
investments is little more than a ‘finger in the air’ exercise.
Other notable findings include:
- Only 32% of organizations look for a tangible ROI from an
emerging technology adoption project within the first 12
months.
- Just over a quarter (26%) of CIOs expect to see an ROI within
five to ten years.
- Nearly two-thirds (64%) of CIOs say they’ve been burned in the
past by investing in technologies that failed to deliver and made
the business more cautious about future investments.
Lack of EA leaving organizations blind to the impact of
change
For most organizations, advancing their enterprise architecture
(EA) is key to unlocking the full potential of emerging technology
projects. One-third (33%) of CIOs say their EA currently relies on
time-consuming processes that leave them blind to the impact of
change. Other key findings include:
- 89% of CIOs say it is difficult to maintain full visibility and
control of risk across the IT portfolio and anticipate the impact
of evolving regulations in emerging technology adoption projects.
This underscores the need for a more agile and transparent approach
to EA.
- 71% of organizations rely on manually mapping – or do not map
at all – to determine the impact of a new technology on existing
processes and capabilities, and the potential benefits it will
deliver. This presents a critical area for improvement, where
automated and more sophisticated mapping tools can drive efficiency
and effectiveness.
- 68% of CIOs say if they didn’t constantly alter course, it’s
unlikely any of their emerging technology adoption projects would
succeed.
“To reap the rewards of emerging technology investment,
organizations must be prepared to take a leap of faith,” continued
Bakstad. “Change is not just inevitable, it's the lifeblood of
progress. Organizations must therefore assume they will be uprooted
and position themselves to be able to pivot, to stay on the path.
By harnessing data to inform decision-making at every turn,
organizations can navigate the complexities of emerging technology
adoption with confidence. This requires a change in the perception
of EA from an IT capability, to a critical business discipline that
helps ensure the integrity of enterprise solutions.”
The report is based on a global survey of 700 CIOs and other
senior IT leaders in enterprises with more than 2,000 employees. It
was commissioned by Ardoq in partnership with Slalom and conducted
by Coleman Parkes between March and April 2024.
About Ardoq
Ardoq offers a cloud-native SaaS platform for Enterprise
Architecture and digital transformation. The platform provides
organizations with the insights and analytics needed to navigate
complex business landscapes. By facilitating comprehensive
documentation, analysis, and visualization of data, Ardoq empowers
teams to make informed decisions and execute on strategies.
Adopting emerging technologies, reducing risks or unlocking growth:
Ardoq is an essential solution for businesses aiming to increase
competitiveness and thrive in the digital age.
Ardoq was founded in 2013 and has offices in New York, London,
Oslo and Copenhagen. Ardoq’s 350+ customers come from all over the
globe and span various industries, including companies such as
British Telecom, MUFG, Carlsberg Group and ExxonMobil.
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alex.asif@sparkcomms.co.uk