IT Leaders Focus on Productivity and Cost in AI Adoption
IT leaders are primarily focused on using artificial intelligence (AI) to boost worker productivity and are hesitant to pay extra for new AI features, according to a recent survey. The findings highlight a cautious approach to AI implementation, with cost concerns and a prioritization of efficiency gains over more advanced applications leading the agenda.
Productivity and Headcount
Over two-thirds of IT leaders have concentrated their AI investments on enhancing employee productivity, as reported in the AI Priorities Study by Foundry. A bit over half are using AI to improve customer support or enable innovation. Less than half are utilizing AI to explore revenue opportunities or accelerate development speed. This focus on enhancing output, and in some cases, reducing expenditure, is also reflected in the expectation of workforce reductions. More than half of those surveyed anticipate that AI will eventually enable workforce reductions.
Cost Cutting vs. Innovation
Cheney Hamilton, a research analyst at Bloor Research, notes that the initial focus on efficiency gains and cost-cutting when exploring new technology like AI is not surprising. She also highlights the contradiction between AI being an employee enhancement tool, while the expected workforce reductions are at odds with this view. “To me, this suggests that many organizations still see AI as a cost-cutting exercise, rather than a powerful tool that can be used to redefine and improve how work is done,” says Hamilton, who is also CEO of Find Your Flex Group. She further adds that this approach could lead to talent loss as well as legal and ethical issues.
Paying for AI
IT leaders surveyed have mixed beliefs on whether they should pay extra for new AI capabilities for their existing IT solutions. Approximately 45% expect AI enhancements without extra charges from vendors, while 42% are willing to pay a premium for AI tools that meet their specified requirements.
Patrick Richards, CIO of Motive, suggests that many IT vendors may have a tough time remaining competitive if they begin charging more for AI features. He doesn’t expect the extra charges to remain for long: “Like all companies, [IT vendors] will have to find ways to use AI to save cost, move faster and build better products at the same or less cost,” he says. “Eventually AI will help companies building AI sell AI for less.”
Continuing Investment
Despite the challenges, the Foundry survey also revealed that 95% of IT leaders reported that they are accelerating their use of AI. Almost nine in 10 have invested, or plan to invest, in tools to build AI capabilities internally. Over half plan to grow their AI budgets for the year, a slight decline compared to the 61% who raised their AI budgets the previous year. Nearly all IT leaders, about 98%, reported struggles with implementing new AI initiatives. Key challenges encompass a lack of in-house expertise, justifying a business case, and competing company priorities.
