The following is a guest post from Jim Caci, CFO at AvePoint. Opinions are the author’s own.
Today, most leaders agree generative AI will benefit their organizations, and early research shows that AI adoption has been broad and swift across different sectors of the economy. In one new international study, for example, 76% of organizations said that they were already using AI in some capacity and this number is expected to grow.
Exact estimates about the benefits of AI vary, but the World Economic Forum suggests it may add over $15 trillion to the economy. McKinsey, meanwhile, is much more conservative, and projects that AI will generate anywhere between $2.2 and $4 trillion per year in corporate profits. Even though estimates vary by trillions of dollars, the financial benefits of AI are expected to be immense. Profits will grow as companies learn how to maximize the value of their AI investments.
However, as more companies and more CFOs venture into the world of AI, decision-makers need to understand what realistic outcomes look like in the short term and the strategies needed to support long-term success. AI comes with an unavoidable upfront cost, and it will likely take time to realize its full benefit, but, with proper preparation and enablement, it’s a worthwhile investment that CFOs should champion.
Invest early and manage expectations
According to MIT Sloan, over 90% of companies have found a way to make money with AI in 2023 already, but we’re far from seeing game-changing revenue growth. That’s why CFOs need to manage expectations, including their own. Everyone in the C-suite (and those responsible for or those heavily scrutinizing the profitability of an organization) must remember that just like any other business investment, AI needs time and support to fully pay off.
One way to help manage expectations is by identifying an ROI timeline. That way, you can keep your C-suite colleagues, employees and shareholders if you’re a public company informed as to when you expect to see the most tangible benefits from this technology.
Engage employees and invest in training
While many organizations have invested in AI, for example, buying Copilot for Microsoft 365 licenses, only 46% have offered employee training resources to support AI use and implementation. This suggests that many organizations may be underprepared to implement AI despite their desire to adopt it quickly. That’s why AI adopters need to train their employees and invest in engagement strategies to get their workforce up to speed on the new technology.
To ensure that your AI is worthwhile — because it’s not cheap — your organization needs to prioritize upskilling your people before, during and after implementation. As the CFO, you control the budget, but not always the implementation or deployment of certain resources. In the case of AI, it’s imperative that you work with departmental leaders to make sure AI engagement is encouraged and employees have the right training to succeed. The bottom line is you can’t just invest in software; you must also invest in support to get the job done right. With enough time and training, AI can change the way that your company operates.
Take stock before investing further
On top of current investments in AI, a new report found that more than 80% of organizations are planning to increase their AI spending in the future, with 60% of organizations reporting that they plan to allocate at least a quarter of their technology budget to AI in the next five years.
While the enthusiasm is great, I encourage all leaders to make sure that their users are getting the most benefit from this technology. Measure usage against your goals so that even if you do not see a direct correlation to profitability or revenue growth, you can see productivity gains. If certain users are not using their licenses, reassign them. It’s all about making the most of what you have first, proving the value and then making calculated decisions from there.
Ultimately, there is no disputing the huge potential for AI and why CFOs should get behind the investment. As you get ready to accelerate your AI strategies, remember to be patient, invest in training and enablement and measure success early and often. With those three elements in mind, your AI investment will pay off — even if it takes time.