SEPTEMBER 3, 2024
Artificial intelligence (AI) is a hot topic across Evanta’s C-level communities, particularly our Chief Data and Analytics Officer (CDAO) communities – as many see it as a disruptive technology that businesses need to embrace to stay competitive. As technology quickly advances, we asked 150 CDAOs to share the progress they’re making along the AI adoption journey, as well as their challenges and outlook for the future.
AI is going to increase the efficiency of everyday workers, and give them the time to focus on the tasks that really matter."
- CDAO community member
In the survey, data leaders answered an open-ended question about their general thoughts on AI, and five key themes arose from their responses. These themes capture their overall sentiment towards AI, reflecting a mix of excitement, caution, and a strategic approach to its adoption and implementation.
1. Transformative Potential and Business Value
CDAOs are highly enthusiastic about AI's potential to transform business operations and unlock significant value. In the survey, a staggering 91% of respondents report having a positive outlook on AI and its impact on the future of business. Only 9% say they have neutral feelings about AI, and it is worth noting that none of the data leaders surveyed report a negative outlook.
Data leaders see AI as a tool to drive innovation, enhance productivity, improve decision-making and solve business problems. One CDAO said, “The continuous advancements in AI technology open up new avenues for efficiency, scalability, and competitive advantage, and I am eager to explore and implement these opportunities within our organization.”
Another data leader shared, “AI is a tool that has to be applied wisely to a business problem. AI can unlock tremendous value for business across both top line and bottom line.”
2. A Focus on Practical, Value-adding AI Use Cases
While there is excitement about AI, there is also awareness of the hype surrounding it, especially concerning capabilities and overestimation of market valuations. A few CDAOs commented that “AI is a buzzword" or that use cases can be “limited.” Data leaders recognize that while AI has tremendous potential, it is important to manage expectations and avoid overhyping its capabilities.
To navigate this, CDAOs emphasize the need to focus on practical use cases that add measurable value, and 84% of CDAOs have already accomplished this in some capacity. Regarding progress toward AI implementation, 36% of data leaders report having identified some AI use cases for their organization, 19% have completed pilot projects and 29% have already achieved measurable results.
As AI and generative AI implementations are exploratory at many organizations, CDAOs acknowledge use case selection as critical to their success. One data leader shared, “There is immense pressure to use generative AI to deliver value, although the business cases and ROI estimates are yet to be proven. That is why we are focusing on clear and specific use cases.”
3. Cautious Optimism and Responsible Use of AI
While optimistic, CDAOs highlight three substantial areas of concern they have about their AI implementations, including the rigor of their data privacy measures, workforce governance practices and if they can manage the security risks. In the survey, nearly 70% of data leaders report concern for each of these issues.
This a drastic increase from our 2023 survey on generative AI, where less than 25% of data leaders reported concerns about these issues. It is presumptive that as they implement more AI use cases, they are uncovering additional challenges.
In the comments, CDAOs focused on the ethical, regulatory, and practical challenges associated with AI, and they stressed the need for responsible implementation to mitigate risks. One CDAO highlighted this in their comment, stating, "We encourage our entire organization to embrace it, but responsibly and safely."
Another CDAO shared their perspective, saying, "AI raises a lot of ethical and societal questions that need to be addressed. It's important that AI is developed and used in a way that is safe, responsible, and beneficial to society as a whole."
4. Foundational Requirements and Data Governance
There is a strong emphasis from CDAOs to address the foundational elements that support AI implementation to maximize its benefits, including data governance and data quality. One CDAO commented, “Enough focus is not being given to foundationally setting up the data that feeds AI models. There is a lot to be done in terms of data management and governance before AI can become a standard solution to solve problems.”
Others warned of the repercussions of implementing AI without the proper foundations, saying, “We must ensure appropriate governance from the start. If we don't, corralling it in the future may prove to be near impossible.” Another recounted their experience, “Like most companies, our foundation is lacking to use AI in a safe manner.”
CDAOs also discussed challenges to funding data foundation initiatives, as the ROI is not as clear-cut as other investments. One CDAO highlighted this with their statement, saying, "AI is a big lever for productivity growth, but it also needs significant investments in enabling the foundation."
5. Long-Term Vision for AI
Although CDAOs are being urged to implement AI solutions, they know that to be successful, it is a long game. In their comments, many CDAOs described how they see AI evolving in the future. These are a few of their comments:
Generative AI and AI in general have come a long way. It's going to have a profound impact on many businesses; however, adoption is slow, and it will take years for AI to create impact on certain businesses.”
Powerful tool, but the business needs to understand what problems AI can help it solve, and then proceed with the implementation – not the other way around.”
AI is very early in its use cases. The vast majority of people are not strong at writing good prompts which can yield ineffective results. I imagine we will see a bubble of big investment with marginal return, but big returns over time as the tech matures.”
Traditional AI has a much clearer path to delivering business value, while generative AI still needs to overcome technical limitations even before addressing the business challenges."
AI is powerful, but I don't believe we will go customer facing with it until we are convinced we can be transparent enough and know how the next government will take their stance – as they are the regulators.”
For the complete findings from our recent CDAO Community Pulse Survey on AI adoption, check out our infographic.
In addition, AI will be a discussion topic at many of our upcoming CDAO gatherings. Evanta community members can view upcoming opportunities to discuss AI adoption in person and virtually with peers on MyEvanta.
Not a member of the Evanta community, yet? Join your local CDAO community to engage with your peers on this topic.
by CDAOs, for CDAOs
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