CIOs look to accelerate digital transformation with AI

IT leaders seeking promising AI use cases may be overlooking a potential goldmine: deploying the technology to assist with major IT modernization and digital transformation initiatives.

Leading CIOs at a handful of large enterprises have leveraged generative AI and related tools to rewrite code, redesign workflows, and migrate databases during major digital transformation efforts, a practice that isn’t as widespread as its potential suggests.

“The potential is actually, I don’t want to say ‘limitless,’ but it is,” says Vijay Thangella, head of AI and machine learning at contact center technology provider Avaya. “There’s a very high potential.”

Avaya, using AI tools built from frontier models, claims it can help customers cut contact-center modernization timelines drastically. Revamping legacy contact centers typically requires IT teams to spend months deciphering and manually rebuilding years of workflows, routing logic, integrations, and business rules. AI-assisted modernization can cut the time to a few days, Thangella says.

Managed services provider Ensono also uses AI tools to help customers with tasks such as code discovery and cleaning up legacy code. While most organizations still haven’t used AI to assist with digital transformation, the technology can significantly cut the costs and time associated with large IT modernization projects, says Brian Klingbeil, chief strategy officer at the company.

An emerging sweet spot for digital transformation

Gartner AI analyst Arun Chandrasekaran sees significant potential to accelerate digital transformation initiatives through use of generative AI and related tools, in particular for gathering requirements, mapping legacy code, and performing code quality assurance.

“There’s a lot of interest out there today, but customers are not fully there yet,” he says. “The models are getting better at a lot of these tasks, but they are still often hindered by hallucination rates.”

In many cases, CIOs are still working to improve their organizations’ AI governance and data infrastructure, two foundational steps they must take before their teams can use AI to assist with digital transformation, Chandrasekaran adds.

Interest in the concept is high among CIOs of midsize companies, who often have limited budgets to commit to large-scale, multi-year digital transformation projects and a higher comfort level with risk than IT leaders at multibillion-dollar multinational enterprises, he says.

“It seems like you need to accept or tolerate a certain level of risk to trust your AI to do some things that you were doing yourself,” Chandrasekaran adds.

Leading the charge

Rama Donepudi, SVP and global CIO at Mead Johnson Nutrition, is among the vanguard of IT leaders using AI to assist with digital transformation.

Back in 2024, Donepudi turned to a combination of gen AI and AI-enabled automation to assist with the baby formula maker’s transition from legacy SAP ERP to S/4HANA.

Donepudi’s IT team used gen AI coding copilots to remediate their custom programs for compatibility with the newer ERP package, and they used UiPath AI-enabled bots to automate data validation between the legacy environment and S/4HANA.

In addition, Donepudi’s team used AI-enabled tools such as Enable Now and WalkMe to support the development of training and other learning content development. They also deployed GPT tools to create program communications to employees throughout the transformation.

Gen AI was one tool in the toolbox, Donepudi notes. “We deliberately applied different AI capabilities across development, validation, training, and communications rather than treating AI as a single use case,” he says.

Using AI for content creation resulted in a significant cost savings, he says, and enabled the company to target content toward specific employee roles and make immediate changes as the project progressed.

“AI can generate all of this content if I give it the right prompts, and everything becomes easier,” he says. “My change management overall become easier.”

The benefits of AI were significant, Donepudi adds. Without using AI tools, the company projected the modernization project to take 17 to 18 months, but by using AI, it completed the project in 11 months. The cost savings from the compressed timeline added up to between $5 million and $6 million, he says.

“We went down on Friday evening,” Donepudi told his CIO peers at this year’s CIO 100 Awards and Conference in August of the company’s final transition. “Monday morning the business came back and they were like, Rama, are we on S/4 now? Yes, we are on S/4. They didn’t even realize that we were able to do all of that. That’s the beauty of using AI extensively in our training and testing, documenting. We showed them what AI can do. That’s our story.”

While Donepudi believes there is great potential for AI in digital transformation projects, he also sees hesitation among his peers. As Gartner’s Chandrasekaran observed, many larger organizations don’t have the same risk/reward tolerance that Mead Johnson Nutrition was comfortable with, he says.

In addition, big consulting firms still have fans among the CIO set, Donepudi adds.

“The reason we engage all these big consulting forms primarily is for that program management, change management, comms management, all of that handholding,” he says. “Where these Deloittes, IBMs, and Accentures come into the picture is that they know how to do these large transformations, and you’re touching your entire company — finance, supply, procurement, and sales — and they help navigate the change.”

But for CIOs willing to take a risk, the rewards can be great, Donepudi says.

“It’s a new approach and it’s risky, and I am taking full ownership,” he says. “I’m fully accountable for this one versus, ‘I gave this deployment to IBM for $50 million per year, and it’s on IBM to help us if something goes wrong. IBM is on the hook.’”

The project also gave Donepudi the opportunity to inspire the rest of his organization to trust in the power of AI, he says.

“If I don’t walk the walk of using AI department, how can I go tell my finance, supply, or marketing guys to use AI because it gives you productivity, it gives you an efficiency?” he says. “I took the risk at the end, and it paid off for me.”