Does IT have a value problem?

CIOs are challenged to communicate IT’s business value when the benefits of IT initiatives are realized in business-unit financials and workflow efficiencies. But a deeper question every CIO should ask is whether their IT department actually does have a value problem, where they might be getting things done but make little impact on business outcomes.

Here, honest evaluation is key. Research consistently shows a divide between how well IT is perceived to be functioning and how business executives recognize the value delivered. Examples of IT’s sagging reputation include low executive perception of IT services and underperforming digital investments.

IT operational improvements, security enhancements, and other risk-reduction programs are unfortunately recognized as core IT functions rather than strategic value drivers. Focusing IT’s value narrative on operational functions can put IT leadership positions at risk when the CFO seeks cost reductions from AI or other technology benefits.

IT must deliver value through leadership that drives change, growth outcomes from AI and data initiatives, and improved experiences.

“When leadership oversimplifies IT priorities like AI by reducing value to cost savings alone, it creates a flawed framework for evaluating innovation,” says Ha Hoang, CIO at Commvault. “The real opportunity isn’t just expense reduction; it’s capability expansion. And meaningful indicators of progress include improvements in operational efficiency, speed of decision-making, and customer or employee experience.”

Value problems start with leadership

The 2025 State of the CIO report highlights a part of the issue around IT’s potential value problem. Even though 82% of CIOs say their roles are becoming more digital- and innovation-focused, only 50% see themselves as business leaders. Is it a lack of confidence in collaborating with executives, gaps in understanding business operations, or a lingering cultural divide between business and IT?

Whatever the cause, CIOs who show up as tech leaders first have a harder time tying investments to outcomes and communicating how IT initiatives deliver business value. There’s an urgency here, as the Digital Leadership Report finds that digital leaders expect to stay with their employer for 3.3 years — relatively little time to demonstrate impact.

But it’s not just a leadership gap when business executives are underwhelmed by IT’s impact. The 2026 Technology Investment Management Report from Apptio highlights confidence gaps in technology investment decisions as well. The largest such gaps include 90% being unsure of an investment’s value or ROI, 84% distrusting the data, and 82% reporting misalignment with organizational objectives.

Recommendation: First, IT leaders must work to communicate IT’s value in business terms, aligned with strategic drivers, not in terms of what IT is doing technically or how it’s improving operations. Second, CIOs must capture the financial impacts from trusted data and AI, not just the qualitative benefits of improving data quality or instituting AI governance. Lastly, IT leaders should develop roadmaps that deliver value with every release, rather than communicating short- versus longer-term benefits.

AI amplifies the value gap

IT’s value gap may have gotten worse over the past year, as CIOs have struggled to deploy AI experiments into production and to deliver ROI from AI initiatives.

“IT never had a value problem, but it’s had a value articulation problem,” says Vikram Bhandari, chief technology and innovation officer at Riveron. “When AI ROI is framed purely as headcount reduction, IT gets boxed into a cost-center narrative. The real opportunity is using AI to scale revenue, reporting, and decision-making without linear cost growth. That’s how IT moves from cost center to strategic driver.”

It’s challenging to forecast and measure non-cost returns from AI investments, such as increased revenue and market share. Additionally, many AI initiatives start as experimental POCs, and organizational learning is required to identify and pursue optimal value drivers.  

“Measuring ROI on AI investments is critical, even when the return isn’t fully known upfront,” says Ryan Downing, VP and CIO of enterprise business solutions at Principal Financial Group. “What matters most is creating the space to test, learn, and pressure test assumptions so leaders can see where AI truly moves the needle. The key is aligning those early insights with the broader enterprise strategy so teams can scale what works and sunset what doesn’t. Over time, the real impact comes when those capabilities allow the organization to operate differently and unlock new growth.”

Recommendation: Focusing on AI’s productivity and workflow efficiencies can trap CIOs into cost benefits largely realized through headcount reductions. AI is only reshaping businesses, and AI agents are not yet driving digital transformation. CIOs focusing on use cases that drive revenue, deliver new products, or transform customer experiences are steps ahead of those who use AI only to optimize operations.  

Deliver business value through trusted data

CIOs will have to partner with CFOs to address any perceptions that IT is underdelivering on financial expectations. But before approaching the CFO, CIOs should first partner with the CMO on AI growth initiatives.

While 93% of marketers have a dedicated gen AI budget, only 8% are very confident in their organization’s AI governance, according to the report Marketers and AI: Navigating New Depths.

Therein lies a challenge CIOs can address through an AI governance program that balances guardrails with strategy. Focusing only on risk mitigation is one way CIOs paint themselves back into a compliance narrative rather than being a partner in growth.

CIOs need to do both, and one important way to accomplish this is to enable citizen analytics and develop trusted data products. By developing data products, CIOs can streamline much of the upfront data pipelines, governance, and management needed to deliver trusted data assets that people, tools, and AI can then use for different purposes.

“Creating a data product starts with knowing when it’s justified,” says Jed Dougherty, SVP of AI and platform at Dataiku. “Look for repeatable business decisions supported by reliable, well-understood data and infrastructure capable of meeting quality and availability expectations. Measure value by linking the product to business outcomes and adoption, tracking how widely it’s used and whether it improves the decisions or processes it supports.”

Recommendation: Product-based IT organizations developing data products aligned to AI strategies are seen as delivering business value to internal customers, with defined roadmaps and customer support.

Value through delightful experiences

Want a direct measure of IT’s value? Capture employee satisfaction (ESat) on the IT service desk, customer satisfaction (CSat) on digital tools provided to customers, and stakeholder satisfaction when delivering workflow-improving AI agents.

If satisfaction and usage aren’t improving, then chances are end-users are using alternatives. Inside the enterprise, that likely results in shadow IT, an opportunity for CIOs to step in and turn around capability or usability gaps.

“As CIOs, when ROI is not fully clear upfront, we focus first on the real problems teams are experiencing,” says Tomás Dostal Freire, CIO and head of business transformation at Miro. “If people create work-arounds or use unofficial tools, it is usually a strong signal that something in the workflow isn’t working. Our responsibility is to formalize what already proves effective and then measure improvements in speed, quality, or delivery.”

Delivering a delightful user experience and improving user satisfaction metrics don’t happen by having engineers glued to screens and focused only on implementation. As IT departments leverage AI’s coding capabilities or adopt vibe coding, there’s an opportunity to encourage more engineers to observe how people get work done and develop their business acumen.

Recommendation: Many SaaS platforms are overhauling their user experiences to showcase agentic AI capabilities. Workflow integrations and the use of MCP servers to connect AI agents may lead to SaaS platform evolution and consolidation. CIOs looking to demonstrate IT’s value will develop change management programs to help employees build AI literacy and transition to agentic experiences.

Recommendations for CIOs 

CIOs of world-class IT organizations recognize that developing meaningful business relationships, enabling employees to experiment with AI, and promoting lifelong learning are three key building blocks to developing an IT culture focused on delivering business value. IT’s portfolio of initiatives must include roadmaps tied to growth, and CIOs must lead communications about the business value delivered.