Quick ROI vs. innovation: CIOs face competing AI goals

The CIO strategy for AI today is a tale of competing agendas: quick-win productivity enhancements on the one hand, and game-changing long-term innovations on the other.

According to a recent survey from IBM, many IT leaders appear to be favoring one approach at the risk of missing out on the other. And while organizations have begun to see ROI on AI implementations, those focused on innovation don’t expect to see positive financial results from AI projects anytime soon, IBM found.

Nearly half of the more than 2,400 IT decision-makers surveyed say their AI projects have achieved positive ROI, according to the survey results. However, three-quarters of those who haven’t yet found a positive ROI don’t expect it to happen within the next year.

The survey shows a significant split in approaches to AI investment, with some companies focused on quick ROI by deploying off-the-shelf, easy-to-implement AI tools, and others investing in innovative AI projects that they hope will give them major competitive advantages down the line, observers suggest.

When asked about their motivations for deploying AI, the survey respondents were split along three lines: 28% said ROI was their primary focus, 31% said innovation was most important, and 41% said ROI and innovation were equal drivers of their AI spending.

Manish Goyal, vice president, senior partner, and global AI and analytics leader at IBM Consulting, notes that, while short-term gains are attractive, the power of AI is in using it to create competitive advantages, such as deploying new products and services, creating new revenue streams, or “delighting” customers.

“Companies need to find a balance between short-term AI wins and making longer-term investments that can scale across the company and capture the full potential of what the technology can deliver,” Goyal says. “The real advantage of AI lies in its ability to drive significant and sustained innovation and efficiency improvements over time, beyond just immediate financial returns.”

Short-term success

But as IBM’s survey shows, many IT leaders remain focused on short-term gains. For example, respondents saw business value and computing costs as more influential factors impacting ROI than user experience, notes Angelic Gibson, CIO at AvidXchange, an accounts payment automation provider that has embedded AI in its products.

“This suggests that many businesses are taking a reactive approach to AI, prioritizing immediate results and adapting to market pressures rather than proactively using AI to enhance customer value and long-term differentiation,” she says. The survey “seems to paint a picture that companies are eager to compete in a rapidly growing AI market, but rather reveals a divide between reactive and proactive strategies to implementing an AI strategy.”

Gibson acknowledges that some AI projects can achieve ROI in a relatively short timeframe, but she also warns of a danger in seeking ROI too soon.

“Quick projects must prioritize accuracy in AI implementation,” she adds. “While the ROI may initially appear promising, it could come at the expense of product quality, ultimately eroding trust and satisfaction. Without satisfied customers, there’s no foundation for long-term sustainability.”

However, there’s some value in demonstrating the potential of AI through quick ROI projects, counters Jean-Philippe Avelange, CIO at Expereo, a network optimization vendor that has deployed generative AI in its customer service operations.

“The CIO must champion realistic expectations for short-term AI ROI,” Avelange says. “Certain AI applications, like those in hiring or customer engagement, can deliver rapid returns — measured through improved customer satisfaction or increased conversion rates.”

But some AI projects aren’t meant for quick ROI wins, he adds. “More complex AI initiatives — such as integrating AI into core products — demand greater time and patience to demonstrate their full value,” he says.

CIOs can use short-term ROI wins to pave the way for longer-term AI spending, by building trust and momentum, Avelange says. Organizations should look for a balance of both short-term ROI and long-term innovation, he recommends.

“Focusing solely on short-term gains can be a trap,” he says. “If CIOs constantly fight for immediate ROI, they risk neglecting the deeper, strategic challenges that long-term AI innovation can solve. A more deliberate approach is essential — AI capabilities should be designed not as temporary fixes, but as forward-looking solutions that drive sustained value and prevent recurring issues.”

Innovation and ROI

Smart organizations will look for both short-term ROI and longer-term innovation in their AI projects, says Daniel Balaceanu, co-founder and chief product officer at Druid AI, a conversational AI vendor.

The venture capital and IPO markets have been slow in recent years, meaning the pressure to achieve ROI can be intense, he says.

“It’s critical for businesses to demonstrate ROI with every single investment, including AI,” Balaceanu says. “Quick wins are valuable and build trust for more sustained returns and growth by adopting more innovation in the medium to long term.”

Organizations need the right partners and clear strategic plans to achieve both short-term ROI and long-term innovation with their AI projects, he adds. “The key is to align it with overall business objectives and be clear about what you want it to accomplish for your organization,” he says.

It’s possible for organizations to achieve both short-term financial gains and focus on over-the-horizon innovation, says IBM Consulting’s Goyal.

“Enterprises need to look at their AI initiatives as a portfolio — some with faster ROI, while other investments will take a bit longer to drive returns but are more strategic to growth,” he says. “An organization might implement AI solutions that deliver quick wins in terms of cost savings or efficiency improvements while simultaneously making investments to optimize their AI projects with the intent to drive innovation and strategic transformation over time.”