What world-class IT looks like in the gen AI era

A business executive asked me to set a high bar for his organization and define what world-class IT looks like today. I had to ponder my answer because AI has driven a significant evolution in business expectations of IT departments.

The digital transformation era required IT to extend beyond operational responsibilities into areas that drive business growth, including launching digital products, enhancing customer experiences, and establishing a data-driven organization. During the pandemic and the subsequent period of financial uncertainty, many IT departments’ charters were driven by cost-savings objectives, including automation, FinOps, and improving employee experiences. Now, as the generative AI era begins to take hold, CIOs should expect to recast their missions and objectives, as boards and executive committees have reshaped opinions on what world-class IT looks like.

With CIOs rebranding IT and asking whether AI might be the end of IT as we know it, AI is dramatically changing IT’s charter today. CIOs are rethinking IT’s organizational model to pursue new business objectives, accelerate IT efficiencies, and address disruptive risks.

AI drives greater business expectations

Business leaders want the CIO and IT to help increase employee adoption of AI while avoiding the risks of rogue AI agents. These are additive responsibilities on top of IT’s charter of driving innovation, automating to improve efficiencies, and enhancing security.

What world-class IT in the gen AI era looks like differs depending on the organization’s goals, but a few areas stand out. Answering the executive’s question and later presenting to his leadership group, I unpacked my view of world-class IT into two fundamentals:

• Redefining how IT partners with stakeholders to evolve the culture and accelerate AI adoption
• Expanding IT’s operating model by embracing experimentation, delivering business value from AI deployments, and standardizing on extendable platforms

Here are several examples of how world-class IT departments are leading their organizations in the gen AI era.

Developing meaningful business relationships

According to Gartner, generative AI is heading into the trough of disillusionment, signaling that two years of gen AI hype and hope are giving way to pragmatism. IT departments will require architects, engineers, and product managers with strong business acumen to draft vision statements and present business cases for AI and other investments. Some CIOs are embracing a product-based IT model to guide prioritization, excel at user experience, and deliver outcomes.

“Our team is constantly watching the market and demonstrating the value of new technology, enabling them to make the case for significant investments and partnerships effectively,” says Rani Johnson, CIO of Workday. “This strategic function is crucial for securing executive sponsorship, as the IT team often lacks the authority or AI jurisdiction to make these high-stakes decisions on its own.”

Top CIOs view relationship building as a core transformational competency, and steps they take to develop their leaders include:

• Assigning a wide group of IT leaders and high potentials a performance objective for developing business leader partnerships
• Formalizing active listening, communications, and other leadership collaboration skills
• Mentoring leaders on having conversations that lead to defining clear business objectives
• Reading the tea leaves to sense when business leaders are reprioritizing or pivoting around their goals

Evolving the culture faster to deliver value from AI

Digital trailblazers have always faced change management challenges, including focusing early-adopting employees on strategic objectives while managing detractors. Gaining employee buy-in is even more important in the gen AI era, as department leaders want speed to deliver AI productivity improvements, while many employees fear that AI will take their jobs.

Three recent studies highlight the challenges facing IT departments in finding ROI from AI initiatives while guiding employees through change.

• MIT Nanda reports that only 5% of custom enterprise AI tools are being deployed to production.
• Workday reports 75% of respondents to its recent survey are comfortable working alongside AI agents, but less than 50% are at ease with AI agents assigning tasks to them or having autonomous agents operating in the background without their knowledge.
• AWS reports that 60% of organizations have appointed chief AI officers, but only 14% have change management programs.

CIOs must aim for higher production delivery rates for AI projects to ensure the board and executives continue to invest. Closing that gap requires adopting a more proactive approach to change management and cultural transformation.

“The role of the CIO is shifting from operator to visionary strategist by enabling business units to innovate safely, master storytelling, and guide organizations through constant transformation,” says Rami Mazid, CIO at Nutanix. “This fundamental shift is not just about tools and platforms, but about how CIOs think, lead, and shape organizational culture. CIOs are expected to be business value architects, translating emerging technologies, especially AI, into measurable outcomes, and we’ll see metrics like innovation velocity — measuring the number of new AI-driven use cases deployed — grow in importance.”

Three areas of focus include:

• Elevating change management’s importance in agile development
• Partnering with HR on incentive and performance plans that encourage AI adoption
• Defining the parameters to guide which AI experiments get prioritized

Enabling all employees to experiment safely with AI

Low-code and citizen data science platforms became available over two decades ago. Some IT departments embraced them and provided best practices for employees outside of IT to develop applications, data pipelines, and dashboards. Other IT organizations, fearing a mess of shadow IT, technical debt, and security issues, were slower to empower business teams with development tools and opportunities.

Citizen development initiatives help democratize IT by empowering business teams to experiment, build, and support technology capabilities. Generative AI expands the scope and scale of that strategy, especially as more organizations experiment with role-specific AI agents and AI workflow automation tools.  

“The gen AI era is going to lead to the humanization of IT, and more employees will be empowered to use AIs to work more efficiently, incorporate more data into their decisions, and develop their own tools,” says Andy Sen, CTO of AppDirect. “A world-class IT organization will behave as a facilitator, giving employees a playground to develop innovative solutions while making sure intellectual property and security risks are minimized.”

Guardrails is the modern term for defining governance and technical strategy. World-class IT teams define AI governance not only as policies and risk protections, but also the prioritization steps, investment criteria, platforms, development processes, quality assurance requirements, and lifecycle considerations for developing domain-specific LLMs and AI agents.

 “World-class IT in the gen AI era will be defined by how effectively it helps people do their best work,” says Ed Frederici, CTO of Appfire. “Technology leaders are shaping how people and technology collaborate and creating cultures where teams can embrace AI with confidence while keeping governance and security at the center.”

Here are three traits of highly effective IT departments in this area:

• They establish frequent and regular learning programs to engage employees in smart and compliant AI practices.
• They co-create AI capabilities in agile teams that include subject matter experts and end-users involved in the impacted workflows, technologists with the required skill sets, and partners who bring outside perspectives and expertise.
• They avoid top-down edicts and encourage self-organizing standards, where centers of excellence review best practices and guide teams on adoption.

Scaling business value delivered from proprietary data

IT departments have increasing responsibilities, complexities, and opportunities in overseeing the company’s data, especially its intellectual property. Some IT departments become overwhelmed by data velocity and are constantly playing catch-up with their infrastructure and data management practices.

“In the gen AI era, world-class IT will be defined by its ability to manage the massive volumes of complex data that AI depends on — something today’s infrastructure simply isn’t built for,” says Rajan Goyal, CEO of DataPelago. “AI has made data management crucial for successful business outcomes, and effective CIOs will increasingly act as both technology and data leaders, responsible for architecting systems that can scale to meet AI’s growing demands.”

A primary objective for IT departments in the gen AI era is to ensure the company’s crown jewels of data become a source of competitive value. Data must become intelligence, and this requires a collaborative effort between data scientists, data governance specialists, data security experts, and other DataOps engineers.

“CIOs are emerging as the chief intelligence orchestrators, architecting the platforms, data, and guardrails that allow humans, copilots, and agents to thrive together,” says Suman Papanaboina, managing director of software architecture at Concentrix. “In this new era, world-class IT is measured by how effectively it drives trust, resilience, and business outcomes, and makes intelligence the enterprise’s defining competency.”

Here’s what world-class IT teams are doing differently:

• They organize teams around delivering data products and developing AI agents, rather than around functional responsibilities.
• They focus on digital transformation metrics, such as growth, trust, and velocity KPIs, rather than classic operational metrics.
• Their performance goals include teaching objectives, particularly in areas such as data literacy, data cataloging initiatives, and best practices for using analytics tools.

Embracing lifelong learning

Experts also emphasized the importance of CIOs establishing learning cultures within their IT organizations, as gen AI capabilities are evolving rapidly.

“Organizations with world-class IT will redefine their culture as one where humans and machines learn together in a safe and responsible manner,” says Sunil Senan, SVP and global head of data, analytics, and AI at Infosys. “Leaders must foster resilience, continuous learning, and an environment where AI augments human creativity and does not replace it.”

A commitment to lifelong learning goes well beyond training, certifications, and opportunities to experiment. World-class organizations will encourage high potentials to step out of their comfort zones and provide opportunities to visit customers, attend industry-specific events, and experience a day on the job in select operational functions.

Defining what world-class IT looks like should be every CIO’s objective during the current planning and budget season. IT organizations holding on to pre-genAI charters and objectives may find their businesses lagging behind the competition and stakeholders voicing frustration over IT’s leadership.