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CIO Survey: will you set the GenAI agenda or follow the leaders?
Access the 2024 EY CIO Sentiment Survey
About the 2024 CIO Sentiment Survey
The explosive growth of generative artificial intelligence (GenAI) over the past year has placed Chief Information Officers (CIOs) at a critical inflection point: the chance to set the AI agenda or see their organizations fall behind. This challenge further emphasizes the critical role they play in helping their organizations create value. While visionary CIOs lead the charge in this new frontier, they are also keeping a watchful eye on a broad spectrum of potential risks, from cybersecurity threats to privacy concerns.
The 2024 EY CIO Sentiment Survey provides insights on how they will need to address these challenges to capture the full benefits of emerging technologies. At the same time, it shows how they are expanding their strategic roles within mergers and acquisitions (M&A), business initiatives and digital maturity improvement.
While nearly half the CIOs say they have yet to fully embrace the hype surrounding GenAI, most are dedicating at least 10% of their technology budget to it. They are also eager to expand their charge beyond digitizing internal processes to focus on driving growth for the organization. Indeed, many CIOs appear ready to not only embrace the overarching challenge of keeping up with the pace of change but also to find a way to articulate a transformative vision for the future of their organization. Sign up here to receive the full report.
Key findings from the CIO survey
Organizations increasingly view technology as either a leader or equal partner with the business in driving growth, innovation and resiliency. Yet CIOs may be missing a chance to become more integral drivers of the growth strategy: only 34% want technology to be viewed as the primary driver of growth, innovation and resiliency. This means that many CIOs are still waiting to seize the reins and play an even stronger role in influencing how technology grows the business.
CIOs can drive significant improvements when they are more engaged in setting strategy for the organization. CIOs that take full ownership of digital initiatives, report a success rate that is at least 24% higher than others. The differences are stark. When it comes to building a new digital business, for example, organizations where CIOs take full ownership say their chances for success increase by as much as 79% than in organizations where they are somewhat or not responsible.
CIO considerations
The M&A market is rising, with companies citing plans for joint ventures and strategic alliances to embrace innovative technologies. Eighty-six percent (86%) of CIOs say they plan to acquire or partner with GenAI-based software platforms or businesses, often finding these investments yield more value than building in-house.
The majority of CIOs (73%) say they are significantly involved in transaction due diligence. However, they need to extend their involvement in these transactions throughout their lifecycle—from pre-sign to post-close work to improve outcomes through strategic alignment, technology integration and operational efficiency. Only 37% of CIOs are engaged in the post-close phase, a critical period involving the integration and transformation of IT operations. This lack of post-close involvement may explain why only 32% of respondents say they significantly meet deal objectives.
However, many foresee the use of AI and GenAI improving the transaction process in the areas of data analytics (43%) as well as IT and cyber due diligence post-merger integration (41%). The potential of its high impact may include automating documentation analysis, simulating cyberattacks, analyzing vulnerabilities in software applications, data integration and identifying overlaps/inefficiencies in systems.
CIO considerations
Access the 2024 EY CIO Sentiment Survey
Nearly half, or 49%, believe that Gen AI will substantially enhance the value of their organization. That is significant, but it also means more than half are still not yet ready to believe that Gen AI will justify its early hype.
Yet, despite these misgivings, CIOs are forging ahead with GenAI. Eighty-three percent anticipate their budget for GenAI to increase over the next 12 months, with 12% expecting an increase of more than 50%. Most CIOs reported that they have dedicated at least 10% of their annual IT budget to Gen AI, which represents a substantial amount for larger enterprises. In addition, when the CIO and CEO both lead the AI agenda, budgets are typically higher, up to 13% of the total IT budget.
Within their organizations, 63% of CIOs say they are the leaders of the GenAI agenda, most closely followed by the CEO (55%). Additionally, 26% reported that they have a GenAI solution in production, while 47% have one in either a pilot or proof-of-concept project.
The survey results reveal that even with the progress they have made so far, many organizations still have extensive work to do in finding a path forward as they leverage the full benefits of this transformative technology.
CIO considerations
Nearly 37% of CIOs say that generating revenue is their main reason for moving forward with GenAI, while 27% cite its potential for reinventing their business model. One in five, or 19%, say their main reason for deploying AI is to reduce costs.
To enable growth, CIOs can pivot to a mindset that embraces revenue generation and efficiency through process optimization. In some ways this is already happening: many say that they are already expanding their responsibilities beyond digitizing internal processes (53%) to building new digital products and services (47%).
For technology-specific investments, however, 65% are looking to automate manual IT operations with GenAI, and 56% would like to use it to provide help desk and self-support solutions.
CIOs are trending away from building AI capabilities in-house and are primarily leaning on acquisitions and partnering to enable generative AI-based solutions. Organizations that view technology as a primary driver of growth are more likely to be pursuing GenAI use cases. While those organizations are also more likely to say they are building in-house AI solutions with internal talent, the survey also found that 86% said they see more value in acquiring or partnering with a GenAI-based software platform or business.
This emphasis on working with external vendors is reflected in hiring trends. Only 11% of CIOs say they are hiring for skills for GenAI and just 8% for other artificial intelligence skills. In contrast, CIOs are hiring for in-demand skills such as cloud and edge computing (55%), Internet of Things (49%) and data science (49%).
The survey also indicates that CIOs who focus on product development are also more likely to adopt GenAI. In fact, 94% of organizations that have allocated more than 25% of their IT budget to product development also have a GenAI initiative in pilot or production.
CIO considerations
Views of GenAI vary greatly by sector, size of the company and whether the company is public or privately held. For example, private companies tend to view GenAI as an opportunity for reinvention, while public companies are more likely to consider it a tool for lowering costs. In addition, medium and small organizations (by revenue) also have greater uncertainty about the benefits of GenAI than larger companies. Executives from mid-sized organizations are significantly more likely than those at larger companies to say that they did not see GenAI as substantially enhancing the value of their organization enough to justify the hype, 43% vs 36%.
The EY CIO Sentiment survey, developed in collaboration with Oxford Economics, gathers insights from CIOs of leading organizations on the challenges they face in pursuing a growth agenda in the age of GenAI. Respondents include 500 US-based CIOs from a broad range of industries: consumer products and retail, healthcare, life sciences, advanced manufacturing and mobility, tech media and telecom. The survey, conducted in March 2024, gathers their opinions on a broad array of technology and business challenges, including the depth of their involvement on corporate transactions, progress in adopting emerging technologies such as AI and how they are upskilling talent for the digital future.
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