Only 11% of CIOs Have Fully Integrated AI Due to Concerns over Data and Security

Singapore, October 23, 2024 – A staggering 84% of enterprise Chief Information Officers (CIOs) believe that Artificial Intelligence (AI) will be as transformative to their organisations as the advent of the internet. However, a mere 11% report that they have fully implemented AI, with many facing technical and organisational challenges primarily related to security and data infrastructure that must be resolved before wider adoption.

These observations come from a recent survey by Salesforce, which polled 150 confirmed CIOs from businesses with more than 1,000 employees. The findings provide a clear picture of the current state of AI in enterprises and the significant hurdles that organisations need to overcome as they progress towards full AI integration.

Key Findings:

• CIOs feel pressure to be AI experts: 61% of CIOs feel they are expected to know more about AI than they currently do, with many turning to their peers for guidance.
• AI is seen as a game-changer, but CIOs are cautious. While 84% of CIOs acknowledge the significance of AI for businesses, 67% are approaching its adoption more cautiously than they have with other technologies.
• Prioritising data over AI: CIOs are allocating a median of 20% of their budgets to data management and infrastructure, compared to only 5% on AI. Security and privacy concerns, along with untrustworthy data, remain their primary concerns regarding AI adoption.
• Business partners must adjust their AI expectations: Although 66% of CIOs believe that AI investments will deliver a return on investment (ROI), 68% feel that other business units have unrealistic timelines for when that ROI will be realised.
• AI readiness varies across departments: While functions like customer service are seen as having significant AI potential, they are also perceived as being the least prepared to adopt the technology.

Juan Perez, CIO at Salesforce, stated, “Generative AI is one of the most transformative technologies of this century. This research sheds light on the groundwork that CIOs across industries are laying in preparation for a truly transformational AI rollout.”

The Discrepancy Between AI Implementation and Stakeholder Expectations

77% of CIOs report that executive support for AI initiatives is strong as AI usage increases quickly in the workplace due to the promise of greater efficiency. However, 68% of CIOs believe that business partners’ expectations for ROI from AI are frequently unrealistic, which causes them to be concerned.

Despite many business leaders across sales, marketing, service, and e-commerce claiming they have fully integrated AI into their operations, evidence suggests much of this adoption is unauthorised. This poses significant security risks, as employees may handle sensitive data using unsecured large language models (LLMs).

One CIO from the United States, representing the professional services industry, voiced concern, saying, “We don’t yet know how to manage AI within the broader employee base or control its governance.”

On the other hand, just 11% of CIOs — with their greater technical expertise and broader view of the organisation — say they’ve fully implemented AI — 18 to 38 percentage points less than their line of business counterparts.

“The adoption of mass market generative AI tools by workers is ushering a new era of “shadow AI” that highlights the urgency of implementing trusted tools,“ said Perez.

Data and Security Take Precedence in AI Preparations

The slow adoption of enterprise-wide AI strategies and tools can largely be attributed to the preparatory work CIOs need to complete first. With the technology’s transformative potential in mind, 67% of CIOs are taking a more measured approach to AI adoption than they have with other technologies. Security and data-related challenges remain their primary concerns.

The slow adoption of enterprise-wide AI strategies and tools can largely be attributed to the preparatory work CIOs need to complete first. With the technology’s transformative potential in mind, 67% of CIOs are taking a more measured approach to AI adoption than they have with other technologies. Security and data-related challenges remain their primary concerns.

While safety concerns can be addressed by selecting vendors with robust security infrastructure and ethics and credibility safeguards, ensuring that the data underpinning AI is recent, high-quality, and accessible can be a particularly daunting challenge that was underscored by several interviewees across industries.

• “The biggest barrier to AI implementation is data accessibility. Additionally, legacy systems and outdated infrastructure can hinder the effectiveness of AI.” — CIO, manufacturing industry, United States

• “We have lots of old data centres and legacy applications that don’t natively support data exchange.” — CIO, financial Services industry, Italy

• “Our data lacks a single source of truth, and it’s not timely.” — CIO, retail industry, India

To address these challenges, CIOs are dedicating four times as much of their budget to data initiatives as they are to AI. “Data initiatives aren’t new, but their urgency and prioritisation are unprecedented,” commented Perez. “Most companies I talk to are reallocating resources to ensure data is integrated, accessible, and relevant.”

Despite this, CIOs remain uncertain about how much of their budget to commit to AI in its early stages, with only 47% confident they have allocated sufficient funds to these initiatives.

CIOs Struggle with Prioritising AI Implementation

In addition to the challenge of establishing a robust data foundation, many CIOs are grappling with where and how to integrate AI into their broader organisational structure. The novelty of AI, combined with a lack of understanding or even fear of the technology across departments, complicates these efforts.

“There’s a lack of understanding of how AI works, leading to a lack of trust. So far, we lack credible use cases or studies to build confidence,” explained a CIO from the architecture, engineering, and construction industry in the UK.

Although AI use cases may be more apparent in some areas of the business, those departments are not always the most enthusiastic or prepared to leverage the technology. For instance, customer service is seen as having significant AI potential but is viewed as less enthusiastic about adoption. In contrast, marketing departments are eager to implement AI but often lack the necessary skills and preparation.

Some CIOs are adopting a more targeted approach, launching pilot projects to demonstrate AI’s effectiveness before advocating for broader adoption. Indeed, 75% of survey respondents described their organisations as being in the experimental stage of AI adoption.

One CIO from the technology industry in India shared, “We are experimenting by implementing AI in selected functions or departments and closely monitoring its usage, adoption, and benefits.”

CIOs Turn to Each Other for AI Knowledge

As CIOs focus on AI’s business implications, they are under what is arguably the most pressure of their careers to help define and execute strategies. AI is not only an unfamiliar technology, but one that is evolving at a remarkable pace. As a result, CIOs must come up to speed, and fast.

“There is insufficient AI expertise at all levels of the company, including at my level,” admitted a CIO from the financial services industry in the Netherlands.

However, CIOs recognise they are not alone in this knowledge gap. While 61% feel stakeholder expectations for their AI expertise are unrealistic, only 9% believe their peers have greater knowledge.

To build their understanding, CIOs are turning to familiar sources of information, including analyst firms, technology vendors, and media outlets. However, their peers in other companies remain the most trusted sources for AI advice, a trend that Salesforce’s Perez encourages.

“This is the perfect time for knowledge sharing,” Perez said. “Today’s CIOs are navigating one of the most significant technological shifts of their careers. By sharing our experiences and learnings, we can help build not only successful AI enterprises but a successful AI economy.”

More Information

Methodology:
Salesforce commissioned NewtonX to conduct a double-anonymous survey of 150 verified enterprise CIOs worldwide. The survey, carried out between 23 and 30 July 2024, received responses from 18 countries and 17 industries. An enterprise was defined as a company with at least 1,000 employees.