According to our recent “C(AI)O Report: High Impact, Big Reward: Meet the GenAI-Focused CFO,” six in 10 CFOs say generative AI (GenAI) is the greatest innovation of our time. Not “one of the greatest;” but the greatest.
The report, which is based on surveys PYMNTS Intelligence conducted with 60 CFOs representing U.S. companies that earn at least $1 billion in annual revenue, examines the rapidly-evolving enterprise use of GenAI applications.
Significantly, 100% of the CFOs we surveyed said their organizations are now using GenAI, but how those companies use it varies widely. All that were surveyed said they used the technology for at least three internal functions. However, in most cases, we found those use cases were what our researchers categorized as routine and low-risk, such as summarizing information or accessing a catalog.
On the other hand, we found that firms using GenAI in highly strategic and impactful ways were also reaping the most benefits from their investments. As a result, they were most likely to report a positive return on their investment in GenAI.
Only about 30% of surveyed enterprises are taking full advantage of their GenAI applications by deploying them in strategic ways, such as monitoring multiple processes, making assessments based on diverse inputs or creating new content.
What is noteworthy, though, is that the firms using GenAI applications in highly impactful ways had not necessarily invested more initially. In fact, those firms with a high total impact score — meaning they used more strategic and complex GenAI applications — actually invested 25% less in the technology than those using GenAI for non-strategic applications.
While using more GenAI applications aligns with positive ROI, it’s also important to note that those firms that used it for more applications also did so strategically. As mentioned, companies use GenAI for an average of three routine applications; firms that reported a positive ROI used GenAI for an average of 5.6 applications.
PYMNTS Intelligence found that 50% of firms using more than five GenAI applications reported a very positive ROI; however, among surveyed firms that use fewer than five applications, only 6.3% said they experienced a very positive ROI.
Whether a firm believes its initial investment in GenAI was a good use of its funds or not will likely shape subsequent investments in the technology. And, as the chart — which is based on exclusive PYMNTS Intelligence data not included in our original report — illustrates, a high percentage of companies are now adjusting their AI spend.
The chart suggests the spending sweet spot for GenAI might be between $1 million and $5 million, since 55% of the companies that did so are holding steady. Meanwhile, nearly half of companies that initially invested $1 million in the technology plan to increase their investment in the next 12 months, while three-fourths of those that spent more than $5 million on the technology are scaling back.
These findings indicate that simply investing money in GenAI isn’t the answer; after all, the firms that saw the greatest impact from AI were also the ones that invested 25% less in the technology than those that used GenAI for less strategic applications.
The real takeaway may be that how much a company spends on GenAI is important, but so is strategic deployment of the technology after it’s been purchased.
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