According to a recent “C(AI)O Report: Big Impact, Big Rewards: Meet the CFOs Focused on GenAI,” six in ten CFOs say generative AI (GenAI) is the biggest innovation of our time. Instead of just “one of the biggest innovations,” of the best.
The report, based on a survey conducted by PYMNTS Intelligence of 60 CFOs representing U.S. companies with annual revenues of more than $1 billion, explores their companies’ use of rapidly evolving GenAI applications.
Notably, while 100% of surveyed CFOs said their companies use GenAI, how it’s used varies widely across companies. All CFOs surveyed said they use the technology for at least three internal functions. However, in most cases, these use cases were what the researchers classified as routine and low-risk, such as summarizing information and accessing catalogs.
However, we also found that companies that use GenAI in a highly strategic and effective way get the greatest benefits from their investment. As a result, these companies are the most likely to report a positive return on their GenAI investment.
Only about 30% of surveyed companies have deployed GenAI applications in a strategic way to maximize their benefits, such as monitoring multiple processes, evaluating based on diverse inputs, and creating new content.
It’s worth noting, however, that companies using GenAI applications in highly impactful ways weren’t necessarily those that made the larger initial investments: In fact, companies with higher overall impact scores (i.e., those using more strategic, complex GenAI applications) invested 25% less in the technology than companies using GenAI for non-strategic applications.
More use of GenAI applications leads to better ROI, but it’s also important to note that companies that used GenAI for more applications were doing so strategically. As mentioned earlier, companies use GenAI for an average of three everyday applications. Companies that reported a positive ROI use GenAI for an average of 5.6 applications.
According to a PYMNTS Intelligence study, 50% of companies using five or more GenAI applications reported a very high ROI, but only 6.3% of surveyed companies using fewer than five applications said they experienced a very high ROI.
Whether companies decide their initial investment in GenAI was a good use of money will likely determine their subsequent investments in the technology, and as this chart, based on exclusive PYMNTS Intelligence data not included in our initial report, shows, many companies are now adjusting their AI spending.
This chart suggests that the right range for investing in GenAI may be between $1 million and $5 million, as 55% of companies that have invested are keeping their investment flat. Meanwhile, almost half of the companies that originally invested $1 million in the technology plan to increase their investment in the next 12 months, and three-quarters of the companies that invested more than $5 million in the technology are reducing their investment.
These findings suggest that simply throwing money at GenAI won’t be the answer: After all, the companies most impacted by AI were also the ones that invested 25% less in the technology than those who were using GenAI for less strategic purposes.
The real lesson may be that while how much money a company spends on GenAI matters, so too does the strategic deployment of the technology post-purchase.
