Forrester Helps Companies Question AI ROI
Forrester reports that companies struggle to justify AI spending, and a clear strategy is key to resolving this issue. A well-planned AI strategy can help companies measure the value of their investments.
Original reporting · forrester.com
Original: “Questioning Your AI ROI? Start With Your AI Strategy”
Read “Questioning Your AI ROI? Start With Your AI Strategy” at Forrester →
How this was written. Voyager Commercial wrote this article with a language model from Forrester’s reporting (model: @cf/meta/llama-3.3-70b-instruct-fp8-fast); it describes that reporting rather than adding to it. The original, linked above, is the full story.
Key points from Forrester’s report
- Companies struggle to justify AI spending due to a lack of clear strategy
- A well-defined AI strategy is key to measuring ROI and achieving business goals
- CEO ownership is critical to a successful AI strategy
- The AI Value Matrix provides a framework for measuring the value of AI investments
- A comprehensive AI strategy includes setting a clear vision, creating an action plan, and establishing principles and policies
Companies are increasingly questioning the return on investment of their AI initiatives, according to Forrester. This concern is particularly prevalent among IT departments, which are often responsible for footing the bill for AI-related expenses. As AI usage grows, IT leaders are under pressure to justify the costs.
Forrester's research suggests that a lack of clear strategy is at the heart of many companies' AI ROI challenges. Without a well-defined plan, IT departments struggle to prove the value of their AI investments. This can lead to difficulties in measuring the impact of AI on workforce productivity and individual worker efficiency.
A new report from Forrester, titled Your Enterprise AI Strategy, aims to address these challenges. The report is the result of a nine-month collaboration with over 40 leaders from 25 organizations, as well as hundreds of client engagements. It provides a framework for companies to develop a comprehensive AI strategy.
The report introduces a three-part model for developing an AI strategy, which includes setting a clear vision, creating an action plan, and establishing principles and policies. A well-defined vision outlines why and where a company can benefit from AI, and sets specific goals and key performance indicators. An action plan commits to specific investments and timelines, while principles and policies guide how the organization will behave and make decisions.
CEO ownership is critical to a successful AI strategy, as it enables companies to make tough decisions about which investments to prioritize and which to deprioritize. When the CEO is invested in the strategy, other executives are more likely to follow suit. This can help to ensure that AI investments are aligned with business goals and that the company is able to measure their impact effectively.
Forrester also provides a framework for measuring the value of AI investments, known as the AI Value Matrix. This matrix helps companies to identify the types of value that AI can deliver, including productivity, engagement, and transformational value. By understanding the types of value that AI can deliver, companies can develop a more effective strategy for measuring and achieving ROI.
Questions and answers
Why are companies struggling to justify AI spending?
Companies are struggling to justify AI spending due to a lack of clear strategy and difficulty in measuring ROI.
What is the role of the CEO in developing an AI strategy?
The CEO plays a critical role in developing an AI strategy, as they must own the strategy and make tough decisions about which investments to prioritize.
How can companies measure the value of their AI investments?
Companies can use the AI Value Matrix to identify the types of value that AI can deliver, and develop a strategy for measuring and achieving ROI.
