What is ROI of AI? Higher and lower than you might think

roi of ai


77% of companies are either using or exploring AI this year. With an adoption rate this high, expect winners and losers, especially regarding results and the ROI of AI.

Microsoft, IBM, and Deloitte have conducted studies to show the ROI of AI. Here’s what we conclude from the analyses of these leading companies. The ROI of AI is not a one-size-fits-all number. Average ROIs vary in these studies, each based on significant highs and lows of success.

However, in all studies, companies that identify an area that burdens the company, and often an area that no one wants to do, use AI and see the best results.

ROI of AI on the high side from Use Cases

  • $3.50 for every $1.00 invested: Microsoft commissioned a global study through IDC that surveyed over 2,000 business leaders. According to IDC’s research, for every $1 a company invests in AI, it realizes an average of $3.5 in return.
  • However, 5% of companies see $8.00 for every $1.00 invested. The same study shows that “leading adopters” see a higher return. For example, when AI is used to improve documentation at Atrium Health, 84% of physicians report improved documentation experience, and 68% have recognized improved expertise in providing care. Atrium Health first identified documentation as a burden to the business’s topline that AI could improve.

…And on the low side

  • 5.9% below the typical 10%: IBM studied 2,500 global executives in 34 business and technology roles across 16 countries from all major regions. The average ROI on enterprise-wide initiatives is just 5.9%, below the typical 10% cost of capital.
  • But best-in-class companies see a 13% ROI—twice the average of 5.9%. These companies first identified where AI can boost competitiveness, innovation, and performance. Moreover, they invested in talent and data capabilities and made AI part of the company culture with feedback loops in all departments.
  • 4.3% ROI, compared to only 0.2% for beginning companies. That’s what the Deloitte study shows. That’s lower than the IBM study.
  • Top performers: The Deloitte study showed that companies that use AI in these areas did the best: customer service and experience (74%), IT operations and infrastructure (69%), and planning and decision-making (66%).

Companies may be jumping into AI with wild expectations. However, these studies show that the winners are those focused on where it can be put to best use, sometimes in the unsexiest areas, and put metrics in place to measure success.

Do these studies help you with your company’s use of AI? Are you ready to measure AI’s ROI?

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