CIOs view cost management as possible AI value killer

CIOs feeling the pressure to deploy successful AI projects have a second concern: that they don’t have the money to pull it off.

Ninety percent of CIOs recently surveyed by Gartner say that managing AI costs is limiting their ability to get of scaling generative AI, they could miscalculate by 500% to 1,000%, says Hung LeHong, an analyst focused on executive leadership for digital business at Gartner. Depending on the AI project, a mistake of that magnitude could cost millions of dollars.

In many cases, using an LLM for simple AI tasks, such as transcribing and translating, can be expensive when cheaper tools are available, LeHong said during a to deploy and create value from AI, puts CIOs and other IT leaders in a difficult position, says Kevin Miller, CTO of industrial AI company IFS. In a recent , Miller says.

The cost “just compounds exponentially,” he adds. “It really has the potential to go off the rails.”

In many cases, small wins that show quick value may be a better bet than huge, high-risk projects, Miller advises. He also recommends that CIOs interact with peer groups to learn about AI projects that have been successful.

“We can learn from others that have gone through this already,” he says. “How do I make this the most effective, meeting the demands of the board and the C-levels that I’m working with, by interacting with those peers to find out what worked and what didn’t and where they got the most value?”

Cost is certainly a concern when CIOs think about deploying gen AI, says Yuval Perlov, CTO at K2view, a data management vendor. In its , and in other cases, CIOs will start small with easy-to-deploy projects that generate immediate wins to demonstrate to CEOs and board members.

Instead of creating a customer chatbot that answers 200 questions, start with one that answers the 10 most frequently asked questions, then offload the more uncommon questions to human agents, he suggests.

“Start small and deep and not wide and shallow, or do one thing or two things, do them very well to the point where you can roll it out and get value out of it,” Perlov says.

Doing so can help ensure costs are manageable and the solution will scale.