Here’s what CIOs must establish to drive GenAI digital transformation rather than chasing productivity.

“Digital transformation is not just about operational cost efficiencies. Beware of competitors who outpace your business with digital services, better customer experiences, and dynamic business models. They will disrupt stagnant companies solely focused on driving down costs.”

I wrote that in Chapter 10 of Digital Trailblazer, published before the gen AI era. The chapter distinguished digital transformation from strategic planning and crisis management. CIOs weren’t seeing the differences at the time. I shared seven key principles in the chapter that should be applied to GenAI digital transformation.

Flash forward, and some CIOs are repeating mistakes around AI. Too many enterprises are stuck in the POC abyss, and others remain focused only on productivity improvements. I recommend digital transformation initiative OKRs/KPIs focus on growth, efficiency, customer + employee experiences, quality, and risk reduction. The digital strategy should also deliver velocity increases in time to market, time to data, and time to organizational change.  

I’ve shared some of my recommendations on AI use cases. See AI in Action, which has eight transformation use cases and six Industry 5.0 use cases. Review my tips on finding AI business value. CIOs should place their AI bets focus on nut-and-bolt use cases in marketing and customer support. Have a look at these 20 GenAI predictions will take you into future use cases.

GenAI Digital Transformation: More growth, smarter POCs

Going one step further, here are seven recommendations from CIOs on GenAI digital transformation.

1. Quantify and communicate AI’s business impacts

“We’re now a few years into the generative AI boom, and it’s fair to say that the technology hasn’t yet lived up to its hype,” says Eoin Hinchy, CEO  of Tines. “Companies need hard ROI metrics to prove AI’s value, and CIOs and CTOs will demand concrete metrics before approving new AI investments. Companies showing hard data on cost savings or productivity gains are the ones that will actually see AI succeed in their business.”

MPOV: Find real cost savings because productivity gains often lead to a discussion around cutting headcount. CIOs must beware of bumbling into the productivity trap. Look for more expansive GenAI use cases and convey AI’s business value, not just its ROI.

2. Build trust in GenAI-enabled businesses

“CIOs are more than technology leaders, and they must build trust in technology-enabled businesses,” says Balakrishna (Bali) D.R., global head for AI and automation at Infosys. “Since the technology choices leaders make today will shape their organization’s resilience tomorrow, they must lead with foresight, integrity, and responsibility. Secure, scalable, and responsible systems are the foundation of long-term success — a leader’s ability to balance agility with accountability will define their impact.”

MPOV: Trust in AI starts with how the CIO and CDO must take control of their data.

3. Translate emerging AI capabilities into investment decisions

“CIOs’ unique ability to translate technological capabilities into business outcomes will make them indispensable in board-level decisions, directly shaping company strategy and driving digital-first transformations across all operations,” says Eric Johnson, CIO at PagerDuty. “CIOs will lead advisory related to AI and collaborate with legal, compliance, security, HR, and the C-suite. They’ll spearhead digital innovation, orchestrating the integration of AI, quantum computing, and advanced analytics to forge new business models and revenue streams.”

MPOV: Quantum computing is advancing faster than most leaders realize. Listen to our recent Coffee with Digital Trailblazers on Demystifying Quantum Computing: What Digital Leaders Need to Know.

4. Deliver collaborative technology experiences to employees

 “CIOs should focus on two distinct technology user groups: traditional end users and those who are running and managing the service,” says Snorre Kjesbu, SVP and GM of collaboration employee experience at Cisco. “Focus on ensuring end users have seamless collaboration experiences, regardless of their location or the tools they choose to leverage, be it whiteboarding, messaging, meetings, calling, etc. CIOs should equip IT teams with advanced management tools and comprehensive workplace analytics to identify and resolve issues quickly and inform and affirm their workplace transformation decisions.”

MPOV: CIOs can drive amazing employee experiences in the GenAI era. Champion hybrid work, evaluate HR and IT service management AI agents, and transform the developer experience.

5. Redesign workflow experiences with agentic AI

“CIOs need to move beyond experimenting with general-purpose AI and generic use cases because the real opportunity lies in focusing on agentic AI’s autonomous systems designed to solve specific, high-value business challenges,” says Nick Colisto, NinjaOne CxO Advisory Board Member and CIO at Avery Dennison. “Agentic AI goes beyond insights and starts driving actions, automating complex decisions and workflows. It’s time for us to shift from tinkering with AI to implementing solutions that deliver real, scalable impact for the business.”

MPOV: The Deloitte 2024 year-end report states, “The lion’s share of organizations are currently pursuing 20 or fewer GenAI experiments or proofs of concept (POCs). They expect to fully scale 10%–30% of those experiments in the next three to six months.” While POCs are a key part of how organizations learn about AI capabilities, organizations have to be smarter about which AI initiatives to experiment with and aim for more product use cases. Agentic AI will transform the future of work, and my recommendations for developing AI agents.

6. Connect physical and digital experiences with AI at the edge

“CIOs should strongly consider vision AI at the edge for valuable business insights at a fraction of the time, money, and resources to deploy at a scale for true transformation,” says Eita Yanagisawa, senior GM, AITRIOS at Sony Semiconductor Solutions. “Embedded vision AI processing eliminates the need for an excess of video data, reducing overall data footprints and associated cloud costs.”

MPOV: AI/VR + AI experiences in manufacturing, construction, and retail may be one of the most exciting. Expect these use cases to mature over the next few years.

7. Drive a growth mindset to transform customer experiences

“An important consideration will be how to accelerate an organization’s current digital transformation and system integrations with AI to have the necessary core modernization in place for growth,” says Yang S Shim, technology consulting leader at EY Americas. “AI is transforming how businesses engage with customers, and to maximize its potential, CIOs should prioritize integrating AI with emerging technologies such as IoT, digital twins, edge computing, and 5G.”

MPOV: Digital twins backed by 5G will be game-changing digital transformation investments for healthcare and government applications.

Learn more about GenAI Digital Transformation

I recently completed the scripts for an upcoming LinkedIn Learning course on Digital Transformation in the GenAI era. I share a key lesson for StarCIO Digital Trailblazers seeking transformational AI. Use workflow improvements as the organizational view, but before investing in them, identify the ones that can drive growth and improve customer experiences.