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  Title	Turning AI From A Cost Into A Catalyst: Rethinking The CIO's Role In The AI Era
  ID	28870076
  External ID	d7018119780a43a8d98b711950afdb83
  Author	Peter Bendor-Samuel
  Published Date	Dec. 3, 2025, 4:18 a.m.
  Summary	CIOs believe AI has transformative potential, yet they are being asked to measure it using the same metrics as those used for cost-cutting initiatives. This creates a disconnect between how technology
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  URL	https://www.forbes.com/sites/peterbendorsamuel/2025/12/03/turning-ai-from-a-cost-into-a-catalyst-rethinking-the-cios-role-in-the-ai-era
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• Content Details

  Content ID	36496176
  Key	995892fe-77c3-4894-9fbc-4780eee579da
  Content	I recently attended a CIO conference that brought together technology leaders across industries to share what they're seeing and what's working in their organizations. Not surprisingly, the topic that dominated the conversation was artificial intelligence (AI). For the past two years, AI has been the defining discussion point in nearly every enterprise setting. During the conference, two strong themes stood out, and together, they highlight one of the most important transitions CIOs must make if they are to capture AI's full potential. First, nearly every CIO in the room was focused on the issues of AI security, governance, and responsible use. These executives have been diligent about establishing policies to ensure that AI is used safely, defining guardrails, and creating oversight mechanisms. Most organizations have made real progress here. But the conversation quickly turned to a second, more pressing issue: the struggle to demonstrate measurable ROI from AI investments. Many CIOs described having run dozens of proofs of concept (POCs) and experiments with AI tools. Yet when it came to hard returns, the evidence was far less convincing. The benefits were often indirect and intangible. Productivity gains were visible, but they didn't translate into headcount reductions or cost savings. Quality improved, but not enough to move the needle on financial performance. Employees liked using the new tools, but at the enterprise level, the bottom-line impact was hard to measure. There was a lengthy discussion as to whether they can even apply ROI to IT investments. CIOs believe AI has transformative potential, yet they are being asked to measure it using the same metrics as those used for cost-cutting initiatives. This creates a disconnect between how technology is funded and what the business expects it to deliver. Why the Traditional IT Budget Model No Longer Works in the Age of AI That disconnect has roots in how most organizations still manage their technology budgets. In nearly every company, the CIO is allocated a fixed percentage of revenue, typically in the range of 3 - 5%, and is expected to run the IT function within that limit. Within this structure, the CIO's primary responsibility is to optimize costs: spend wisely, manage vendors efficiently, and find savings where possible. They are constantly under pressure from CFOs to "do more with less." If they want to fund something new, such as an AI initiative, they are often asked to cut costs from current projects. It's a structure that reinforces the perception of IT as a cost center rather than a driver of digital transformation. This mindset is evident across the market today. Enterprises are consolidating their software portfolios, reducing the number of vendors, and renegotiating contracts to reduce costs. In services, they are rationalizing providers and using scale to demand lower pricing. The overarching goal is to free up capital to invest elsewhere, but ironically, "elsewhere" often means yet another round of incremental technology upgrades. It's an efficient system, but it limits ambition. You can't transform your business while treating the engine of that transformation as an expense line to be minimized. CIOs Can't Deliver Transformation While Being Treated as a Cost Line And that brings us to where many organizations now find themselves: an inflection point. Boards and CEOs are asking their technology leaders to drive transformation, to modernize the business, improve competitiveness, and create new value. But this expectation inherently requires more spending, not less. Transformation doesn't come from squeezing the existing budget; it comes from reimagining how technology creates value. As we move into an AI-enabled future, CIOs find themselves in a challenging position. They must lead the company through this transition, but are still measured as cost managers. The fundamental challenge for the CIO community today is how to evolve from cost controller to value creator. There's strong conviction that AI will be transformational. Most executives I spoke with believe it should unlock dramatic productivity gains, new revenue streams, and expanded capabilities. However, they also recognize that these outcomes necessitate a significantly different approach to planning, funding, and integrating technology into the business. Rethinking the Operating Model, Not Just the Tech Stack This is where many organizations are getting stuck. They are attempting to achieve transformation by adding new technologies to existing processes. It's the classic "bolt-on" approach, and one that delivers incremental value but not the kind of step-change improvement that boards and shareholders expect. We've seen this before with other waves of innovation. Cloud computing delivered enormous efficiency, but true competitive differentiation came only when companies changed their operating models to take advantage of it. AI follows a similar trajectory, but the scale of change it demands is even greater. Adding AI to existing systems doesn't make them transformational; it makes them slightly better. The real unlock happens when organizations redesign their processes and operating models around what AI makes possible. That's not an IT problem. That's a business problem. It requires finance, operations, HR, marketing, and every other function to reimagine how they create value in a digital environment. The CIO's role, therefore, must evolve. It's no longer just about managing technology delivery. It's about shepherding enterprise-wide operating model change and partnering with leaders to reengineer how work gets done and how value is delivered. A New ROI Mindset Boards and CEOs are prepared to invest in AI, but they expect clarity and confidence in the outcomes. This requires rethinking how ROI from AI is defined and measured. It's tempting to think of business models in simple terms: people, process, and technology. But in practice, they are much more complex, they include governance, pricing philosophy, decision rights, and cultural norms. They include stakeholder management, governance structures, pricing philosophy, decision rights, and even the cultural norms that influence how work gets done. Transforming these dimensions takes time, and it's where AI's real value will emerge. Take finance and accounting as an example. Many organizations are applying AI to automate reconciliation or forecasting. That's a good start, but the bigger opportunity lies in rethinking the function itself, such as how it collaborates with other parts of the enterprise, how it interacts with customers and suppliers, and how it uses data to drive strategic decision-making. What we're talking about now is a new investment philosophy. Are you thinking about technology as an investment that generates a return, or are you thinking about it as a cost center in which to squeeze and take money out of and allocate against priorities? When organizations begin to view their operating model through that broader lens, AI becomes more than a tool; it becomes a catalyst for reinvention. Turning AI and Technology into Strategic Investments The path forward requires a new mindset. There will always be a portion of IT that must operate with cost discipline, the "hygiene" layer that keeps systems secure, compliant, and efficient. But above that layer sits an increasingly strategic capability: technology as an engine of innovation and growth. To unlock that potential, CIOs and business leaders must collaborate on a shared investment agenda. That means accepting that technology spending will rise, not because IT is inefficient, but because the enterprise is becoming more digital, more intelligent, and more integrated. It also means shifting the internal narrative. Technology is not a cost of doing business; it is the business. The companies that internalize this shift will be the ones that define the next era of performance. The transition won't happen overnight. It requires new governance models, new funding mechanisms, and most importantly, a change in mindset from viewing IT as a back-office function to seeing it as a growth partner and strategic enabler. But I believe the organizations that make this shift will be the ones that turn AI from a cost into a catalyst.
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  Publisher Name	Forbes (#1659)
  Publisher URL	https://www.forbes.com
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  Trust Flow Score	85
  Citation Flow Score	69

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  Data Source Name	NewsCatcher (#303)
  Data Source Type	news
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