Suits won't quit AI spending, even if they can't prove it's working
Forget about investment value! Call it a 'strategic enabler for enterprise‑wide transformation,' says KPMG
Most UK business leaders will keep AI at the top of their spending priorities, with 65 percent planning to maintain investment whether they see immediate measurable returns or not.
As debate rages about the need for proving return on investment (ROI) before tech departments open their wallets to buy AI platforms, agents, or enterprise software add-ons, research from KPMG shows the notion is sliding down the priority list for business leaders.
In a survey of 2,110 business leaders globally, the consultancy found 70 percent of UK business leaders think AI will remain high on their spending agendas even in the face of an economic downturn. Ninety-four percent plan to use AI agents in their businesses, but their experience varies.
The poll, conducted in February and March, found ROI is not a primary driver of AI investment for many organizations, although they can measure it in specific areas. Most said they could measure ROI in productivity (76 percent), quality and performance of work (71 percent), speed and accuracy of decision-making (67 percent), and profitability (64 percent).
However, just 14 percent were confident in measuring business value from improved analytics used by the C-suite for business decision-making.
Leanne Allen, head of AI at KPMG, said businesses are changing the way they see AI investment. "This shift in mindset from viewing AI as something that must deliver an immediate return to one that sees AI as a long-term investment, recognizing it as a strategic enabler for enterprise‑wide transformation, is an important milestone."
Some techies running the department for their employer might be forgiven for thinking they are getting mixed messages.
Software vendors and cloud providers are currently bearing the burden of the expected increase in AI spending this year, with investment forecast to hit $2.52 trillion for 2026, according to Gartner. In the long run, however, enterprise customers and consumers will pay one way or the other.
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At the enterprise level, John-David Lovelock, distinguished VP analyst at Gartner, told The Register in January that the conversation had gone from some board-appointed special group saying "get me something AI" to a more cautious approach.
"We're starting to see the end of the investment line. We had a thousand flowers blooming, now it's time to prune the garden. We are getting to the point where we go from 'that was a great idea' to 'where's my revenue?' That's a normal part of any new technology," he said.
KPMG's findings come against a backdrop of companies struggling to justify AI spending. In February, a survey of almost 6,000 corporate execs across the US, UK, Germany, and Australia found that more than 80 percent detect no discernible impact from AI on either employment or productivity, even though 69 percent of businesses currently use some form of AI.
A Gartner report last week found only 28 percent of use cases for AI in technology infrastructure fully succeed and offer ROI.
According to a Harris Poll study commissioned by Dataiku, 98 percent of tech leaders said they were coming under increasing pressure from the board to demonstrate ROI, while 71 percent of the CIOs surveyed believed their AI budget would likely face cuts or a freeze if targets were not met by the end of the first half of this year. ®
