A whopping 3% of boardroom execs spy productivity and costs savings from AI

Three-quarters of corporate board members anticipate AI to boost productivity and reduce costs, yet only three percent of firms have achieved their objectives, according to Gartner researchers. The HR Symposium revealed that 38 percent of companies are overspending on AI, and 85 percent plan to increase expenditure next year. According to CV Viverito, a senior director analyst at Gartner's HR practice, organizations are not likely to achieve cost savings from AI at this stage.

The real opportunity lies in utilizing AI to perform tasks previously deemed impossible, such as reallocating employee time to new skills, outcomes, and growth sources. A majority of business leaders are out of sync with the broader organization regarding AI's value creation, which hinders transformation efforts and complicates workforce positioning for maximum returns.

Gartner advises organizations to prioritize AI on the most critical business work, with HR assisting executives in determining top priorities based on strategy. Companies should also distribute existing AI expertise throughout the business instead of waiting to hire scarce specialists and provide managers with flexibility to restructure work around the technology.

Currently, only about one in five employee hours are freed up by AI, enabling a shift towards more innovative work. Viverito notes that organizations are struggling with making this capacity usable and redirecting it to valuable tasks. To achieve AI's potential benefits, employees need the skills to take on higher-value, AI-enabled work, which involves investing in additional training.

Despite the challenges, the expectation is that companies will persevere and make necessary adjustments to their work processes and employee roles before experiencing tangible benefits from AI projects. A recent Forrester report predicts AI will constitute 20 percent of all business technology spend next year, but over half of CIOs are expected to fall short of their ROI targets for the technology.

Additionally, KPMG research from earlier this year revealed that most UK business leaders intend to maintain AI as a top spending priority, even if it does not yield immediate measurable returns, with 65 percent planning to continue investing regardless of short-term results. The longevity of this commitment remains uncertain. Private equity giant Apollo Global Management recently joined the chorus of concerns, highlighting that the "Magnificent Seven" tech giants are benefiting from AI investments, while the rest of the S&P 500 has not yet observed increased productivity growth due to AI.