A CIO’s Guide to the Fine Art of Failing with Flair
The latest MIT study has delivered what many CIOs suspected but hoped wasn’t true: 95% of enterprise AI pilots don’t produce measurable ROI. That’s not a rounding error. That’s a catastrophe dressed up as “innovation.”
And yet, in boardrooms everywhere, slide decks keep declaring “AI at Scale.” Meanwhile, what companies actually have is “AI in a Sandbox”—a glorified science fair project that can’t survive outside the lab.
CIO TL/DR
- Stop chasing shiny demos. The vendor’s AI “capability showcase” is like a Tinder profile photo—heavily filtered and definitely not representative of what you’ll get.
- Start where ROI hides. Back-office automation may not wow the board at Davos, but it actually pays for itself. Nobody brags about invoice reconciliation, but it saves real money.
- Build less, integrate more. Unless your team has solved world hunger, odds are your in-house AI will remain a science experiment. Buy what works, plug it in, and resist the urge to “optimize” it to death.
- Get your ‘in-house data’ in order: Integrating AI in existing systems which have been around since 1980, is not going to happen. You have to get your Data in house in order for AI to actually work.
Why Internal AI Projects Don’t Scale
Internal AI projects are like company intranets—everyone swears they’re critical, no one uses them, and the one time someone tries, it crashes under the weight of a PDF upload.
- Legacy Glue: Enterprises still expect AI to integrate with systems built when Y2K was the big tech risk. You can’t bolt ChatGPT onto a mainframe and expect transformation—you get a really expensive paperclip.
- Resource Roulette: One team gets a dozen data scientists. Another gets a single contractor who once took an online Python course. Both projects end up in the same “innovation showcase.”
- Pet Project Syndrome: CIOs greenlight pilots that excite executives, not ones that actually deliver ROI. (Spoiler: the chatbot answering HR vacation policy questions does not move the P&L.)
Why Vendors Fare Slightly Better (Emphasis on Slightly)
According to MIT, vendor-supplied solutions succeed twice as often as internal builds. Twice as often still means most fail—but hey, in corporate math, 10% ROI is considered “strategic.”
The truth is simple: vendors know how to ship a product. Enterprises know how to hold meetings about shipping a product. One is a business model. The other is a calendar invitation. We are not talking about your IT Services Vendors but SaaS, Cloud and Product Vendors.
The CFO Problem
CFOs keep signing off on AI pilots because they’re cheap compared to full programs. It’s corporate gambling with low-stakes chips. If it fails, you bury it under “innovation learnings.” If it succeeds, you can spend the next two years talking about “strategic scaling” while doing nothing.
Think of AI pilots as corporate slot machines: lots of flashing lights, occasional small wins, and the house (vendors, consultants, cloud providers) always gets paid.
Final Word
AI pilots aren’t failing because the tech doesn’t work. They’re failing because enterprises mistake a proof of concept for a proof of value.
As CIO, your role isn’t to host an innovation talent show—it’s to deliver systems that actually work beyond the sandbox. Until then, keep the crash helmets handy.
