The challenge in proving AI value
AI can impact everything from productivity and profit levels to less immediately quantifiable areas like enhanced decision making and CX. Every measurable improvement in business outcomes is a return on investment. You just have to be able to measure it and that, as we’ll see, can be a challenge
There’ve been growing concerns that, for many businesses, tangible AI benefits aren’t living up to their great expectations. Nearly 80% of companies using generative AI (GenAI) are yet to see a bottom-line return, as reported by McKinsey. Further alarm bells sounded following the release of MIT’s study ‘The GenAI Divide: State of AI in Business 2025’ which claims only 5% of enterprise generative AI projects succeed. Success, in this instance, is defined as showing a financial return within six months.
These studies use narrow, short-term parameters for AI’s impact. For example in the MIT study success is defined as showing a financial return within six months. So organizations should be wary of abandoning programs before they’ve had the chance to deliver. But as well as exposing short-term AI underperformance, these reports highlight another important point: legacy ROI benchmarks aren’t necessarily a great fit for AI tools.
AI is transforming how work gets done. How we measure AI success must transform right alongside. But there are many factors that make proving AI value a significant challenge. These include:
Inconsistent success criteria
With AI tools and solutions evolving so rapidly (constantly reframing expectations) businesses can struggle to agree on what AI ROI success looks like.
Benefits beyond the P&L
As indicated earlier, while positive ROI impact is trackable across some KPIs, AI’s impact doesn’t end there. It can enhance less measurable outcomes such as decision making or customer experience, which take far longer to appear on the P&L.
Slowburn returns
While an enterprise’s AI transformation may require significant upfront investment, return on that investment is far from immediate. ROI on AI use cases typically takes between two and four years, according to one Deloitte study.
The attribution problem
AI implementation often takes place alongside other business improvement initiatives, making it hard to isolate AI’s specific ROI impact.
Lack of a proper data foundation
Siloed, inaccurate, or incomplete business data can make accurate AI ROI attribution next to impossible, because:
- AI initiatives get stuck in fixing data issues rather than enhancing processes
- What looks like AI underperformance is often a data quality problem in disguise – the AI isn’t failing, the underlying data is.
These are all challenges that enterprises must overcome to incorporate the AI accountability and measurement element essential to an effective AI investment strategy. Any such strategy must have value attribution at its core – pinpointing if, where, how, and to what extent AI performance justifies existing and future investment.