Do you need a Chief AI Officer?

June 13, 2024
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Helen Fleming, Director at Harvey Nash, part of Nash Squared, looks at whether now is the time to start hiring your CAIO. A version of this article first appeared on Management Today.

With AI so high on everyone’s agenda, it’s a question I’m increasingly being asked by clients: do we need to appoint a Chief AI Officer (CAIO)?

The first thing to say is that, if you haven’t got one – you haven’t fallen behind the curve. To date, only a fraction of organisations have a CAIO. Our Digital Leadership Report Pulse survey of tech leaders finds that just 5% of organisations currently have one. A further 7% are planning to appoint one. So, while we expect around 1 in 10 organisations to have a CAIO in the near future, 85% say it’s not in their plans.

Yes, the Big Tech giants have appointed them. The US government has mandated federal agencies to appoint one. They are beginning to appear, in small numbers, in certain sectors and amongst AI-focused start-ups and scale-ups where AI is at the core of who they are. But in the main, we are at the very early stages and for most businesses, the notion of a CAIO is an interesting talking point rather than an active agenda item.

But will it stay that way? I expect not. AI is here to stay and it’s only going to get bigger. The capabilities of what AI and Gen AI can do are going to grow. More and more organisations may see the need to appoint someone who can take ownership and drive a coherent AI strategy aligned with the business strategy. In particular, if there is a breakthrough leap in a particular use case for AI, the rise of the CAIO could become supercharged.

Is there a business case?

The business case for having a CAIO will vary from organisation to organisation, depending on its own unique profile and ambitions. But any case must be anchored around the potential for AI to drive tangible commercial and business returns – such as measurable operational efficiencies, product/service enhancements, uplifts in staff productivity, and improved customer experience or engagement.

Much of this in turn depends on the degree to which the business is data-driven. The more data a business generates, gathers and leverages, the higher the potential for AI. Data maturity is a key consideration. If an organisation doesn’t have a mature data management framework, a push into AI is likely to be premature.

The case for a CAIO is also likely to be higher in organisations with large technology teams and multiple simultaneous programmes of work. Here, a CAIO could be the bridge between AI activity, other technology programmes, and business strategy. Working closely with other senior technology leaders, the CAIO can channel AI efforts in a way that they align and integrate with other key initiatives.

In smaller technology teams, there may not be the volume of AI work to warrant a CAIO and it is more likely that an existing senior postholder (Chief Data Officer, for example) can ensure programmes of work are joined up.

There are certain sectors where I believe the case for a CAIO is strongest. Technology itself is a prime candidate, from Big Tech down to start-ups and scale-ups with a big idea. Other sectors include Financial Services and Telecommunications, where there are high volumes of data and good data maturity. Also Retail, given the amount of data that is generated through customer purchases and interactions. Legal is another sector with high potential, where AI can play a powerful role in the discovery process for collating and presenting evidence and in case management. Healthcare could also be one for the future, given the huge potential of AI in areas like medical imaging analysis/diagnosis and personalised treatment plans.

Remit: Innovation driver

The key purpose of a CAIO is to move AI activity so that it’s not just experimentation with a collection of clever tools, but becomes a defined, measurable, business-led strategy. This may also include creating a company-wide AI policy with risk management guidelines on usage, privacy/security issues and sign-off protocols.

While we have seen the number of organisations with a policy in place double in just six months, our Pulse survey found that 58% still don’t have an AI policy so this is an area where more action is needed.

More broadly, a CAIO will act as an innovation driver. Simply having a CAIO is going to prompt more focused and concerted efforts around AI, finding new use cases and applications within the business, and innovating how things are done. There is an element of chicken and egg in this. But those with a CAIO are more likely to innovate in AI and find ways to create competitive advantage.

Skillset and seniority

What sort of people could become CAIO? From what I’ve seen to date, CAIOs tend to be exceptionally strong technically, often with a background in data. They may well have a Computer Science degree or similar, a track record in working in data analytics and/or machine learning, and experience in leading teams, possibly making it to Chief Data Officer already. They are intellectually curious, multi-talented, have genuine business acumen, and are passionate about technology itself.

In terms of reporting structure and seniority, the CAIO is likely to sit in the second rung of technology leadership, i.e. one rung below the CIO or CTO. They will be a peer, in all likelihood, to the Chief Data Officer. In some instances, we may see (and have already seen) a combining of those two roles, creating a CDAIO.

Will it last?

It is possible that the CAIO role will prove transitory – helping connect AI to business strategy, establishing the right competencies, mechanisms and controls for it to flourish, and then fading out once this is fulfilled. Ownership and management of AI would become dispersed across the tech team as simply part of how work is done. It could be similar to the pattern we have seen with Chief Digital Officers – which arose during the explosion in cloud computing and data, creating a need to have someone who can bring this all together to deliver a new customer experience.

For many, this first phase of 'digital transformation' is now complete and the hiring of CDOs now appears to have levelled out as the role and its skills have become disseminated into the business, in particular into the CIO / CTO role.

A lot depends on where AI takes us. In that sense, it is the technology that will decide whether we need CAIOs, not humans! But my view is that we will see CAIOs steadily multiplying. If AI starts really living up to its hype, the growth in CAIOs could be faster than anything we’ve seen before. AI is opening up new worlds and business possibilities – doesn’t it follow that we need a new figurehead to lead the charge and take us through the door?

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