The hype of AI has led to AI “champions”, AI “task forces”, and AI “working groups” at any given company, but we are seeing organizations pivot from aimless AI tinkering to driving real impact.
Sam Altman has said we will see a billion dollar company run by one person in our lifetimes. Whether or not we do (I think we will), this hammers home the idea that 1) AI’s flexibility means it can support any part of the business and 2) benchmarks for ROI are going to change radically as AI native systems emerge.
In this blog, we’ll break down how you can calculate the ROI of AI Strategy with a simple, actionable approach to get ahead of the crowd. And how you might maximize that return.
Before diving into the details, let’s establish two things:
That is not new. What has changed is the flexibility of the technology we are looking to apply.
That is, AI can support almost any process, function, business unit, or customer interaction. We’ve found in the past 2 years that answering the questions of where and how to start are deceptively tricky.
To simplify, think of AI ROI in three primary buckets:
These also are not new. Any investment will probably fall into one of these categories. This is the best frame to figure out where to go deeper.
Organizations making build or buy decisions typically fall into two camps: either they have one clear AI use case or they’re overwhelmed by too many possibilities.
If you have a single use case: focus on defining one key KPI that aligns with your strategic objectives. If you’re working on AI-powered customer support, for instance, your KPI might be reduced response time or decreased customer churn. Simplifying your objective helps tell your story to stakeholders and streamline execution.
If you are comparing multiple use cases: use the three ROI buckets (cost efficiency, revenue optimization, new revenue streams) to categorize and compare your use cases, apples to apples. This helps prioritize investments with the highest impact. If you really have a lot of use cases, you can start with a simple 1-5 score in each bucket to prioritize and then go deeper.
AI-driven transformation doesn’t happen all at once. AI adoption will unfold in three waves, much like previous revolutionary technologies such as electricity, digital, or mobile:
It’s important to understand that success in the first wave doesn’t guarantee success in the third. Businesses must plan their AI strategies with a vision for all three waves, ensuring that investments made today help build towards transformative opportunities tomorrow. We advocate for a portfolio approach: invest across all three waves, with a clear vision for the third wave in mind.
Investment in a given wave will naturally have different impacts on returns.
The Three Waves Framework provides a strategic roadmap for growth, ensuring organizations capitalize on immediate opportunities while building toward transformative, long-term change. Its principles are universal, applying to technology, business models, and industry evolution.
One of the biggest missed opportunities in AI strategy is failing to connect use cases for systemic returns. Let’s look at an example: let’s say a company implements three AI solutions:
Individually, each offers a return. But when interconnected, they create contagious ROI—customer insights from support feed into trend prediction, which informs better product development, leading to improved sales. The more these AI solutions talk to each other, the more improving one will have compounding, contagious return.
There’s no wrong way to start. Wave 1 improvements reduce costs, but these are the easiest to find and will be adopted quickly. Wave 2 makes for better customer experiences, raising revenue with repeat or new customers from differentiating features. Wave 3 starts to emerge when you have a synergistic system of AI tools that complement each other, adding to the return each provides.
To ensure AI delivers real ROI, assess potential projects through this lens:
Bonus points if your solution also:
AI is one of the most flexible tools we’ve ever had. But flexibility without focus leads to inefficiency. By categorizing use cases, aligning investments to the right wave of AI maturity, and stacking solutions for interconnected value, businesses can unlock real, measurable returns.
Keen to dive deeper? Explore how we work with AI Strategy
Associate Director, BOI (Board of Innovation)
[email protected]
With a varied and entrepreneurial background, Christian focuses on unlocking hidden cross-functional value, and spicy insights that lead to leapfrog growth.
