Is it time to appoint a Chief AI Officer? Not so fast say experts

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Sheryl Estrada is a senior

Good morning. Many CFOs are exploring use cases for generative AI. But some companies have decided to create a new senior management position with enterprise-wide oversight of AI activities—a chief AI officer (CAIO). Is that necessary?

“Do You Really Need a Chief AI Officer?” is the title of an interesting new report in MIT Sloan Management Review that delves into this topic. The

But there are cons as well. For example, adding the position of CAIO can create tension in the existing C-suite with the CIO, CTO, chief operating officer, or the chief digital or chief data officer, according to the report. Another obstacle: “CAIOs could be tempted to pursue AI for the sake of AI rather than in the service of business objectives,” the

I asked a coauthor of the report, Michael Wade, TONOMUS Professor of Strategy and Digital at the International Institute for Management Development, how a company can effectively assess the need to create this C-suite role. There are a number of factors, like current AI competence, he said. However, there is one particularly important factor.  

“In organizations where AI can have a major impact on competitiveness, the scales may be tipped in favor of appointing a CAIO,” Wade said. For example, companies in the tech or financial services sectors, “where data management and insights are key

How does he think a CAIO could work in tandem with a CFO to implement AI strategy across the organization? Wade referred to the importance of not getting “caught up in the hype and jumping on AI for the sake of AI.” In terms of ROI expectations, the CAIO should be held to the same standards as other parts of the organization, he said. “CFOs can work with CAIOs to set financial goals for AI projects, and where necessary, hold them accountable,” Wade said. 

Regarding the use of artificial intelligence in the finance function, Wade said that legacy AI is already being used to improve outcomes and streamline operations, and should become more embedded to support automation, reduce risk, and lower costs. 

“Generative AI is a somewhat different beast,” he said. “For purposes of official automation work, generative AI can be used to improve finance productivity. It can also be used for scenario planning and some creative tasks. However, in its use for core finance operations, it should be approached with caution.”

 The place of AI in the C-Suite was the subject of a survey released in August 2023

But Wade doesn’t think the CAIO role will eventually become a mainstay in the C-suite. When appointing a CAIO is advisable, the role should not become a permanent position, the

To find out which stage of a company’s AI journey could benefit from a CAIO’s expertise, you can read the complete report here. 

Sheryl Estradasheryl.estrada.com

The following sections of CFO Daily were curated

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