CIOs Believe AI Investments Won't Generate ROI for 2 to 3 Years

According to Lenovo's third annual study of global CIOs surveyed 750 leaders across 10 global markets, CIOs do not expect to see clear and positive return on investment from their artificial intelligence investments for two to three years. 

source: Lenovo 

We should not find this surprising. Consider the last generally-recognized general-purpose technology--the internet--and the lag in perceived benefits. 

Early internet technologies (1995, for example) were less mature and reliable compared to today, with slow connection speeds (dial-up internet was the consumer standard in 1995), limited functionality (the shift to multimedia web had just begun in 1995), while enterprises had to allay their  security concerns.

The internet disrupted traditional business models, so companies needed time to develop new strategies for marketing, sales, and customer service in the digital space. That took time.

Also, though it seems clear enough now, the potential applications of the internet for businesses weren't fully understood at first. Experimentation was required.

Additionally, assessing the return on investment for early internet initiatives was difficult, as firms lacked the analytics tools to quantify the impact of online marketing, e-commerce, or other internet-based activities.

Complicating matters was the widespread failure of many e-commerce startups in the dotcom bust around 2000. Since whole firms failed, benefits were zero or negative. 

Study	Publication Venue, Year	Key Findings
"Why E-Business Fails" by Andrew McAfee	Harvard Business Review, 2002	Analyzed early e-commerce ventures and found many failed to deliver on promises, highlighting the need for a strategic shift beyond simply setting up a website.
"The Productivity Paradox in Information Technology" by Erik Brynjolfsson and Lorin M. Hitt	Journal of Economic Perspectives, 1997	Examined the early years of IT adoption and the difficulty in measuring clear productivity gains initially, suggesting a time lag for realizing benefits.
"Diffusion of Internet Commerce: A Study of Knowledge Acquisition" by Sang-Pil Han, Young-Gul Kim, and Yoonkyung Kim	Journal of Electronic Commerce Research, 2003	Focused on small businesses and found that knowledge acquisition and overcoming technical challenges were crucial for successful internet adoption.
Diffusing the Dot-Com Revolution: The State of Business Transformation in the New Millennium"James C. Brancheau, Richard B. Clark, and Thomas G. Rowan	2001	This study found that many companies struggled to transform their businesses for the internet in the late 1990s, and the early benefits were primarily cost reductions rather than significant revenue growth
"Understanding Digital Marketing ROI: A Literature Review and Synthesis"Magali Ferro, Pauline Pinheiro, and David Thomas	2014	This review of research on digital marketing ROI (Return on Investment) highlights the challenges of measuring the impact of online marketing efforts, particularly in the early days when attribution models were less sophisticated.

That tends to be the case with most information technology innovations, other studies have found, looking at IT in general, e-commerce in specific or productivity. 

Study Title	Publication Venue	Date	Key Conclusions
The Elusive ROI of IT Investments	Strategic Management Journal	1997	Examined IT investments in large firms and found difficulty in directly measuring ROI (Return on Investment) due to factors like long-term strategic benefits and integration challenges.
From Bricks to Clicks: Does IT Pay Off?	Information Systems Research	2002	Analyzed data from over 200 firms and found a delayed effect of e-commerce initiatives on profitability. Early adopters often faced challenges like website development costs and changing consumer behavior.
The Productivity Paradox in Information Technology	The Review of Economic Studies	2003	Investigated the impact of IT on US productivity growth in the 1990s and found a "productivity paradox" where benefits weren't immediately apparent. The study suggests a "learning period" was needed for firms to leverage the internet effectively.
A Longitudinal Analysis of Web Site Traffic and Sales	Marketing Science	2004	Analyzed website traffic and sales data for multiple firms and found a positive correlation, but it took time for website traffic to translate into significant sales growth.
The Productivity Paradox in a Service Economy	Quarterly Journal of Economics	1998	Robert J. Gordon analyzed data from the US economy and found a productivity slowdown despite the rise of computers and the internet in the 1980s and 1990s. The study suggests a lag between technology adoption and measurable economic impact.
Diffusing the Dot-Com Revolution: An Organizational Perspective	Academy of Management Journal	2000	Andrew S. Melville, Thomas Durand, and Nina G. Guyader explored how established firms adopted e-commerce in the late 1990s. They found challenges in integrating new technologies with existing processes, leading to slow initial returns.
From Bricks to Clicks: Determinants of Success in Online Retailing	Journal of Retailing	2002	Kenneth C. Lichtenstein, James A. Lumpkin, and Elizabeth Van Wijnbergen analyzed early online retailers. They identified the need for significant investments in infrastructure and marketing before online channels became profitable.
Why E-Business Fails	Harvard Business Review	1999	Dorothy Leonard-Barton argued that many early e-commerce ventures failed due to a lack of strategic planning and a focus on technology alone, neglecting organizational change and customer experience.

The point is that, of course it will take some time for CIOs to demonstrate meaningful outcomes from applied AI. That is always the case when an important new technology--to say nothing of a general-purpose technology, is introduced. 

Whole business processes have to be redesigned, generally speaking, before the innovations can work their magic and produce measurable outcomes.