The possibilities of Generative AI (GenAI) feel endless on paper, but in practice, many companies are struggling in the early stages of their GenAI journey.
According to Gartner, 30% of GenAI projects will be scrapped this year due to a lack of return on investment (ROI)1.
So what’s going wrong?
53% of respondents report that their efforts to realise the ROI of GenAI meet their expectations2.
At Clarasys, we’ve seen a common thread over the last 12 months. We believe GenAI is often procured too quickly and rolled out without determining the business case first. This is resulting in GenAI projects being stopped after the piloting phase because businesses aren’t seeing any anticipated benefits, or they can’t show any return.
It’s important to establish business value for any new project - GenAI can be an expensive mistake when it isn’t rolled out in the right way.
There’s no single GenAI blueprint
Most businesses are still at an early point in their GenAI journey, and there’s no playbook for what works and what doesn’t. This is why the first questions every leadership team should ask are: “What kind of value do we want to generate from GenAI and what type of projects do we want to engage with?”
Build a business case and a portfolio of work by asking yourself what value you want to derive from GenAI? Are you looking to improve productivity, transform customer experience (CX), or perhaps disrupt your market with entirely new products? The answer will determine the nature of your investment and how you measure success.
Three investment models for Generative AI and their potential ROI
There are three different types of GenAI investment, each with its own risk profile, time-to-value, and type of return.
- Quick wins. This includes task-specific improvements aimed at maintaining competitive parity.
- Competitive differentiation. This involves using GenAI to enhance existing processes for competitive differentiation.
- Innovative transformational initiatives. This means radical innovation that creates entirely new value propositions or markets.
Forward-thinking leaders design a GenAI portfolio that blends these patterns according to their strategic intent, risk appetite, and financial expectations.
Let’s look at these three types of investment in greater detail.
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Quick wins and productivity boosts
This is the “safe bet” approach. Projects like AI copilots and virtual assistants can boost individual productivity quickly. These are often easy to implement, have short time-to-value, and don’t require massive cultural or operational changes.
As productivity improves, the ROI is often indirect. Instead of viewing these benefits as ROI, you should consider ROE (return on employee) as these initiatives can boost employee satisfaction, which can reduce sick days, reduce attrition and associated recruitment costs, and improve operational metrics like task speed. These benefits might avoid cost in the future, but they won’t spike your revenue.
For many organisations, this is a great starting point. Think Apple Intelligence, Microsoft Copilot, Google Gemini - they are all tools that support rather than reinvent. Companies such as Uber have integrated Gemini to save time on repetitive tasks, allowing developers to focus on higher-value work, enhancing employee retention. Just beware of “productivity leak”, where theoretical gains are offset by task switching, poor adoption, or they’re replaced with low-value activity.
Fifty per cent of GenAI investment is on productivity initiatives according to the 2024 Gartner AI Survey: CIO and Technology Leader View, but CIOs and executive teams expect ROI4.
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Competitive differentiation
These projects transform specific processes, such as AI-enhanced customer support, where people interact with a chatbot that can improve efficiency or marketing automation. Here, GenAI directly contributes to competitive advantage by improving speed, quality, and CX.
These use cases are more complex and riskier than quick wins, but they offer clearer paths to ROI. Time to value will be longer, but financial benefits can be measured through tangible changes like headcount reduction, increased sales, or reduced churn. For example, GSK is actively integrating Generative AI into its research and development processes to accelerate drug discovery, improve patient selection, and enhance clinical trials5. Or another example, Vodafone has boosted its NPS by 20% after augmenting its virtual agent with GenAI.
The key here is to tightly couple GenAI initiatives with business outcomes and actively measure impact.
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Innovative transformational initiatives
This is the moonshot category. Innovative transformational initiatives are game changers for your business as they aim to create new products, services, or entire markets using GenAI. This might include entirely new platforms, business models, or AI-native offerings.
These are high-cost, high-risk projects. Time-to-value is long and returns are uncertain, but when they pay off, they can change the game completely.
Given the strategic nature, success here isn't measured in quarterly returns. Instead, think in terms of market creation, long-term revenue potential, and innovation leadership. These projects require a high tolerance for ambiguity and a strong organisational commitment to change.
Building a balanced GenAI portfolio
The most successful GenAI strategies are portfolios that include balanced blends of quick wins, differentiating use cases, and transformational bets. And they’re aligned to the organisation’s specific goals, timelines, and risk appetite.
So, what should leaders consider when shaping their portfolio?
- Start with strategic intent: What do you want to achieve? Is it productivity gains, growth, disruption, or all three?
- Set clear expectations: Not all GenAI value is financial and not all benefits are immediate. Make sure the C-Suite, in particular the CFO, understands this.
- Invest with purpose: Costs can be uncertain and this is a major barrier to realising value at scale. Avoid scattered pilots and align projects to business outcomes.
- Understand cost and complexity: True ROI depends on people, process, and change management, not just technology. Define new roles to get the most of GenAI investment. Make sure your people have the right training.
- Measure the right metrics: For productivity initiatives, look at employee engagement and process efficiency. For competitive differentiation programmes, focus on revenue and customer satisfaction. For transformation initiatives, look at your market share.
- Be Brave: Take bigger, calculated risks than you might be comfortable with. The higher the risk, the greater the potential reward.
The bottom line of proving ROI of Generative AI
If you are struggling to realise ROI, it might not be GenAI that’s failing. It’s more likely to be a lack of clarity on what success looks like. Think about what you want from your GenAI project and then build the roadmap to get you there.
By investing in the right mix of initiatives and committing to the operational change that is required, companies can see real value in their GenAI projects. Remember that ROI might not be financial, and be prepared to play a waiting game because big rewards won’t happen overnight.
Need support in transforming your AI ambition into actionable outcomes? We can help you to build a strategic roadmap tailored to your people, challenges and goals, blending technology expertise and change management to unlock sustainable, measurable value across your organisation. Get in touch today to realise the real potential of GenAI for your business.
References
- https://www.gartner.com/en/newsroom/press-releases/2024-07-29-gartner-predicts-30-percent-of-generative-ai-projects-will-be-abandoned-after-proof-of-concept-by-end-of-2025
- 2025 Gartner report: The 3 business cases of Generative AI value
- https://biztechmagazine.com/article/2025/04/review-google-gemini-offers-businesses-wealth-possibilities#:~:text=Companies%20such%20as%20Uber%20have,value%20work%2C%20enhancing%20employee%20retention
- 2024 Gartner CIO Generative AI Survey
