Why Most AI Investments Fail to Show ROI — and the Framework to Fix It

$665 billion is now invested globally in AI. Yet the McKinsey Global AI Survey puts the ROI failure rate at 73% — and that number hasn't moved despite better models, better platforms, and years of practitioner experience.

The Core Formula

AI ROI = (Business Value Generated − Total AI Cost) ÷ Total AI Cost × 100

The Five Measurement Mistakes Killing AI ROI

• No measurement plan at approval — 61% of AI projects were approved on projected value never formally tracked
• Measuring adoption instead of outcomes — usage rates are vanity metrics
• Horizontal AI where vertical is needed — 40% of workers find broad copilots too diffuse to impact revenue
• Undercounting total cost of ownership — integration and change management costs consistently ignored
• Declaring failure before value compounds — 53% expect returns in 6 months; most AI ROI takes 12–24 months

The organisations in PwC's "AI Vanguard" — achieving 1.7× revenue growth and 3.6× three-year TSR — treat AI investments with the same financial rigour as any major capital decision.

🔗 Read the full article on BBN Times