Why shadow AI could be the secret to fixing your company's failing AI projects

"AI has become the boardroom obsession of the decade. Yet despite billions in investment and relentless hype, recent independent studies show that most enterprises struggle to turn pilots into measurable business outcomes. Two recent studies put this problem into sharp focus: These studies deliver an important message that must echo across boardrooms: AI pilots aren't failing because the technology isn't powerful enough. They're failing because the strategy and expectations behind them are flawed."

"The MIT study clarifies that the obstacle to why AI pilots fail isn't model horsepower. Instead, the biggest issue is enterprise integration. Most tools don't learn from workflows, and most companies haven't developed the operational expertise to transform experiments into production systems. McKinsey's research echoes this: AI drives impact only when firms redesign workflows, track KPIs, and evolve operating models. Pilots stuck in "demo mode" deliver buzz, not business value."

"Many industry leaders view AI as a short-term margin lever instead of using it to build durable capabilities. The typical playbook is to replace headcount, cut costs, and boost quarterly profit margins. That approach may satisfy investors for a quarter or two, but in the mid- to long-term, it creates liabilities that compound, including: Knowledge debt: Layoffs and shallow automation strip away institutional know-how."

Most enterprises struggle to turn AI pilots into measurable business outcomes despite heavy investment and hype. The primary obstacle is enterprise integration rather than model capability. Most tools do not learn from workflows, and many organizations lack the operational expertise to convert experiments into production systems. AI delivers impact when firms redesign workflows, track KPIs, and evolve operating models; pilots that remain in demo mode generate buzz instead of business value. Treating AI as a short-term margin lever leads to knowledge debt, talent drainage, and degraded customer experience. Sustainable winners build employee-useful projects and prioritize value creation over cost cutting.

Read at ZDNET