For Bob Bailkoski, technology has shifted from being treated as a cost centre to becoming the core of business strategy. The Logicalis CEO, who previously served as CFO and COO, has watched this change play out in boardrooms worldwide.
Speaking with Frontier Enterprise, he described how debates over the value of IT have given way to new pressure on CIOs to prove returns on AI investments, with technology now seen not as support but as a driver of competitive edge.
How has the enterprise tech market evolved with generative AI?
We run an annual survey of around 1,000 IT leaders — CIOs and IT directors globally — which gives us a clear view of market trends over the past decade. Ten or 11 years ago, when we started doing the survey, the fear in the IT world was the risk of being sidelined by what was known as shadow IT. Around 2017-2018, digital transformation emerged not just as a buzzword but as a central theme for IT leaders. At that point, IT moved out of the basement and back to the board table, where it began supporting CEOs and boards in making strategic decisions about how to move their organisations forward.
That focus remains strong today, particularly with the rise of AI tools such as generative AI from OpenAI and others, along with competing solutions, agentic AI, broader machine learning, and elements of automation. These all fall within the wide spectrum of technologies that help organisations increase productivity. This shift has placed IT leaders at the centre of strategic discussions. For any organisation today, if technology is not at the core of its strategy, it risks falling behind competitors, since the right technology investments can provide a genuine competitive advantage.
Will Chief AI Officers gain board-level roles like CISOs?
Possibly. That said, the CISO occupies a different position from the AI specialist within an organisation. It makes sense for the security leader to have a separate reporting line into the board, because if the CISO reports to the CIO, there is often a potential conflict of interest. That same conflict does not really exist in the AI space.
While the role of Chief AI Officer is emerging, we are seeing that most still report to the CIO. As a result, CIO responsibilities are expanding, covering not only corporate IT but also the operational technology side of the business. It’s therefore important for the CIO to have visibility, and to some extent control, over AI spending, since its impact is significant not only on corporate IT but even more so on operational technology. If I were the CIO and accountable for those investments, I would want that person reporting to me. I don’t expect this shift to mirror the strong case for CISOs to report independently to the board.
CIOs will continue to have oversight and accountability for AI spending, and many are being challenged by their boards to demonstrate a return on investment. Over the past 12 months and longer, there have been many projects and proofs of concept focused on AI for its own sake — experimenting with the technology to see what it could do. But costs mounted quickly, and CEOs began asking for returns on those investments. CIOs are now under pressure to deliver.
In our survey, almost 90% of Asia-Pacific CIOs said their boards are asking them to show a return on AI investments made in the past year. Looking more closely, 71% of CIOs in Asia-Pacific expect to deliver meaningful financial benefits from their AI investments within the next six months, which is a high proportion.
Logicalis is a global business, operating in more than 30 countries. Because we have technical resources and not just sales functions in each of those territories, when I look across that footprint, some territories, such as Portugal, show different expectations. For example, only 32% of CIOs in Portugal said they expect to generate a return on AI investments within six months, compared with 71% in Asia-Pacific.
Why the difference? In my view, innovation is deeply embedded in the culture of Asia-Pacific. The region is often first to adopt cutting-edge technologies and tends to approach new tools with a mindset of experimentation: try, adapt, and if it fails, try again. That willingness to innovate explains why more CIOs in Asia-Pacific are expected to deliver returns sooner than their peers elsewhere.
Do CFOs still view technology with skepticism?
Ten years ago, when I joined Logicalis as the global CFO, I held that role for two years before becoming global COO, and later Chief Executive. At that time, it was common to treat IT as a cost centre rather than a value enabler.
Even today, from our interactions with clients worldwide, we still see frustration around cost pressures within IT. At the same time, there is recognition that technology tools are not being used to their full potential. IT executives often acknowledge they are not extracting maximum value from the tools at their disposal. This aligns with the CFO mindset of driving efficiency, maximising impact, and squeezing the most out of investments. What is changing, however, is reporting lines: More CIOs now report directly to the CEO rather than the finance function. This shift signals that IT is being treated less as a cost centre and more as a driver of digital transformation and value for the organisation.
As I said earlier, if technology is not at the heart of an organisation’s strategy, it risks losing competitive edge in the marketplace. This requires a mindset shift from IT as a cost centre to IT as a value driver, and we are seeing this take hold.
Still, even CIOs admit there is waste, particularly in the security space. We have observed what we call the “security spending black hole,” where organisations spend heavily on protecting their IT environments through multiple point solutions. These tools often deliver limited outcomes, and IT leaders still struggle to gain a holistic view of their overall security posture. As a result, they are looking for partners who can support them in moving towards platform-based approaches to security, rather than relying on dozens of point solutions.
How will AI evolve in the enterprise over the next few years?
There are many proofs of concept under way across organisations, and CEOs need to keep control of them. Some of these projects operate under the radar, almost in a black ops-style manner.
What we advise CIOs in this respect is to take a step back. When you embark on an AI solution, ensure it is part of a strategic project sponsored by the CEO. That way, the goals are clear and the intended business outcomes are defined. Projects that don’t align with those objectives should be shut down at the outset, saving money on initiatives that won’t contribute to overall goals.
From a tactical and technical perspective, the key is proper data management. Many AI projects fail because of shortcomings in data governance and structure. The principle is simple: garbage in, garbage out. Without the right level of discipline in organising data, success in AI is unlikely.
Finally, there must be education within the organisation about both the opportunities and the dangers of AI. One of the greatest concerns among AI practitioners is the misuse of personal data to drive outcomes. I expect more regulation over the next five years, both globally and locally in Asia-Pacific, aimed at protecting end users and the public from these risks.
