TL;DR
Most IT projects fail, not just AI.
Technology projects need to be mapped to business strategy.
Business Architecture is how you map technology projects to business strategy.
Business Architecture is the key to successful digital transformation.
There have been many headlines lately about AI’s failure to deliver financial returns.
The Wall Street Journal reported 70% of generative AI projects are stuck in testing (Lin, 2024).
Silicon Valley watchers worry that enthusiasm for AI has turned into a bubble that has increasingly loud echoes of the mania around the internet’s infrastructure build-out in the late 1990s (Brown & Whelan, 2025).
Forbes reported that 53% of AI projects reported a limited ROI of 1 – 5%, and less than 3% a ROI of 10-20% (Maclean, 2025)
This should not surprise anybody, but not because of AI, but because of the horrible track record organizations have in implementing transformative initiatives.
This is nothing new. In 1996, Robert Kaplan and David Norton published their book, The Balanced Scorecard. In their book, the authors cited their research showing 90% of organizations failed to implement their strategy successfully (Kaplan & Norton, 2009).
In 2010, Michael Krigsman, founder of CXOTalk, found that 68% of IT projects fail to achieve desired business outcomes (Cameron, 2020).
AI is simply another technology that enables organizations to perform digital transformation. Take a step back and ask what these organizations are attempting to do with their AI projects. They are using AI as a tool for digital transformation.
Digital Transformation (DT) is the science of applying digital solutions to enhance business transformation. Digital Transformation is the science of improving both internal and external processes, resulting in increased revenue and lower costs. McKinsey & Company defines Digital Transformation as “the fundamental rewiring of how an organization operates. The goal of digital transformation should be to build a competitive advantage by continuously deploying tech at scale to improve customer experience and lower costs.” (Mckinsey, 2024).
Digital Transformation encompasses a company’s business models, processes, external relationships, and products (Schallmo et al., 2017).
Business architecture is the connective tissue that transforms digital transformation from a collection of disconnected technology projects into a coherent, strategy-driven evolution of the enterprise. By linking business strategy to the capabilities required to achieve it, and then tracing those capabilities to the processes, information, and technology initiatives that enable them, organizations gain a structured way to prioritize investments and modernize with purpose. This alignment ensures that cloud adoption, automation, AI integration, and platform modernization reinforce the same strategic outcomes rather than competing for resources or creating new silos. As a result, digital transformation becomes measurable, repeatable, and grounded in the capabilities the business must strengthen to compete and grow in an increasingly intelligent and automated economy.
This is the key to successfully adopting new technologies, including AI.
References
Brown, E., & Whelan, R. (2025, September 26). Spending on AI Is at Epic Levels. Will It Ever Pay Off? Wall Street Journal. https://www.wsj.com/tech/ai/ai-bubble-building-spree-55ee6128
Cameron, B. H. (2020). Strategy execution’s secret weapon for business architecture. Business & Enterprise Architecture, 23(3), 1–7.
Kaplan, R. S., & Norton, D. P. (2009). The balanced scorecard: Translating strategy into action (Nachdr.). Harvard Business School Press.
Lin, B. (2024, October 9). Companies Had Fun Experimenting With AI. Now They Have to Show the Returns. Wall Street Journal. https://www.wsj.com/articles/companies-had-fun-experimenting-with-ai-now-they-have-to-show-the-returns-2a683592
Maclean, D. (2025, October 9). How are businesses calculating ROI on AI investment? Forbes. https://www.forbes.com/sites/forbes-research/2025/10/08/ai-roi-measurement-challenges-forbes-survey-2025/
Mckinsey. (2024). What is digital transformation? | McKinsey. McKinsey and Company. https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-digital-transformation
Schallmo, D., Williams, C. A., & Boardman, L. (2017). DIGITAL TRANSFORMATION OF BUSINESS MODELS — BEST PRACTICE, ENABLERS, AND ROADMAP. International Journal of Innovation Management, 21(08), 1740014. https://doi.org/10.1142/S136391961740014X