AI alignment, not replacement: How CIOs are rebuilding IT value

The noise vs. the signal: What's changing

Tech layoffs demand a lot of attention, particularly when executives at big companies like Meta and Amazon shed thousands of jobs in their quest to be AI leaders. Layoffs may be slowing, but the latest data from the Bureau of Labor Statistics indicate a weak labor market.

Job postings in the global market are down 2.3% in the second quarter of the year compared to the previous quarter, according to a report from data analytics and consulting company GlobalData. The report notes that employers are taking "a more cautious hiring approach" and "balancing external recruitment against workforce optimization."

Workforce optimization is at the heart of AI realignment. It signals that team structures are changing, not just shrinking, in response to AI.

Data integrity company Precisely, for one, is redefining its operating model to be more AI-centric, CIO Joel Chaplin told TechTarget. That means changing how the current team works and rethinking the hiring process.

"Reskilling is probably the biggest thing we're looking at as far as our operating model goes," Chaplin said. "And then as we hire…we look for more of those broader skills versus the traditional [roles], whether it be a systems admin, data analyst."

This kind of shift takes time, and many organizations remain in the early stages of the kind of AI-enabled workforce transformation they deem necessary to successfully adopt AI. Nearly three-fourths (74%) of the senior-level and C-suite leaders who responded to a recent Deloitte survey anticipate that at least half of their organizations' processes will be redesigned around AI agents within four years. Workforce changes will inevitably accompany that redesign; 43% of the survey respondents said they expect "a lot" or "extreme" job disruption related to AI agent adoption within the next 12 to 18 months.

What is AI realignment, and how is it different from AI-driven replacement?

AI realignment is a long-term strategy that changes how people work, rather than simply layering AI on top of existing workflows and swapping people for agents.

Working toward realignment can change organizational structures. Organizations can flatten if AI shifts decision-making authority downward, according to William Howard, practice lead for HR trends and AI at McLean & Company, an HR consulting firm.

"The people who are the closest to that output are often the best people who are positioned to actually act on it," he explained. "In many cases, [this] means removing approval layers. That obviously has a really big impact on structures and can sometimes result in a flattening org structure."

That doesn't necessarily mean the people who previously worked in those now-unnecessary approval layers are being pushed out. They can be moved into new roles, enabling knowledge retention and transfer.

At Precisely, Chaplin is looking at breaking down traditional IT siloes. "We're creating more roles that are dedicated to AI: AI development, AI enablement," he said. "What roles can we shift as we gain more time and gain more productivity through AI?"

As realignment shifts employees into different roles, it can slow hiring.

"Our hope is that we can level people up but really deliver great value back to our customers, that we grow the company enough where we don't need to lay people off because our business is growing so much, and we keep what we have. We just don't need to hire people," Sean Kennedy, CISO at Patra, an agentic AI platform for the insurance industry, said.

AI-driven replacement, on the other hand, is more about automating entire roles and reducing head count, rather than augmenting human workers or shifting their responsibilities.

"Leaning too heavily on replacement is a very much a short-term or short-sighted approach," Howard said. "Realignment is harder. It's going to require some changes to things like structures and roles and responsibilities, but the long-term benefits are going to be a lot stronger for organizations."

AI operating model shifts CIOs can lead

CIOs have a responsibility to help shape the operating models that will support AI realignment. That starts with embedding AI into business workflows. What are the key value streams for an enterprise, and how can AI deliver on those?

That may require shifting individual AI experimentation toward a more disciplined approach that aligns with a business's core functions. For example, Patra serves the insurance industry. That's where Kennedy wants the company to focus on its AI initiatives.

"I don't want to get out and start building software that's not around insurance and delivering value back to our clients. We have to rein that in," he said. "Managing that and keeping everybody aligned on what the target is at the end of the day for the company is more important."

Financial discipline is another important component of developing operating models that drive value for enterprises. Patra, for one, is shifting away from large frontier models and toward a centralized, local system that can run within its own cloud, according to Kennedy.

"The biggest thing that you can do is get people immersed in it. The only way to really do that from a financial perspective is to run that within your own cloud with local LLMs that are meaningful to how you run your business," he said.

Enterprises can adopt different types of talent structures that help to embed disciplined, value-aligned AI into operations. "AI-native pods" are one such emerging structure. These pods are composed of smaller groups of people working alongside AI agents to deliver outcomes faster.

"We're taking a pod approach to say: Okay, we're one product team within this pod. There are some developers. There's a business analyst, and there's a member of the business to form this pod where we can understand the requirements and execute on them rapidly," Chaplin shared.

Whether teams shift to this pod structure or something else, realignment comes with the expectation that people in many different roles will start doing their work differently.

"Our people have traditionally been trained to do specific tasks within a whole workflow. AI is going to allow them to actually level up, become more sophisticated and understand the whole workflow," Kennedy said. "We want the AI to do the individual tasks, but the human to actually oversee the entire thing."

How CIOs can take action

AI realignment is a long-term process that requires integrating the technology into enterprises' top value streams. As CIOs think about rebuilding IT value as part of AI realignment, there are a few steps to take during implementation.

Collaborate with other leaders

"The constraint on the value that AI brings is not just an IT problem. It's not just a technology problem. It's how work is organized and designed," Howard said.

CIOs should work alongside other leaders to bring that change to enterprise AI strategy. At Precisely, Chaplin is leading an AI transformation program in collaboration with the company's chief HR officer.

"We work in tandem to make sure that what we're doing from a technical side of things, from AI, supports the workforce planning we're doing as well," Chaplin said.

Champion AI governance

CIOs also need to work closely with business stakeholders to ensure different departments and teams are aligned on the requirements of AI governance, risk management and shadow AI controls.

"That is where a lot of our time is spent: interacting with the departments and the leaders within those departments to make sure that we're working together and that we're not moving fast but not moving too fast to get ahead of our governance structure," Chaplin said.

Set and track metrics

Measuring the value of AI is more art than science for the time being.

"How do you measure success with AI on an individual level, on a team level, on an organizational level?" Howard said. "I think that's something that a lot of organizations are really struggling with right now."

CIOs have a hand in identifying metrics related to efficiency, productivity and ROI. What value are restructured teams and redesigned workflows delivering for an enterprise? 

The constraint on the value that AI brings is not just an IT problem. It's not just a technology problem. It's how work is organized and designed.

Build the narrative for realignment

The persistent theme of "invest or get left behind" pushes enterprises to move quickly and potentially focus more on replacement than realignment. CIOs who see the strategic importance of realignment have a responsibility to advocate for it.

Instead of buying into the buzz of the latest and greatest AI models and tools, Howard argued for focusing on the people at the enterprise, "Focus more on preparing employees, preparing the organization from a leadership ecosystem and the skills…perspective to make sure that whatever does come next, the organization is ready."

Carrie Pallardy is a freelance journalist based in Chicago. She has cultivated experience writing in cybersecurity, technology, healthcare, and more. She currently covers a wide range of issues relevant to today's CIOs and IT leaders.