Singapore – Nearly four in five business leaders in Asia-Pacific (APAC) believe their organisations are directing too much of their AI investment towards incremental improvements rather than transformational opportunities, highlighting a gap between confidence in AI adoption and changes to business operations.
Research commissioned by Avanade found that 79 per cent of APAC respondents shared this view. In comparison, only 17 per cent said their organisations had fundamentally reshaped how their entire teams operate around AI.
The findings also showed that 76 per cent of respondents described their teams as established, advanced or AI-first in their AI journey, while 73 per cent expressed high or complete confidence in their teams’ ability to use AI effectively to deliver business strategies and goals.
However, confidence in AI capabilities has not necessarily translated into measurable business outcomes. Some 68 per cent said their organisations have not yet formally calculated the financial returns on AI investments or had finance teams or senior leadership review the results.
Only 43 per cent of APAC respondents said their organisations use business-value and return on investment (ROI) targets to assess meaningful progress with AI. The findings suggest that some businesses continue to measure AI adoption and activity without consistently linking these efforts to financial performance and wider business value.
The research also highlighted a perceived gap between organisations’ public positioning and their actual AI maturity, with 76 per cent of respondents agreeing that their organisations portray themselves as more AI-mature publicly than they are in practice.
“AI is no longer a purely technological conversation, it’s a transformative one. Our research shows that while organisations are seeing value from AI, many are still only applying it to existing ways of working, rather than reimagining what’s possible. The opportunity isn’t simply to keep pace. It’s to build beyond today’s limits,” said Chris Howarth, CEO at Avanade.
“We’re already seeing what’s possible when organisations move beyond productivity gains and redesign workflows around AI. Through our work with Thomson Reuters on Reuters Imagen, we’ve seen first-hand how AI can unlock entirely new ways of creating value when organisations are willing to rethink how work gets done,” Haworth continued.
“Too many organisations are measuring AI progress by activity rather than impact. Deploying tools, running pilots and improving productivity are important milestones, but they are not the destination,” said Ben Beath, Chief AI Officer at Avanade.
“What remains to be seen is whether organisations are truly changing and investing in how decisions are made, how work gets done and how value is created through AI. AI-native challengers are building these capabilities from day one, and established organisations must think just as boldly about the future they want to create,” Beath continued.
“Incremental AI improvements can create real value, but improving existing operations and fundamentally transforming a business are different ambitions. APAC leaders need to be clear about where each applies, with investment decisions and measures of success to match,” said Bhavya Kapoor, President of Avanade Asia Pacific.
“Where transformation is the goal, that means redesigning workflows, responsibilities and decision-making, with clear ownership of outcomes. The real test is whether the intended change happens and its value can be demonstrated,” Kapoor continued.
The research was based on interviews with 1,400 business decision-makers across APAC and 3,600 respondents globally. The participants represented organisations with annual global revenue exceeding US$500 million across sectors including financial services, consumer goods and services, energy, healthcare, manufacturing, retail, distribution and transport.
The findings point to a need for organisations to move beyond AI adoption and productivity improvements by redesigning workflows, establishing clearer accountability and measuring the financial and operational outcomes of their investments.
