Avanade: 79% of APAC businesses focus AI investment on incremental improvements
Despite widespread confidence in AI adoption, only 17% of organisations in Asia-Pacific say they have fundamentally redesigned how their teams operate around the technology, while 68% have yet to formally calculate and review its financial returns.
SINGAPORE – Businesses across Asia-Pacific are investing heavily in artificial intelligence but remain focused on improving existing operations rather than fundamentally transforming how they work, according to a new study by technology consultancy Avanade.
The Build Beyond Limits: AI Reality Report, based on a survey of 1,400 business decision-makers across Asia-Pacific, found that 79% believe too much of their organisation's AI investment is directed towards incremental improvements rather than transformational opportunities.
The findings highlight a growing gap between corporate confidence in AI adoption and the extent to which businesses are changing their operating models to capitalise on the technology.
While 76% of respondents described their organisations as Established, Advanced or AI-first in their AI journey, and 73% expressed high or complete confidence that their teams were using AI effectively to achieve business objectives, only 17% said their organisations had fundamentally reshaped how their entire teams operate around AI.
The research also raised questions about financial accountability, with 68% of APAC respondents saying their organisations had yet to formally calculate the financial returns on AI investments and have the results reviewed by finance departments or senior leadership.
Furthermore, 76% acknowledged that their organisations publicly portray themselves as more mature in AI adoption than they actually are.
Only 43% said their organisations use business-value and return-on-investment targets to assess whether they are making meaningful progress with AI, suggesting that adoption rates and productivity improvements are not consistently being translated into measurable commercial outcomes.
For businesses in the region, the findings point to a need to distinguish between using AI to improve existing processes and deploying it to fundamentally change how organisations operate, make decisions and create value.
Avanade chief executive Chris Howarth said AI had moved beyond being a technology discussion to become a question of business transformation.
“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,” he said.
Howarth cited the company's work with Thomson Reuters on Reuters Imagen as an example of how AI can unlock new approaches to value creation when organisations are prepared to rethink how work is done.
Avanade chief AI officer Ben Beath said many businesses continued to measure AI progress through deployment activity rather than its actual impact.
He said implementing tools, conducting pilot projects and improving productivity were important milestones, but businesses needed to go further by reconsidering how decisions were made, how work was organised and how value was generated.
Beath also highlighted the challenge posed by AI-native competitors, which are building their business capabilities around the technology from the outset, requiring established organisations to take a similarly ambitious approach to transformation.
Avanade Asia-Pacific president Bhavya Kapoor said incremental improvements could deliver tangible benefits, but businesses needed to recognise that operational improvements and fundamental transformation were two different objectives.
She said organisations pursuing transformation would need to redesign workflows, responsibilities and decision-making processes, supported by clear ownership of outcomes and appropriate investment measures.
The study surveyed 3,600 business decision-makers across 11 markets in the Americas, Europe, the Middle East, India and Asia-Pacific and Japan. Conducted by independent research specialist Vanson Bourne in August and September 2026, it covered organisations with annual global revenues exceeding US$500 million across financial services, consumer goods and services, energy, healthcare, manufacturing, retail, distribution and transport.
The findings suggest that the next phase of corporate AI adoption will be determined less by the number of tools deployed and more by whether businesses can demonstrate measurable returns and translate the technology into changes in their operating models.
