Aussie organisations struggle to bring AI projects beyond pilots

Despite Australian organisations making major investments in AI technology, only a minority have been able to advance any AI projects beyond the pilot stage, research from enterprise technology services provider Kyndryl suggests.

A global survey of business and technology leaders found that Australian organisations have on average increased their AI spending by 32% in the past year. But 62% of Australian respondents have still not advanced their projects beyond the pilot stage, the survey found. Meanwhile, two-thirds of Australian leaders feel they are facing mounting pressure to deliver returns on investment from their AI projects.

The results also indicate that 92% of Australian business and technology leaders expect AI to completely transform jobs within their organisation over the next 12 months.

The top workforce concerns related to the technology include having the right core human skills to make the most of AI opportunities (41%), how to upskill and reskill employees whose jobs are replaced with AI (39%), and ensuring the right technology skills are in place (38%). Another pressing issue for Australian respondents involves the need to revisit organisations’ cloud infrastructure in response to global regulations and concerns about data sovereignty. The survey found that 94% of local respondents expect to make changes to their cloud implementation.

Amid growing geopolitical uncertainty, 69% of Australian respondents report having already made changes to their cloud strategy. Top priorities driving these strategic pivots include improving security and compliance (43%), re‑evaluating data governance policies (47%), data repatriation (42%), and a shift to local technology providers (32%).

Kyndryl MD for ANZ Graeme Beardsell said the findings demonstrate that Australian organisations are facing a readiness paradox.

“They’re among the most ready to navigate external risks and scale innovation efforts, and among the most concerned about doing it in the right way,” he said. “This is especially true when it comes to AI. Investments in AI are on the rise, but many organisations are yet to progress beyond the pilot phase. Readiness to drive business outcomes with technology now means practical action: designing clear guardrails to scale AI, strengthening cyber resilience, and modernising core systems to support transformation.”

Image credit: iStock.com/saifulasmee chede