While 75% of business leaders admit their organizations overstate AI maturity, only 18% have fundamentally reshaped how they operate with AI. Most companies are using AI to improve existing business models rather than transforming their operations from the ground up, creating a dangerous gap between AI confidence and actual competitive advantage.
- 75% of organizations publicly overstate their AI maturity, while only 18% have fundamentally reshaped operations around AI capabilities
- 65% report AI has not delivered financial returns justifying the investment, and 62% haven't formally calculated AI's financial return
- Most organizations focus AI investments on incremental improvements rather than transformational opportunities that create new business models or revenue streams
- Only 7% plan to use AI to create fundamentally new operating models or revenue streams in the next 12 months
- 82% say they need faster AI approval processes and more effective monitoring to remain competitive
Three-quarters (75%) of business leaders acknowledge their organization publicly overstates its AI maturity, while only 18% have fundamentally reshaped how they operate around what AI makes possible, according to a report released by Avanade.
“There is a dangerous gap opening up between AI confidence and AI reality. Confidence is not the problem. Ambition is not the problem. The problem is that most organizations are using AI to improve a business model that AI should be replacing,” says Chris Howarth, CEO at Avanade. “Deploying AI is not the same as transforming with it. The organizations that will define the next decade are not asking how to do what they already do faster. They are asking what becomes possible when you build the business around AI from the ground up; new ways of working, new ways of creating value, entirely new things that were not possible before. That is the opportunity most organizations are leaving on the table.”
"Deploying more AI tools doesn't necessarily mean an organization is becoming more competitive," adds Ben Beath, chief AI officer at Avanade. "What's important is whether those investments are changing how decisions are made, how work gets done and how value is created. AI-native businesses are approaching these questions without the same legacy structures, and established organizations need to consider whether they're measuring progress against the right expectations."
Key takeaways:
· Three quarters (77%) of organizations describe themselves as established, advanced, or AI-first in their AI journey, with 72% stating high confidence that their teams are using AI effectively.
· Yet, only 18% say they have fundamentally reshaped how their teams operate around what AI makes possible, with a mere 6% of respondents saying their organization's primary AI focus is creating fundamentally new operating models, revenue streams or businesses.
· 75% say too much of their organization’s AI investment is focused on incremental improvements rather than transformational opportunities.
· 65% say AI has yet to deliver financial returns that justify the investment and effort.
· 62% say their organization has yet to formally calculate AI’s financial return and have the results reviewed by finance or senior leadership.
· Just 7% say their organization intends to use AI to create fundamentally new operating models, revenue streams or businesses over the next 12 months.
· 82% say they need to authorize AI initiatives more quickly to remain competitive, while an equal share wants a more effective approach to approving, monitoring and controlling AI use.
