Nearly eight in 10 Asia-Pacific (APAC) business decision-makers believe their organisations are investing too heavily in incremental artificial intelligence (AI) improvements rather than transformational opportunities, according to new research released by Avanade.
The Build Beyond Limits: AI Reality Report, announced on 4 November 2026, found that 79% of APAC respondents believe too much AI investment is directed towards improving existing operations instead of fundamentally changing how businesses work.
Despite growing confidence in AI adoption, only 17% of APAC respondents reported that their organisations had fundamentally reshaped how entire teams operate around AI. Meanwhile, 68% acknowledged that their organisations had yet to formally calculate the financial return on AI investments and have the results reviewed by finance or senior leadership.
The findings are based on responses from 1,400 business decision-makers across APAC, forming part of a wider global study involving 3,600 respondents across 11 markets.
The research highlights a gap between how organisations perceive their AI maturity and the extent to which AI has changed their business operations, decision-making processes and methods of creating value.
The Build Beyond Limits: AI Reality Report, announced on 4 November 2026, found that 79% of APAC respondents believe too much AI investment is directed towards improving existing operations instead of fundamentally changing how businesses work.
Despite growing confidence in AI adoption, only 17% of APAC respondents reported that their organisations had fundamentally reshaped how entire teams operate around AI. Meanwhile, 68% acknowledged that their organisations had yet to formally calculate the financial return on AI investments and have the results reviewed by finance or senior leadership.
The findings are based on responses from 1,400 business decision-makers across APAC, forming part of a wider global study involving 3,600 respondents across 11 markets.
The research highlights a gap between how organisations perceive their AI maturity and the extent to which AI has changed their business operations, decision-making processes and methods of creating value.
 |
| Avanade's Build Beyond Limits: AI Reality Report 2026 highlights the gap between AI adoption, business transformation and measurable investment returns across Asia-Pacific. Photo: Avanade. |
APAC Businesses Report High AI Confidence but Limited Transformation
Although many APAC organisations consider themselves relatively advanced in adopting AI, the research suggests that this confidence has not consistently translated into fundamental changes to how their teams operate.
Among the 1,400 APAC respondents, 76% described their teams as being at the Established, Advanced or AI-first stage of their AI journey.
Similarly, 73% expressed high or complete confidence that their teams were using AI effectively to deliver their strategies and goals.
However, only 17% said their organisations had fundamentally redesigned how entire teams work around the opportunities created by AI.
The findings indicate that organisations may be adopting AI tools and improving productivity without necessarily redesigning their workflows, responsibilities or decision-making processes.
Avanade also found that 76% of APAC respondents agreed their organisations publicly portrayed themselves as more AI-mature than they actually were, suggesting a difference between external messaging and internal assessments of progress.
79% Say AI Investment Prioritises Incremental Improvements
One of the report's central findings is that 79% of APAC respondents believe their organisations direct too much AI investment towards incremental improvements rather than transformational opportunities.
Incremental improvements may include using AI to automate existing tasks, improve productivity or make established processes more efficient.
While these applications can deliver business value, Avanade distinguishes them from investments designed to fundamentally change how organisations operate or create new sources of value.
Bhavya Kapoor, President of Avanade Asia Pacific, said businesses need to establish clear objectives for their AI investments and determine whether they intend to improve current operations or pursue broader transformation.
"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. 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."
The findings suggest that businesses pursuing transformation need to consider organisational changes alongside technology deployment, rather than evaluating progress solely through the number of AI tools introduced.
68% Have Yet to Formally Review Financial Returns From AI
Financial accountability emerged as another challenge in the APAC findings.
According to the report, 68% of respondents agreed that their organisations had not yet formally calculated the financial return on their AI investments and had those results reviewed by finance or senior leadership.
Separately, only 43% said their organisations used business-value and return on investment (ROI) targets to determine whether they were making meaningful progress with AI.
This raises questions about how organisations assess the effectiveness of AI spending, particularly when investments are intended to deliver more than operational efficiency.
Without clearly defined financial or business outcomes, organisations may find it difficult to determine whether AI initiatives are delivering the intended value.
The report suggests that AI investments should be evaluated according to their objectives, whether they involve productivity improvements, business process changes or new opportunities for growth.
Global AI Findings Show Similar Gap Between Adoption and Business Change
The broader global survey identified a similar pattern among organisations across the markets studied.
Globally, 77% of respondents described their organisations as Established, Advanced or AI-first in their AI journey, while 72% expressed high confidence that their teams were using AI effectively.
However, only 18% reported fundamentally reshaping how their teams operate around AI.
The global findings also showed that 75% believed organisations publicly presented themselves as more AI-mature than they actually were.
These global figures are separate from the APAC results and reflect responses from the wider survey sample.
Chris Howarth, Chief Executive Officer of Avanade, said businesses should look beyond using AI to improve existing workflows and consider how the technology could enable different ways of working.
"AI is no longer a purely technological conversation, it’s a transformative one. Our research shows that while organizations 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 also pointed to Avanade's work with Thomson Reuters on Reuters Imagen as an example of the opportunities associated with redesigning workflows around AI.
"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."
Avanade Calls for Measuring AI Impact Beyond Tool Adoption
Ben Beath, Chief AI Officer at Avanade, said businesses should distinguish between deploying AI technology and achieving meaningful organisational change.
"Too many organizations 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. What remains to be seen is whether organizations 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 organizations must think just as boldly about the future they want to create."
His comments reinforce the report's emphasis on evaluating business outcomes rather than relying only on indicators such as AI adoption rates, pilot programmes or productivity improvements.
For organisations seeking more extensive AI transformation, the research points to the importance of aligning technology investments with changes in workflows, decision-making and accountability.
It also highlights the need to establish measures of success that reflect the specific objectives of each AI initiative.
About the Avanade AI Reality Report 2026
The Build Beyond Limits: AI Reality Report was commissioned by Avanade and conducted by independent market research specialist Vanson Bourne.
The research surveyed 3,600 business decision-makers during August and September 2026, covering 11 markets across the Americas, Europe, the Middle East, India, Asia-Pacific and Japan.
Of the total respondents, 1,400 were from APAC.
The study focused on organisations with more than US$500 million in global annual revenue, operating in sectors including financial services, consumer goods and services, energy, healthcare, manufacturing, retail, distribution and transport.
As the findings are based on survey responses from business decision-makers in large organisations, they should not be interpreted as representing every business in APAC or Malaysia specifically.
The complete findings are available through Avanade's Build Beyond Limits: AI Reality Report.
Although many APAC organisations consider themselves relatively advanced in adopting AI, the research suggests that this confidence has not consistently translated into fundamental changes to how their teams operate.
Among the 1,400 APAC respondents, 76% described their teams as being at the Established, Advanced or AI-first stage of their AI journey.
Similarly, 73% expressed high or complete confidence that their teams were using AI effectively to deliver their strategies and goals.
However, only 17% said their organisations had fundamentally redesigned how entire teams work around the opportunities created by AI.
The findings indicate that organisations may be adopting AI tools and improving productivity without necessarily redesigning their workflows, responsibilities or decision-making processes.
Avanade also found that 76% of APAC respondents agreed their organisations publicly portrayed themselves as more AI-mature than they actually were, suggesting a difference between external messaging and internal assessments of progress.
79% Say AI Investment Prioritises Incremental Improvements
One of the report's central findings is that 79% of APAC respondents believe their organisations direct too much AI investment towards incremental improvements rather than transformational opportunities.
Incremental improvements may include using AI to automate existing tasks, improve productivity or make established processes more efficient.
While these applications can deliver business value, Avanade distinguishes them from investments designed to fundamentally change how organisations operate or create new sources of value.
Bhavya Kapoor, President of Avanade Asia Pacific, said businesses need to establish clear objectives for their AI investments and determine whether they intend to improve current operations or pursue broader transformation.
"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. 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."
The findings suggest that businesses pursuing transformation need to consider organisational changes alongside technology deployment, rather than evaluating progress solely through the number of AI tools introduced.
68% Have Yet to Formally Review Financial Returns From AI
Financial accountability emerged as another challenge in the APAC findings.
According to the report, 68% of respondents agreed that their organisations had not yet formally calculated the financial return on their AI investments and had those results reviewed by finance or senior leadership.
Separately, only 43% said their organisations used business-value and return on investment (ROI) targets to determine whether they were making meaningful progress with AI.
This raises questions about how organisations assess the effectiveness of AI spending, particularly when investments are intended to deliver more than operational efficiency.
Without clearly defined financial or business outcomes, organisations may find it difficult to determine whether AI initiatives are delivering the intended value.
The report suggests that AI investments should be evaluated according to their objectives, whether they involve productivity improvements, business process changes or new opportunities for growth.
Global AI Findings Show Similar Gap Between Adoption and Business Change
The broader global survey identified a similar pattern among organisations across the markets studied.
Globally, 77% of respondents described their organisations as Established, Advanced or AI-first in their AI journey, while 72% expressed high confidence that their teams were using AI effectively.
However, only 18% reported fundamentally reshaping how their teams operate around AI.
The global findings also showed that 75% believed organisations publicly presented themselves as more AI-mature than they actually were.
These global figures are separate from the APAC results and reflect responses from the wider survey sample.
Chris Howarth, Chief Executive Officer of Avanade, said businesses should look beyond using AI to improve existing workflows and consider how the technology could enable different ways of working.
"AI is no longer a purely technological conversation, it’s a transformative one. Our research shows that while organizations 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 also pointed to Avanade's work with Thomson Reuters on Reuters Imagen as an example of the opportunities associated with redesigning workflows around AI.
"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."
Avanade Calls for Measuring AI Impact Beyond Tool Adoption
Ben Beath, Chief AI Officer at Avanade, said businesses should distinguish between deploying AI technology and achieving meaningful organisational change.
"Too many organizations 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. What remains to be seen is whether organizations 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 organizations must think just as boldly about the future they want to create."
His comments reinforce the report's emphasis on evaluating business outcomes rather than relying only on indicators such as AI adoption rates, pilot programmes or productivity improvements.
For organisations seeking more extensive AI transformation, the research points to the importance of aligning technology investments with changes in workflows, decision-making and accountability.
It also highlights the need to establish measures of success that reflect the specific objectives of each AI initiative.
About the Avanade AI Reality Report 2026
The Build Beyond Limits: AI Reality Report was commissioned by Avanade and conducted by independent market research specialist Vanson Bourne.
The research surveyed 3,600 business decision-makers during August and September 2026, covering 11 markets across the Americas, Europe, the Middle East, India, Asia-Pacific and Japan.
Of the total respondents, 1,400 were from APAC.
The study focused on organisations with more than US$500 million in global annual revenue, operating in sectors including financial services, consumer goods and services, energy, healthcare, manufacturing, retail, distribution and transport.
As the findings are based on survey responses from business decision-makers in large organisations, they should not be interpreted as representing every business in APAC or Malaysia specifically.
The complete findings are available through Avanade's Build Beyond Limits: AI Reality Report.
