New report details enterprise AI adoption trends and attitudes

The rapid adoption of artificial intelligence has become a critical strategic imperative for mid-market businesses seeking to maintain competitive advantage and drive growth, according to a comprehensive new study by Avanade examining AI implementation trends.

Key findings and market sentiment: A significant majority of business leaders view AI adoption as essential for maintaining competitiveness in today’s market environment.

• 85% of business leaders expressed concerns about losing competitive ground without rapid AI implementation
• Organizations expect a four-fold return on AI investments within 12 months
• 53% of companies plan to increase their generative AI budgets by up to 25%
• Nearly half of organizations are either developing business cases (48%) or running proof of concept trials (44%)

Investment priorities and implementation focus: Mid-market companies are directing resources toward foundational elements necessary for successful AI deployment.

• Data and analytics lead budget allocations at 27%
• Automation initiatives account for 17% of planned spending
• Security and cyber resilience represent 15% of AI-related investments
• Microsoft Copilot emerges as a key tool for driving new revenue while fostering collaborative workplace culture

Technical challenges and infrastructure needs: Organizations face significant hurdles in preparing their technical environment for AI adoption.

• 95% of decision-makers are expediting legacy system modernization
• 76% report that poor data quality and governance is holding back AI progress
• 44% plan to implement new data platforms
• 41% are establishing new governance standards
• 94% prioritize protecting sensitive data as a critical concern

Real-world implementation example: Companies are already seeing practical applications of AI in their operations.

• PageGroup, a global recruitment firm, partnered with Avanade to integrate generative AI into job search functions
• The implementation required careful balancing of AI capabilities with professional expertise
• The company worked to overcome initial challenges in blending technology with human experience

Expert perspective: Industry leaders emphasize the need for a holistic approach to AI implementation.

• Rodrigo Caserta, Avanade’s CEO, describes this as a “defining moment” where AI investments must drive both efficiency and innovation
• Jason Hunt, global client solutions lead, stresses the importance of balancing cost-efficiency with workforce readiness
• Leadership recognizes that productivity improvements require fundamental changes to work processes and extensive workforce training

Looking ahead: The success of AI initiatives will likely depend on organizations’ ability to address both technical and human factors while maintaining a clear focus on sustainable growth and innovation, rather than simply pursuing cost reductions. The tension between immediate efficiency gains and longer-term transformation goals remains a critical challenge for mid-market companies to navigate.