Eight in 10 Australian mid-market organisations are concerned they'll lose competitive advantage without rapid AI adoption, leading to more than half saying they've got to proof-of-concept stage, compared to 44 per cent globally.

The new research from Avanade, titled 'Avanade Trendlines: AI Value Report 2025', reveals that mid-market organisations in Australia are confidently embracing Artificial Intelligence (AI), with most anticipating up to 4X returns within 12 months. The report also highlights the challenges these organisations face, including workforce readiness, data governance, and tech infrastructure.

The research indicates 86% of Australian mid-market organisations expect to increase their budgets for generative AI projects by up to 50% more. Furthermore, 77% of Australian respondents plan to increase investment in AI training and fluency for their employees, while 76% are focusing on change management to ensure AI supports both new and existing ways of working.

However, the journey to AI adoption is not without its hurdles. 67% of respondents stated that poor data quality and governance inhibit AI progress, with 85% implementing or having implemented new data platforms and governance standards. Moreover, 80% of Australian respondents expressed concern over losing competitive advantage without rapid AI adoption, hence fast-tracking implementation is a top priority.

In Australia, 51% of respondents are at the proof-of-concept stage, compared to 44% globally. This indicates a slightly faster pace of AI adoption in the Australian mid-market sector.

"Mid-market organisations play an integral role in driving Australia's economic and productivity growth. As a company that is committed to supporting Australia's position as a global leader in AI, we want to extend our experience and expertise to help mid-market organisations in Australia realise the full potential of their people and businesses through technologies such as AI," says Carla Ramchand, Managing Director, Avanade Australia.

"We know many mid-market organisations are at a crucial juncture of their transformation, and this is where AI can be a compelling differentiator - helping them create a significant competitive advantage, drive new revenue, build a future-ready workforce, and emerge as leaders in the global arena," Ramchand adds.

In response to these findings, Avanade has recently introduced seven new services that combine Avanade's industry and technical expertise with Microsoft's secure, AI-powered platforms and tools. These new services are designed to provide enterprise-grade innovation and technology at a scale that suits the size and needs of mid-market organisations.

The research was conducted by independent market research firms McGuire Research Services and Vanson Bourne, interviewing 4,100 IT decision makers and senior business decision makers across various countries and industries.