Australian firms boost AI spend without tracking returns
Wed, 5th Aug 2026 (Today)
ReadyTech has published new research showing that Australian organisations are increasing spending on artificial intelligence without clear measures of costs or returns. The survey found that almost one in five organisations now spends between AUD $5 million and more than AUD $20 million a year on AI.
Based on responses from 311 Australian organisations, the study found that 96% are either using AI or exploring it. It also found that 71% expect AI investment to rise over the next 12 months, with 30% planning a significant increase.
The findings point to a gap between adoption and oversight. Many organisations are committing larger budgets while still lacking the systems, benchmarks and governance needed to assess whether those investments are producing measurable results.
Marc Washbourne, Chief Executive Officer and Founder of ReadyTech, said organisations were entering a more demanding phase of AI adoption.
"As AI becomes more widely adopted, the technology itself won't be the competitive advantage - the real differentiator will be how effectively organisations convert AI investment into business value," Washbourne said.
"Too many organisations still lack clear productivity baselines and don't consistently measure the value AI delivers, making it difficult to demonstrate ROI or know where to invest next," he said.
Data gaps
Data integration emerged as one of the clearest weaknesses in the survey. While 79% of respondents said they would benefit from a unified data layer, only 58% said their systems integrate well enough to provide a single source of truth.
That shortfall matters because organisations often rely on multiple systems across finance, operations, customer records and compliance. Without reliable, connected data, executives may struggle to track the impact of AI tools on productivity, service quality or risk.
The research also suggested that AI maturity remains limited across much of the market, finding that 43% of organisations are still in the earliest stages despite widespread adoption.
Governance issues
Governance remains another area of concern. One in six organisations, or 16%, said they do not have AI governance measures in place.
Risk concerns were also prominent. Respondents cited hallucinations and misinformation as the leading risk at 50%, followed by privacy breaches at 49% and inaccurate or poor-quality outputs at 47%.
Privacy concerns come as the average cost of a data breach in Australia stands at about AUD $4.26 million, according to IBM's Cost of a Data Breach Report. That puts the financial consequences of poor controls close to the annual AI budgets now being allocated by some organisations.
Even so, attitudes towards AI remain broadly positive. Some 73.3% of organisations said they see AI as more of an opportunity than a threat.
Investment drivers
The data also challenges a common assumption that companies are adopting AI mainly to cut labour costs. The survey found that productivity is the main reason organisations are investing in the technology, while compliance ranked second at 33.3%.
Cost reduction ranked only eighth among the reasons given for AI investment. Just 14.5% of organisations said they expect AI to significantly reduce employee numbers.
That suggests many employers are approaching AI as a tool to change how work is done rather than as a direct route to workforce cuts. In sectors facing regulatory demands and operational complexity, the emphasis appears to be on improving decision-making and reducing repetitive tasks.
Washbourne said the findings point to a shift in how organisations are framing AI programs.
"The narrative around AI has been dominated by fears of job losses, but our research tells a different story. Australian organisations aren't investing in AI simply to reduce costs. They're investing to make their people more productive, remove repetitive work and improve decision-making," he said.
He added that the next stage of adoption would require sharper judgment about where the technology is useful and where it is not.
"Australian organisations are moving from curiosity to execution. That's an exciting shift, but it's also where the hard work begins. For many organisations, it's no longer about choosing an AI tool, but understanding where AI genuinely creates value and where it simply adds another layer of complexity," he said.