Australian firms warned on narrow AI view by executive

Whitewater Reinventions has warned that many Australian organisations are taking too narrow a view of artificial intelligence, with responsibility for AI shifting beyond IT and into the executive suite.

The comments reflect a broader debate over whether companies are using AI mainly to automate existing tasks or to redesign how they operate.

Adam Salzer, Executive Chair of Whitewater Reinventions, argued that this limited view is holding back local businesses. Many leaders, he said, still see the technology as an efficiency tool or a source of risk rather than a route to broader organisational change.

He suggested this has created a contrast with companies in other markets, where AI is increasingly tied to strategy, operating models and management decisions. In his view, overseas businesses are more likely to treat AI as a commercial opportunity, while Australian boardrooms remain more focused on potential downsides.

Different outlook

Salzer pointed to survey findings that suggest the gap is measurable. He cited BCG research showing that roughly three-quarters of managers in India and Greater China expect AI to deliver major benefits. Deloitte research, meanwhile, found that only 65 per cent of Australian respondents planned to increase AI investment in the next financial year, nearly 20 percentage points below the global average.

Other research he cited also pointed to a conservative local stance. A Thoughtworks study found Australian management teams tend to focus AI efforts on cost reduction, while about one in six reported having no AI strategy at all.

His argument is that this caution may leave companies exposed as AI adoption spreads through core business functions. The strongest performers, he said, are not simply adding AI tools to existing workflows but redesigning processes, products and systems around them.

"AI is like the discovery of fire, it enables many more uses to be developed. Shaving time off a report or a slide deck is the superficial side. The real shift where value is created is new processes, new products, new systems and new ways of doing business to better meet customer needs. Like the discovery of fire lead to massive rethinking of business opportunities driven by steam and then electricity," Salzer said.

Beyond IT

A central theme in his remarks was that AI governance is moving away from specialist technology teams. As businesses explore new operating models, implementation is increasingly being linked to operations, human resources and chief executive-led programs, rather than remaining solely with IT and data departments, he said.

That shift has implications for management. Leaders are being pushed to make decisions on workforce design, customer service, product development and accountability, rather than viewing AI as a discrete software deployment.

Salzer argued that this is exposing a leadership challenge in some organisations. Executives may use AI tools in their daily work, but boards and senior managers still need to exercise judgment about what questions to ask, what outcomes to seek and how to measure returns.

He illustrated the point with an example from a recent executive discussion in which a chief executive officer challenged whether questions raised by a manager came from Microsoft Copilot or from the individual's own thinking. The point, he said, was that management responsibility cannot be delegated to software.

IKEA example

He also cited IKEA as an example of how AI can change jobs and create revenue rather than simply remove labour. The retailer introduced its Billie chatbot to handle routine customer queries, affecting more than 8,500 call centre staff.

Rather than using the move solely to cut headcount, those employees were retrained as remote design advisers. Salzer said this created a new sales channel worth about €1.3 billion, or more than A$2 billion.

The example is often cited in debates over whether AI adoption must lead to job losses. In this case, the claim is that automating one activity opened the way for a different kind of customer-facing work and a separate source of income.

Salzer linked this to a broader management issue: whether leaders define AI projects around efficiency alone or use them to reshape how a business serves customers. Organisations that measure AI against financial and operational outcomes while embedding agentic systems are increasingly outperforming those that do not, he said.

He also said smaller Australian organisations may in some cases be moving faster because they have fewer established processes to protect. In his view, that makes them more willing to treat AI as part of reinvention rather than as an overlay on old systems.

"AI is no longer a technology issue as per the tech boom of the early 2000s, but rather a Transformation opportunity," Salzer said.