Avanade report: mid-market firms embrace AI despite hurdles

Avanade has launched a new report, Trendlines, highlighting mid-market organizations' approach to artificial intelligence (AI) and emerging technological advancements.

The report captures insights from 4,100 business and IT decision-makers and reveals both the eagerness of mid-market firms, defined by revenues of USD $500 million to USD $5 billion, to adopt AI and the significant challenges they face in achieving sustainable success.

According to the report, these organizations are highly optimistic about AI, with most expecting returns of up to fourfold within a year. A majority of companies are planning to increase their budgets for generative AI projects by up to 25% in response to growing competitive pressures, with 85% of leaders concerned about losing ground without rapid AI implementation.

Despite this enthusiasm, nearly half of the organizations find themselves stalled at the business case or proof of concept stage, with 76% citing poor data quality and governance as substantial barriers to AI progress. Concurrently, an overwhelming 95% of leadership teams are expediting plans to modernize their legacy systems.

Rodrigo Caserta, CEO of Avanade, commented on the challenges these companies face. He stated, "Mid-market leaders are at a defining moment with AI—where investments must not only boost efficiency but ignite future innovation and sustainable growth. The tension between cost-cutting and growth ambitions shows the AI value equation is still being worked out. Productivity with AI isn't just about doing things faster; it's about reimagining work itself. People are central to this shift, requiring workforce alignment, clear communication, and new training. Leaders must rethink how they support collaboration, measure productivity, and ultimately, assess the true value AI brings to their organizations."

Avanade's Trendlines report also highlights concerns over data security, with 94% of organizations identifying sensitive data protection as a critical issue. Many are investing in new data governance measures, including implementing new data platforms and setting governance standards, with a focus on funding data analytics, automation, and cyber resilience.

To address these challenges, Avanade has introduced a suite of new services aimed at facilitating tangible ROI for mid-market companies. Jason Hunt, Global Client Solutions Lead at Avanade, spoke to these initiatives: "For mid-market companies with ambitious AI goals, balancing cost-efficiency with workforce readiness and a strong tech foundation is critical. Our new suite of services is built to help them achieve tangible ROI and foster a culture of innovation and sustainable growth."

An example of a company utilising Avanade's guidance is PageGroup, a UK-based global recruitment firm. PageGroup is actively modernizing its technology by integrating generative AI applications to enhance its job search functions. Alex Bates, Managing Director of Group Data, Insights and Activation at PageGroup, shared his insights, stating, "At PageGroup, we recognized the importance that AI would have on our growth ambitions, but the challenge was blending the technology with our professional experience as an organization, to augment the work that we do. As a company of our size, we need to innovate, but we also need to see return on our investments and true value, quickly. Avanade helped us seamlessly integrate generative AI into our job search functions, ensuring that the technology was not only efficient but also truly aligned with our business goals. We now offer an innovative, AI-driven experience that sets us apart in the market, ensuring sustainable growth in the short and long term."