UK firms overstate AI maturity, Avanade research finds

Avanade has published research suggesting many UK organisations overstate their AI maturity. The survey found a wide gap between those claims and deeper operational change.

The study drew on responses from 350 UK business decision-makers as part of a wider survey of 3,600 respondents across 11 markets. It found that 80% of UK organisations describe themselves as established, advanced or AI-first in their AI journey, but only 17% said their team had fundamentally redesigned its operating model around AI.

The figures suggest many businesses are still using AI mainly for narrower improvements rather than broader structural change. Just 8% said their primary intended use of AI over the next 12 months would be to create new operating models, revenue streams or businesses. That compares with 27% focused on optimising existing functional processes and 20% on embedding AI into existing products and services.

Returns on spending also remain in question. Among UK businesses, 61% admitted AI had yet to deliver financial returns that justified the investment, while 65% said their organisation had not formally calculated and reviewed AI return on investment with finance or senior leadership teams.

Revenue generation and lower business costs were among the weakest areas for realised benefits, with only 18% reporting transformational growth in those measures. By contrast, 23% said operational efficiency and customer experience had delivered transformational improvements in offerings and performance.

Competitive pressure

The research points to a tension between internal confidence and external pressure. Nearly all UK organisations surveyed, 90%, said they viewed AI-native competitors as some level of threat.

At the same time, 67% believed they were ahead of peers in AI, while 71% admitted portraying themselves as more AI-mature than they really were. Another 69% said AI investment was still focused on incremental improvements rather than transformation, and 84% agreed their organisation needed to authorise AI initiatives more quickly to remain competitive.

Elsewhere, 79% said businesses had not fundamentally reshaped how teams operate to adopt and integrate AI. Only 21% said they had achieved organisation-wide AI deployment, while 57% reported deploying AI across several or most business functions.

Leadership and execution emerged as another dividing line. While 41% said their AI strategy was fully embedded across the team, 42% said they had a documented strategy that was not consistently executed. Almost every UK organisation surveyed, 97%, reported challenges in deploying and scaling AI.

Chris Howarth, Chief Executive Officer at Avanade, said the issue was not a lack of enthusiasm for the technology but a failure to rethink business design. "There's a dangerous gap opening up between AI confidence and AI reality. Confidence is not the problem. The problem is that most organisations are using AI to improve a business model that AI should be replacing," he said.

He added: "Deploying AI is not the same as transforming with it. The organisations that will define the next decade are not asking how to do what they already do faster. They are asking what becomes possible when you build the business around AI from the ground up: new ways of working, new ways of creating value, entirely new things that were not possible before. That is the opportunity most organisations are leaving on the table."

Value gap

The survey indicates businesses are becoming more focused on proving value from AI spending. It found that 45% of UK organisations ranked identifying AI use cases expected to deliver the greatest business value or return on investment among their highest priorities.

That emphasis reflects a broader market shift as companies move from pilot projects and productivity tools to tougher questions about business impact. The data suggests many organisations remain at an intermediate stage, with some deployment across functions but limited evidence of organisation-wide redesign.

Ben Beath, Chief AI Officer at Avanade, said: "Deploying more AI tools doesn't necessarily mean an organisation is becoming more competitive. What's important is whether those investments are changing how decisions are made, how work gets done and how value is created. AI-native businesses are approaching these questions without the same legacy structures, and established organisations need to consider whether they're measuring progress against the right expectations."