SAP study finds Australian mid-market ripe for AI growth

Australian midmarket organisations (companies with high revenue growth and a workforce of 250-1,500) are increasingly adopting new artificial intelligence (AI) innovations in their businesses, according to a recent study by SAP.

The study surveyed 12,003 midmarket businesses globally, of which 783 organisations are based in Australia. Adopting generative AI (Gen AI) is a medium or high priority for 90% of the Australian businesses that responded to the survey, while standard business applications like machine learning and data and predictive analytics came a close second, with 88% giving these a high priority.

Of the total Australian respondents, 89% listed preparing for cybersecurity threats, making operations more environmentally friendly and sustainable, and addressing supply chain gaps as other important priorities.

According to Dr Kim Oosthuizen, Head of AI, SAP Australia & New Zealand, the study reveals that Business AI is the most significant opportunity for businesses in AI today. “Every organisation can realise the opportunities that AI offers in a relevant, reliable and responsible manner,” she said. “That isn’t just summarising emails and creating images. It’s helping us complete the tasks we don’t want to do, providing insights quickly and reliably, helping solve business problems.”

Top priorities

The study indicated that half of the midmarket organisations surveyed in Australia prioritise AI to transform their data security and privacy. Other priorities for AI include:

• Creating new business models: 48%
• Implementing agile processes: 47%
• Optimising supply chains: 45%
• Boosting decision-making: 45%
• Personalising user experience: 45%

Compared to other respondents worldwide, Australia ranks higher for monitoring cybersecurity threats (84% versus 78% elsewhere), detecting fraud (84% versus 78% elsewhere), and gathering market intelligence (85% versus 78%). The survey reveals that 84% of Australian businesses also use AI to a moderate to strong degree for regulatory compliance, developing forecasts and budgets, and automating recruitment processes.

Growth risks

However, Australian businesses view the following as key risks to growth and AI adoption:

• Supply chain disruptions: 38%
• Business silos: 35%
• Lack of integration between systems: 34%
• Lack of change management processes: 33%
• Acting upon incorrect information: 35%
• Finding and retaining talent: 33%
• Insufficient data size and quality: 33%
• A lack of transparency in data results: 32%

Oosthuizen noted that these results indicated that the better the quality and scale of your data, the better the AI results. “That’s why working with a technology partner like SAP is critical as it is already built into the applications that power the most critical business processes.”

Other areas for AI growth

Australian businesses are not only seeking AI to improve their processes but also their financing tools. According to the study, 33% would make an AI use-case for financial forecasting and analysis, followed by 29% using it for summarising investment portfolio performance, and 28% for conducting fraud detection and tax and compliance mandates. Of those Australian companies that use AI for finance, 90% have cited a positive impact on the business and their ability to simplify everyday work, the study indicated.

“We deliver our technology in collaboration with our partner ecosystem, ensuring businesses are applying AI in the right ways and utilising managed service providers should they require extended IT teams,” Oosthuizen said.

She added, “It’s about taking the worry out of AI model creation and implementation, so our customers can quickly adopt the burgeoning technology and bring out their best.”

Regarding a broader view on investments in technology, Australian midmarket companies with high revenue growth that participated in the study listed outsourcing systems to a managed service provider as their top priority, with 18% citing this at the top of their list. This was followed by 17% citing investing in new or updated analytics products and decision-making tools and another 17% listing moving to the cloud as their top priority.

In contrast, Australian companies with lower revenue are prioritising investment in new analytics products and decision-making tools (20%), building customised software tools in-house (17%), and investing in new business software systems (16%).