Originally published in the Australian Financial Review

This article was published in the Australian Financial Review and explores why most organisations are struggling to turn AI investment into measurable business value.

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The gap between deploying AI and actually using it is wider than most leadership teams think.

Ninety-two per cent of organisations are experimenting with the technology, but only 25 per cent are turning that into measurable business value, according to the ROAI Institute. The difference is increasingly not about tools.

Many leadership teams believe they are already advanced in artificial intelligence. In reality, most remain in early stages of maturity, where copilots, chatbots and analytics tools are deployed in isolation rather than embedded into core workflows and decision-making.

“The biggest disconnect in AI is that senior leaders think they’re more mature than they are,” says Craig McGuire, a lead trainer and AI specialist at PM-Partners. “They’ve rolled out licences, introduced tools, and think they’re AI native. But that’s not what AI native actually looks like.”

In this context, being AI native means embedding AI into core workflows and decision-making – redesigning how work is done, rather than layering tools on top of existing processes.

The consequences of that gap are becoming more visible as AI adoption accelerates across the economy. According to the Tech Council of Australia, AI has reached a critical pivot point, moving out of its IT silo and into the broader economy.

“Technology-enabled work is now contributing as much economic value outside the tech sector as within it,” says Ilana Feain, head of research at the Tech Council of Australia. “Tech is no longer just an industry. It is driving productivity and growth across the whole economy.”

For most organisations, the window to turn AI into a competitive advantage is narrowing, and the challenge today is no longer whether to adopt the technology, but how to integrate it into the way work is organised and governed.

“Adopting AI is not a technology problem – it’s a leadership and operating model problem,” says Mike Boutel, Head of Training at PM-Partners, an industry facilitator and advisor with more than 20 years’ experience in project and organisational capability uplift.

“The technology enables it, but the real work is in how organisations change the way they operate.”

Boutel points to IKEA as an example of how AI can reshape operating models rather than simply improve efficiency at the margins. The retailer used AI tools to handle a large share of routine customer queries, reducing the burden on frontline support teams.

Rather than cutting roles, however, it retrained thousands of customer service staff to take on higher-value work, including interior design and sales advisory roles, effectively turning a cost centre into a revenue-generating function.

“They didn’t just automate tasks and stop there,” he says. “They fundamentally changed how that part of the business operates and where the value sits.”

For McGuire, that distinction highlights what separates organisations that extract value from AI from those that struggle to move beyond experimentation.

“AI can replace tasks, but it can’t replace jobs,” he says. “Most roles are still heavily dependent on context, judgement and organisational knowledge. The value comes from combining that with AI, not trying to substitute it.”

For leadership teams, that means focusing less on the technology itself and more on how it is applied.

“You shouldn’t be spending a single cent on AI if you can’t connect it to a clear business outcome,” McGuire says. “That’s where most organisations are still falling short.”

That reframing is the starting point for leaders: not which tools to deploy, but how AI changes the way work is organised, governed and measured.

For Mike Boutel, the distinction is critical.

“As soon as someone tells me they’re good at AI because they use a particular tool, that’s the tell,” he says. “The real question isn’t what tools you’re using, it’s how you’re improving productivity and outcomes.

“That requires a shift in mindset, and the capability to apply AI effectively, which comes through training.”

Despite this, few organisations have reached that point. Across industries, most remain in a phase of broad but shallow adoption, where tools are widely distributed but rarely integrated into core operations.

“We’re seeing a lot of activity, but not a lot of depth,” McGuire says. “It’s still experimentation rather than transformation.”

Part of the challenge lies in governance, with some organisations restricting the use of AI tools altogether over concerns about risk, compliance or reputational damage. Others have taken the opposite approach, rolling out tools at scale without clear accountability or oversight.

Both paths can limit the value organisations extract from AI.

“If you do nothing, you fall behind,” Boutel says. “But if you move too fast without governance, you create a different set of risks. The organisations that succeed are the ones that can strike a balance.”

A more fundamental barrier is a lack of alignment at the top. While most leadership teams agree that AI is strategically important, there is often little shared understanding of what success actually looks like in practice.

“The CEO is thinking about business outcomes, the CFO is focused on cost, and learning and development teams are saying, ‘we’ve trained everyone, so we’re done’,” McGuire says. “But those views aren’t connected. There’s no single definition of what good looks like.”

That disconnect can make it difficult to move beyond pilots. Proof-of-concept projects are launched but fail to scale because they are not tied to measurable outcomes or embedded into broader operating models.

“They end up in what we call the proof-of-concept graveyard,” Boutel says. The gap between adoption and value is widening. Where do you stand?

Learn how to close it. Download the AI-Native Executive Guide from PM-Partners, Australia’s largest AI training company.

This article first appeared in the Australian Financial Review.
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