Mid-market businesses must turn attention to AI strategy, survey reveals

Recent business data from Pitcher Partners shows a lack of AI strategy among business leaders, despite the majority wanting to experiment and harness its power for transformation.

The latest Business Radar report highlighted 72 per cent of Australian businesses were using AI, with only 13 per cent having made it a “strategic priority”.

Of the 72 per cent engaging with AI, most do so through text-based assistants, from Microsoft Copilot to customer support chatbots.

Furthermore, one in three businesses had implemented AI to improve or replace processes, while another quarter were trialling AI-enabled tools.

From the respondents of the study, middle-market businesses had reported “measurable improvements” through the use of generative AI, such as efficiency gains, automation of repetitive tasks, faster turnaround times and more creative capacity.

The report featured feedback from one respondent who said, “The most helpful is the ability to do a lot of the difficult tasks in the background so people can focus on client relationships.”

Though the “buzz” about AI adoption and how to do it was everywhere, realistically, only 13 per cent of middle-market businesses had made AI a strategic priority with budgets and scaling plans, and only 12 per cent felt ready to scale adoption.

Sudha Viswanathan, Pitcher Partners Melbourne partner, said making the jump required open communication, trained staff and a clear picture of how AI would create opportunities.

“These results show that middle-market businesses are grappling not only with how to adopt AI, but also with how trustworthy, affordable and genuinely valuable it will be,” he said.

“The value of AI technology is dependent on the quality of data that engines have access to, and the capability of existing infrastructure, which means the first step is getting the essentials to uplift your tech maturity.”

In terms of generative AI and what it was being used for in middle-market businesses, 67 per cent used it for administrative tasks, 63 per cent used it for customer service and sales, 63 per cent used it for marketing and content, and 62 per cent used it for operational improvements.

Barriers around scaling AI were also communicated in the report, with 65 per cent citing compliance and security concerns, 64 per cent citing capability gaps, 52 per cent mentioned trust in AI outputs, 46 per cent noted financial constraints and 45 per cent identified cultural resistance.

According to Gavin Debono, Pitcher Partners Melbourne partner, 37 per cent of leaders expected reductions in some roles, highlighting there was still concern around workforce change.

Debono noted that getting value from AI relied on and required a workforce “enthusiastic about possibilities and the challenge”.

“However, your teams are likely to be anxious about the future, their job security and if they’ll have the skills to keep up,” he said.

“Start by acknowledging these concerns openly, show people the real opportunities and invest in retraining so staff see a future for themselves in an AI-enabled business.”

Pitcher Partners Sydney partner, Jyotika Rangel, also weighed in on the report findings and added that when investing in AI, it was crucial to define exactly the business outcomes expected.

“Are you seeking a more efficient process? To free people up for more value-adding responsibilities? Without this clarity or purpose, your use of AI could add complexity rather than supporting a broader business strategy,” she said.

“Spending money on software licenses alone won’t deliver results. It is vital to set aside a budget to onboard and support your people through the change.”