While Singapore’s enterprises are seeing growing returns from artificial intelligence (AI) and cloud investments, only 24 percent feel fully prepared to manage future risks, well below the global average of 31 percent, Kyndryl said last Thursday.

The technology infrastructure services provider said in its second annual Readiness Report, while many organizations in the country are racing to modernize, workforce preparedness and growing regulatory complexity are slowing innovation.

“The Kyndryl Readiness Report shows Singapore is a nation in motion, yet most organizations on the island admit they’re not ready for AI,” said Guat Ling Ang, managing director, Kyndryl Singapore.

“What strikes me in this report is the pragmatism behind the numbers. Fortunately, companies are adapting fast, rethinking cloud strategies, and demanding measurable returns on AI,

“This shows that resilience and modernization aren’t optional. They’re the foundation for what comes next,” she added.

According to the report, Singapore’s businesses increased AI spending by an average of 33 percent over the past year.

However, 53 percent of projects in Singapore remain stuck in pilot stages as leaders face mounting pressure to prove returns.

And while 54 percent of global organizations report positive return of investment (ROI) from AI, up 12 points from 2024, most Singapore leaders say foundational technology challenges are holding back progress, with 58 percent of the country’s respondents saying they struggle to keep pace with technological change.

Meanwhile, more than half believe their legacy tech stack limits innovation and scalability, and 68 percent say their information technology (IT) infrastructure is not fully
ready to manage future risks.

It is noted that AI is expected to reshape roles across industries, but readiness remains uneven worldwide.

While 87 percent of global leaders believe AI will completely transform jobs within the next year, only 26 percent of people in Singapore feel their workforce has the right technology skills at to make the most of AI opportunities – making digital proficiency the most pressing workforce concern among Singapore organizations.

Indeed, last year’s report has already revealed a critical gap between perception and preparedness: while 90 percent of business leaders worldwide believed their IT infrastructure was best-in-class, only 39 percent felt it was ready for future disruption. While there has been momentum – that tension remains.

This year report showed that ROI on the rise, but AI stuck in experimentation phase.

54 percent of organizations globally reported seeing positive returns on AI investments – an increase of 12 points from 2024 – 62 percent still haven’t advanced their AI projects beyond the pilot stage.

The report also showed confidence continues to outweigh capability.

While 90 percent worldwide say their tools and processes allow them to rapidly test and scale new ideas, more than half say their foundational technology stack holds back innovation.

It also showed AI driving workforce transformation, but skills gaps remain.

87 percent of the world’s organizations say AI will “completely” transform jobs within 12 months, even while many say their employees are not using AI frequently today and few have the technical skills necessary.

The report also showed that geopolitical pressures are forcing a data pivot.

While reporting clear benefits from cloud adoption, organizations globally are now reevaluating where and how their data is stored, processed, accessed, and secured amid an increasingly fragmented regulatory landscape.

Businesses are also balancing legacy infrastructure challenges, with 70 percent of Chief Executive Officers saying they got to their cloud setup by “accident rather than design”.

Meanwhile, business leaders across all industries and countries say their company’s AI spending jumped 33 percent on average since last year, with 68 percent investing “heavily” in at least one form of AI.

As AI investments rise, so does the pressure to show value — and protect it. Three in five leaders say they feel more pressure this year to deliver ROI from AI than last year.

Many organizations worldwide are also revisiting their cloud infrastructure, prompted by new global regulations and growing concerns about data sovereignty.

Three in four leaders report concerns about the geopolitical risks associated with storing and managing data in global cloud environments, and 65 percent have adjusted their cloud strategies in response – by investing in data repatriation, reassessing vendors, and shifting toward private cloud models.

As leaders worldwide look to scale innovation, people readiness is emerging as a key barrier, and a key opportunity, according to the report.

While nearly nine in ten believe AI will completely reshape jobs in the next year, only 29 percent feel their workforce is ready to successfully leverage the technology and concerns remain around the skills needed to succeed in this era.

Many organizations worldwide are also battling cultural barriers – with nearly half of the Chief Executive Officers reporting their organization stifles innovation (48 percent) and moves too slowly in decision making (45 percent).

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