AI in APAC: Addressing skills shortages and “solution sprawl”

A globe with dots on it, flanked by three workers and featuring an AI star to indicate AI in APAC

AI is gaining traction in Asia Pacific (APAC) enterprises, but they’ll need to plug gaps in strategy and skills to reap the most value.

ServiceNow’s inaugural Enterprise AI Maturity Index, created in partnership with Oxford Economics, found that enterprises in the four major APAC markets surveyed—Australia, India, Japan, and Singapore—are more likely than the global average to have operationalized AI. The CEO’s office in those markets is more likely to use AI than the CEO’s office elsewhere in the world.

For most organizations, AI is still in the experimental stage.

This suggests that APAC leaders wield outsized influence on the pace of AI adoption. What then should these leaders focus on if they want to achieve greater maturity with AI in APAC?

The race for returns

Although only one in 10 APAC enterprises considers itself very mature in AI adoption, according to our research, a substantial minority have begun to generate a strong return on investment (ROI) in the technology.

More than one-third (36%) of Indian enterprises have derived a greater than 15% ROI in AI in terms of increased efficiency and productivity, along with 33% of Australian enterprises—higher than the global average of 26%. Those gains appear to translate into greater revenues too: 30% of Indian and 27% of Australian enterprises have seen AI boost their revenues by more than 15%.

Not all APAC markets have achieved such success. In Singapore, only 18% of enterprises have improved efficiency and productivity by more than 15%, while 13% of enterprises have seen their pace of innovation slow.

36% of Indian enterprises have derived a greater than 15% return on investment in AI, along with 33% of Australian enterprises—higher than the global average of 26%.

Growing risks of “solution sprawl”

Despite promising signs of growth from using AI, APAC enterprises may struggle to maximize their returns in the long term due to an overabundance of technology solutions and systems.

In Singapore, 77% of enterprises are acquiring AI from a mix of new and existing vendors—more than the global average of 64%. In both Australia and India, 67% of enterprises are taking the same approach with AI procurement. This points to an increasing risk of “solution sprawl”—where enterprise systems multiply out of control, leading to endemic issues such as unstructured data and organizational silos.

Our research suggests many enterprises haven’t yet fully recognized the risks of solution sprawl. In Australia, Japan, and Singapore, less than half have made significant progress on connecting data and operational silos to achieve concrete results with AI.

Even APAC’s AI Pacesetters—organizations that perform strongly in AI—will need disciplined leadership, focused on consolidating platforms and structuring data, to curb solution sprawl.

The need for AI in HR

APAC enterprises have adopted AI unequally across their organizations. In Australia, India, and Singapore, for example, more than 55% of enterprises are already using AI in their strategy and corporate finance functions. Yet in all three markets, less than 20% have adopted AI in HR.

That’s set to change. In India—the market with the highest AI maturity and ROI—43% of enterprises plan to deploy AI to assist with hiring. Additionally, 52% intend to improve performance management with AI.

Indian enterprises are also more likely than their regional peers to consider AI’s impact on employee experience. A decisive majority (85%) consider it important, compared to 74% globally. It appears that growing maturity with AI usage has rendered Indian enterprise leaders increasingly attentive to the correlation between effective technology and people strategy.

In Singapore, 77% of enterprises are acquiring AI from a mix of new and existing vendors—more than the global average of 64%.

Technical skills are make-or-break

This focus on applying AI to HR operations comes as demand for AI skills reaches fever pitch in the region. In every APAC market covered by our research, most enterprises planned to ramp up hiring across AI-related roles. For example:

In Singapore, 65% of enterprises expect to hire more data scientists.
In India, 60% expect to hire more AI configurators.
In Japan, 55% expect to hire more experience developers.
In Australia, 49% expect to hire more machine learning engineers.

This foretells increasingly ferocious competition for scarce talent in APAC. Many enterprises plan to address this with greater upskilling efforts, particularly in areas such as data science and AI configuration, which represent crucial foundations for AI adoption.

Enterprise leaders should consider how AI can help scale AI engineering and adoption processes by creating more productive and automated experiences for existing talent.

Where to start with AI

Our research suggests APAC leaders should start by centralizing technology and data on a single platform. This can simultaneously combat solution sprawl and lay a strong foundation for AI development.

Leaders would also do well to extend AI across use cases in multiple business units under a clear and consistent vision, particularly in addressing acute issues faced in HR and talent development.

“The reality is AI offers organizations an attainable way to connect people, processes, and technologies across the enterprise,” says Chris Bedi, chief customer officer at ServiceNow. “Laying the groundwork today to be an AI-connected enterprise tomorrow is imperative."

Gain more insights in our complimentary Enterprise AI Maturity Index.