AI adoption outpaces enterprise transformation in India, finds Avanade study

Indian businesses are facing challenges in translating artificial intelligence (AI) adoption into measurable business outcomes, despite growing confidence in the technology. While 82% of Indian business leaders surveyed expressed confidence in their organisations’ use of AI, only 23% said their teams had fundamentally changed how they operate around it, according to a new study by Avanade.

The report found that 82% of Indian business leaders surveyed have high or complete confidence in their organisation’s use of AI, compared with 72% across all markets surveyed. However, only 23% of Indian respondents said their teams had fundamentally reshaped how they operate around AI, highlighting a gap between adoption confidence and organisational transformation.

The findings suggest that while Indian enterprises are moving towards greater AI integration, infrastructure limitations, difficulties in measuring return on investment (ROI) and the need for organisational change continue to affect the pace of adoption.

Indian enterprises allow greater AI autonomy

The study found that Indian organisations are allowing AI systems greater independence within defined business processes compared with other surveyed markets.

Around 28% of Indian respondents said generative AI in their teams could complete defined processes end to end without routine human approval, compared with 19% across all surveyed markets. Meanwhile, only 24% of Indian respondents said they required explicit human approval before generative AI could act, against the global survey average of 29%.

AI adoption also appears to be spreading across business functions. Around 27% of Indian respondents said AI was being used across all or nearly all relevant parts of their organisations, compared with 18% across the surveyed markets.

India also recorded higher levels of confidence in its competitive position, with 83% of respondents believing their organisations were ahead of competitors in AI adoption, against a global average of 68%.

Integration challenges affect enterprise AI scaling

Despite growing adoption, integrating AI into existing enterprise infrastructure remains a challenge.

Around 47% of Indian respondents said their organisations had encountered integration or scaling problems while deploying AI, the highest proportion among the surveyed markets and above the overall average of 38%.

Additionally, 48% identified integrating AI with core systems and data as a major challenge to redesigning business operations. Another 41% cited limitations related to data, cloud infrastructure or integration as barriers to becoming AI leaders.

The findings indicate that deploying AI tools across business functions requires more than access to new technology. Enterprises also need to address existing infrastructure constraints and ensure that AI systems can work with their core applications and data environments.

AI productivity gains yet to translate into financial returns

The study found that Indian enterprises are reporting improvements in operational efficiency and employee productivity. Around 44% of Indian respondents reported significant, measurable improvements in operational efficiency, compared with 36% across all surveyed markets. For employee productivity, the corresponding figures were 42% and 36%.

However, these gains have not consistently translated into financial returns. Around 75% of Indian respondents said AI had yet to deliver returns that justified the money and effort invested, compared with 65% across all surveyed markets.

Further, 74% said their organisations had not formally calculated AI ROI and had it reviewed by finance teams or senior leadership. The report also found that 46% believed AI initiatives were being reported as successful despite having limited measurable impact.

Only 19% of Indian respondents said their organisations were making significant investments in AI pilots and proofs of concept, compared with 29% across all surveyed markets.

Leadership and organisational change remain critical

The report also highlights the role of leadership in determining how effectively enterprises integrate AI into their operations.

Around 93% of Indian respondents agreed that organisational leaders could do more to understand AI’s capabilities and limitations. Additionally, 77% believed senior leaders underestimated the extent of organisational change required to realise AI’s full potential.

Achal Kataria, managing director and CEO of Avanade India, said Indian enterprises were demonstrating strong confidence in AI adoption and were moving beyond pilots towards greater operational use. However, he noted that demonstrating financial returns would be critical to sustaining this momentum.

Ben Beath, chief AI officer at Avanade, said organisations needed to measure AI progress through business impact rather than the number of tools deployed or pilots conducted. He highlighted the need to rethink decision-making, workflows and how businesses create value through AI.

The findings point to a growing need for enterprises to align AI investments with business objectives, address integration challenges and establish clear financial metrics to evaluate returns. As AI systems take on greater responsibilities within enterprise workflows, organisational readiness and the ability to measure outcomes will play an important role in determining the value of these deployments.