Businesses boost AI spending as governance lags behind

Businesses are increasing investment in AI-led transformation initiatives, according to new research from the Business Transformation World Summit. The findings point to a widening gap between AI spending and the policies used to govern it.

The survey of 185 transformation leaders found that the share of organisations increasing investment in AI-driven business transformation rose by 46% over the past year. Over the same period, adoption of AI governance policies increased by 7%, leaving fewer than half of organisations, 46%, with a policy in place.

Another 27% said they had neither an AI governance policy nor plans to introduce one. The data suggests many companies are moving ahead with AI projects before establishing formal oversight.

Planned spending is shifting most sharply towards agentic AI. Nearly 60% of respondents said they plan to invest in the technology over the next 12 months, up from just under 40% a year earlier.

The report also found that businesses are struggling to show returns on those investments. The share citing a lack of clear return on investment as a barrier to AI adoption rose from 23% to 38%.

Changing priorities

AI is now the most commonly used process in business transformation, cited by 61% of respondents, ahead of change management at 53%. Even so, change management emerged as the biggest transformation challenge, identified by 54% of those surveyed, overtaking cost.

The figures indicate a shift in how companies define the purpose of transformation work. Top-line growth is now the leading measure of success at 33%, more than double the share measuring success through cost savings, at 16%.

That suggests boards and executives are placing more emphasis on revenue growth and commercial outcomes than on efficiency alone. It also reflects a broader move away from back-office restructuring towards initiatives more directly tied to expansion and market performance.

The research points to other constraints beyond governance. Skills, data quality and change management were all identified as areas failing to keep pace with the rate of AI adoption, raising questions about how well prepared organisations are to support wider deployment.

"New technology is helping the business transformation community change at unprecedented speed, but as a discipline concerned with change and improvement, it's imperative to ensure that any implementation of these tools is paired with deep, strategic work so they work well, safely and effectively. Layering new AI tools on top of fragmented data, legacy systems and weak plans won't work. What will work is pairing them with a clear understanding of the role they can play, strong guardrails, trained staff and effective human-led strategy," said Cathy Gu, Event Director at BTWS.

Governance gap

Governance has not kept pace even as AI becomes more central to transformation programmes. With most respondents either already using AI or planning further investment, the lack of formal policy frameworks may become more significant as projects move beyond trial phases.

"The pace of AI adoption is accelerating faster than many organizations' ability to put the right foundations around it. Investment in agentic AI is exciting, but technology alone doesn't create transformation. Governance, trusted data, clear measures of value, workforce readiness and change management have to advance alongside it. Without those disciplines, organizations risk scaling complexity and risk rather than scaling value. The opportunity now is to move beyond experimenting with AI and build the governance and operating models that allow us to deploy it responsibly, measure its impact and earn the trust of the people we serve," said Crystal Broj, Enterprise Chief Digital Transformation Officer at the Medical University of South Carolina and a member of the BTWS community.

The results were based on responses gathered globally between May and August from leaders responsible for transformation programmes. They show a business environment in which AI has shifted from an emerging interest to a core area of planned spending, while many organisations are still working through the operational and managerial demands of broader use.

Nearly 60% of respondents said they planned to invest in agentic AI over the next year, while 38% said a lack of clear return on investment remained a barrier to adoption.