The Singapore State of Business Growth 2025: Part 3
The AI Performance Gap
Why most businesses are missing the ROI they expected
Singapore's AI Paradox Reveals that Adoption Without Integration Creates Expensive Disappointments
Here's Singapore's AI paradox: while 83% of businesses have implemented some form of AI, only 16% have reached advanced implementation (deploying AI across multiple business functions). This isn't just an adoption gap — it's a performance chasm. Advanced AI users are:
AI Implementation by Sector
While overall AI adoption is strong across Singapore, implementation depth varies significantly by industry—revealing untapped opportunities for competitive advantage.
In financial services, 32% of businesses have reached advanced implementation. In contrast, only 14% of companies in the information media and telecommunications sector (which includes tech and software) have done so. Across all sectors, the average sits at just 16%.
What separates basic AI users from advanced performers? The answer lies not in the AI tools themselves, but in the foundation beneath them.
The Hidden AI Killer: Why Your Data Foundation Matters More Than Your AI Tools
Only 6% of businesses planning to adopt AI have integrated systems — creating 'false negatives' that make AI appear to fail
Here's the hidden barrier to AI success that no one talks about: fragmented data systems. Only 6% of companies in the planning and exploratory AI stages are fully integrated. Without a connected foundation to work from, even sophisticated AI tools deliver subpar results.
This creates "false negatives" — AI appears to fail when the real issue is fragmented data and disconnected systems that can’t communicate effectively. If your business is in early stages of implementing AI, integrate business systems first. Sometimes, you have to go slow to go fast.
“AI is only as good as the data that powers it. Imagine asking your AI assistant to help with a customer issue, but it can‘t see their recent emails, doesn’t know about their last support call, and has no idea about the new product update that might solve their problem. Complete context is essential to AI delivering on its full promise.”
Karen Ng, SVP of Product, HubSpot
But what happens when businesses get this foundation right? The results speak for themselves.
Beyond the AI Hype: When Expectations Actually Match Results
How advanced AI users bridge the gap between promise and performance
Businesses have clear expectations for AI impact. Close to half (45%) of businesses implementing or planning to implement AI expect improved customer experience through faster response times, while 41% anticipate automation-driven efficiency gains.
Here's the remarkable part: when businesses get their foundation right, the benefits actually align with—and often exceed—expectations. Among businesses that have successfully implemented AI, the most commonly reported benefits centre on acceleration: increased efficiency (44%), higher productivity (40%), and faster decision-making (36%). This pattern reveals AI's true value proposition: it's not about replacing human work entirely, but about accelerating existing processes to superhuman speeds.
The businesses seeing these results aren't just lucky, they're strategically different. The data reveals what they do differently, and why most businesses struggle despite having access to the same AI tools. So what exactly holds most businesses back from achieving these results? The barriers are surprisingly consistent across all company sizes and digital maturity levels but so are the solutions.
Breaking Through the AI Implementation Trap: Why Cost and Complexity Become Manageable
The three barriers that stop most businesses and how integrated systems can solve them
Implementation barriers affect businesses regardless of their digital maturity. Cost of implementation (43%), lack of technical expertise (40%), and security and privacy issues (38%) represent the most common barriers to fully realising the value of AI.
But here's what changes the game: these challenges become more manageable with integrated systems. Unified systems reduce implementation complexity, require less specialised technical expertise across multiple tools, and create simpler, more secure frameworks than fragmented environments.
Understanding the barriers is one thing but overcoming them requires a strategic approach. Here are the best practices that help businesses move from AI frustration to AI success.
Fast, Secure AI Implementation: Essential Steps for Real Results
For businesses ready to move beyond AI experimentation to strategic implementation
"Fast, secure AI adoption starts with clarity. Identify the tedious tasks draining your team, then offload them to AI with purpose — but only once your systems can support it with complete context. Success builds trust. Remember: AI isn’t one-size-fits-all. You need to be intentional about matching the tool to the task, and the outcome to your business goals. Ground every step in transparency, privacy, and relevance. AI may be the catalyst, but humans are still the architects of the future.”
