Singapore Mid-Market Firms Lose 23% of AI Budgets to Complexity, Freshworks Report Finds
Source: Singapore Business Review
Singapore's mid-market companies are haemorrhaging nearly a quarter of their artificial intelligence budgets to system complexity before seeing any returns, according to a new global report from Freshworks.
Singapore's mid-market companies are haemorrhaging nearly a quarter of their artificial intelligence budgets to system complexity before seeing any returns, according to a new global report from Freshworks. The survey of over 12,000 IT decision-makers reveals that the gap between AI investment and real deployment is wider than many executives realise.
Despite 92% of Singapore mid-market IT leaders planning to increase AI investment over the next 12 to 24 months, only one in five has actually integrated AI across core business operations. A further 28% remain stuck in pilot stages, creating what Freshworks calls a "deployment gap" between spending and full-scale adoption. The report surveyed organisations across the US, UK, Germany, France, Singapore, and India, with fieldwork conducted in March 2026.
The numbers paint a challenging picture. Nearly three-quarters of executives expect AI to show returns within eight months, but 48% of organisations report that deployment alone takes six to twelve months before delivering meaningful results. System integration complexity is the top reason pilots fail to scale, cited by 27% of respondents, followed by excessive configuration requirements at 25%. More than 85% of IT leaders say managing AI complexity has increased their team's workload, and 73% report that AI outputs are creating noise, errors, or rework.
The report also highlights a governance gap: only 42% of Singapore organisations have a formal and consistently applied AI governance framework. Tool sprawl is another issue, with mid-market organisations globally using an average of 4.2 AI tools and 9% running seven or more. Demand is shifting toward AI tools that work with existing systems — 93% of IT leaders favour built-in workflows over heavy configuration, and 58% are now buying AI capabilities rather than building them in-house.
Why it matters for Singapore: Singapore's smart nation push and heavy government AI funding assume widespread adoption will follow investment. This report suggests the opposite — that complexity, not cost, is the real bottleneck for the city-state's mid-market firms. With SMEs forming the backbone of Singapore's economy, the gap between AI spending and deployment could slow the country's broader digital transformation unless vendors simplify integration and shorten time-to-value.