Singapore businesses are accelerating their AI adoption and are seeing positive returns, according to new research commissioned by SAP and conducted by Oxford Economics.
The study found that Singapore organisations are investing an average of S$18.9 million (US$14.5 million) in AI this year, with an average 16 per cent return on those investments. Business leaders expect that figure to nearly double to 29 per cent in the next two years.
However, despite the optimistic outlook, the report also suggests that such future gain could be limited by workforce skills gaps and limited access to high-quality, integrated data.
The findings come from The SAP Value of AI Report, which surveyed 1,600 business leaders in eight countries, including 200 in Singapore.
Singapore firms expect to boost their AI spending by an average of 38 per cent over the next two years. Confidence is rising as well, with 67 per cent of respondents say they are satisfied with their current return on investment (ROI) on AI, and 63 per cent say AI has already helped them address key challenges, like improving decision-making and customer engagement.
One company that is looking at deepen its AI adoption is private property developer Far East Organization. It is now using SAP’s Business AI to automate end-to-end lease management, from contract generation to analytics.
This has enhanced analytics now tracks rental trends, occupancy rates, and lease durations, enabling property managers to respond faster to market shifts and make better-informed decisions.
Key challenges remain
Far East, unfortunately, could be more an outlier. SAP’s study found that 70 per cent of Singapore business leaders are unsure whether AI is delivering its full potential. The findings from the SAP report suggest that early success does not guarantee long-term advantage, with significant room for further growth value creation.
Singapore has advanced rapidly in terms of AI ambition and investment, due to strong government policy, high levels of digital maturity and its globally connected economy, said Eileen Chua, managing director for SAP Singapore.
“Our research suggests that to sustain this momentum and seize the next wave of AI innovation, Singapore organisations will have to bridge their reported gaps in data readiness and workforce capability,” she noted, adding that organisational readiness is a key challenge.
The SAP study found that the majority (76 per cent) of Singapore organisations have not yet provided comprehensive AI training for employees, with 68 per cent saying that shadow AI, the use of unapproved or unregulated AI tools, is already being use in the organisation.
Data capability is another challenge. More than half (58 per cent) of respondents lack confidence in their ability to integrate and share data across business functions, a key requirement for scaling enterprise scale AI. Data readiness challenges is more pronounced in legal (80 per cent), finance (73 per cent), human resources (66 per cent), the CEO’s office (64 per cent) and procurement (55 per cent).
New opportunities with agentic AI
While most businesses today are focused on automation and generative AI, future investment is expected to shift toward agentic AI, or autonomous systems that can plan, act, reflect, and collaborate to solve complex business problems.
Currently, just 6 per cent of Singapore businesses say they are ready to deploy and scale AI agents, though more than half (52 per cent) report being partially prepared. Organisations expect returns of 8 per cent from agentic AI over the next two years, slightly below the global average of 10 per cent.
Nevertheless, optimism is strong. Seven in ten (70 per cent) businesses believe AI agents have moderate to high potential to transform operations, and 72 per cent say they could add significant value by managing complex workflows across business units.
