While Singapore businesses see the value of agentic AI, many still say they are not ready to govern, scale and realise its potential, according to a new study by SAP and Oxford Economics released this week.
The SAP Value of AI Report 2026 found that the return on investment (ROI) from agentic AI is expected to double to reach US$9.8 million (S$12.6 million) in Singapore over the next two years, compared to last year’s estimate of US$4.9 million (S$6.3 million).
The report surveyed 2,600 business leaders across 13 countries, including 200 from Singapore. It found that 89 per cent of Singapore businesses believe that agentic AI has moderate to very high potential to transform their organisation. However, only 2 per cent of businesses say they are ready for agentic AI.
Notably, Singapore companies also expect overall AI returns to rise. Businesses surveyed expect to generate a total AI ROI of 19 per cent this year, equivalent to US$3.5 million (S$4.5 million). This is up from 16 per cent last year and is expected to increase to 36 per cent in two years, equivalent to US$10.3 million (S$13.3 million).
The value in adopting AI is “from connecting AI to business data, processes and governance, so organisations can move faster while still acting with control and confidence,” said Eileen Chua, the managing director for SAP Singapore.
Uneven AI maturity
The study found that AI has become part of day-to-day work in Singapore, with 27 per cent of all tasks supported by AI. This is expected to grow to 47 per cent in two years.
However, many organisations still need to put in place the necessary leadership, skills and operating models to scale AI effectively. Just 45 per cent of Singaporean companies have a dedicated AI leader responsible for AI adoption, while only 32 per cent have leadership KPIs for AI, and 37 per cent provide training on AI capabilities and risks.
This gap has resulted in increased pressure on workforce planning and skills. Seventy-nine per cent of Singapore businesses believe that their company’s upskilling is not keeping pace with the development of AI tools.
“AI is no longer a side project. It is becoming part of how work gets done,” said Chua. This trend, she suggested, means that organisations need to treat AI capability as a business capability.
“Skills, leadership accountability and responsible usage cannot sit behind the technology curve, especially as companies begin to explore more autonomous AI use cases,” she added.
Key AI adoption gaps
The report also highlighted foundational gaps that could hold back AI returns. A key challenge is data quality, according to the report by SAP, a maker of software and services used to run large businesses.
Surprisingly, the share of Singapore companies that say they are data-ready for AI fell from 62 per cent in 2025 to 55 per cent in 2026. In addition, 82 per cent of firms reported challenges with incomplete data. These issues are impacting business operations, with 81 per cent of businesses experiencing rework, delays or backlogs due to low-quality AI outputs.
Another key challenge is governance. Only 12 per cent of Singapore businesses say their skills, and 10 per cent say their processes and frameworks, are fully ready to govern AI effectively.
These gaps could become more significant as agentic AI adoption grows. Today, 27 per cent of Singapore companies do not have a human-in-the-loop process for agentic workflows, while 30 per cent do not have permission and access controls for agents. Only 40 per cent have a registry of the agents in their business.
The report also found that 66 per cent of Singapore businesses either agree or do not know if they are deploying agents faster than they can govern them.
“When AI systems can act across workflows, businesses need clear visibility into where agents are operating, what data they can access, and where human oversight is required,” said Chua.
“Without that foundation, organisations risk creating more activity without achieving better outcomes,” she cautioned.
