Singapore businesses are increasing their investments in artificial intelligence, reporting notable returns but highlighting concerns about preparedness in workforce skills and data integration, according to new findings from SAP.

Rising investments

On average, companies in Singapore expect to spend SGD $18.9 million (USD $14.5 million) this year on AI initiatives.

The reported average return on investment (ROI) stands at 16%, with survey respondents forecasting this figure will climb to 29% within the next two years. Firms anticipate AI investment to grow by 38% over the same period.

Two thirds of business leaders said they are satisfied with current AI ROI, and 63% believe AI has already addressed challenges such as decision-making and customer engagement.

Data and training gaps

Despite these positive numbers, 70% of Singapore business leaders remain uncertain whether AI is realising its full promise for their organisations. Most cite concerns that strong returns today may not guarantee future success.

Workforce capability is a recurring barrier. The study found 76% of organisations have yet to provide comprehensive AI training for employees. At the same time, 68% acknowledge the existence of “shadow AI”, or unregulated use of AI tools within their businesses.

Data integration remains another significant obstacle. Nearly 58% of respondents are not confident in their ability to integrate and share data across business divisions-an essential requirement for effective, scalable AI. The problem is acute in specific areas: 80% of legal departments, 73% of finance teams, 66% of HR units, 64% of CEO offices, and 55% of procurement functions reported issues with data readiness for AI.

Industry application

Far East Organisation, one of the largest private property developers in Singapore, is an example of a business seeking to extract value from AI deployments. By using SAP technologies as part of wider digital transformation projects, the company automated lease management, reduced manual workflows, and leveraged analytics to improve data quality and portfolio insights.

Ng Yee Pern, Chief Technology Officer of Far East Organisation, said, “Embarking on this strategic transformation with SAP’s cutting-edge technologies, we’ve reduced repetitive manual work and improved the accuracy and speed of our decision-making. What previously took days can now be completed in minutes, giving our teams the time and insight to focus on customers and business growth. Building on this success, we continue to innovate with SAP Business AI.”

Agentic AI trends

Singaporean businesses are turning their attention to agentic AI-systems designed to plan, act, reflect, and collaborate autonomously. While only 6% of businesses are fully ready to deploy and scale these tools today, 52% consider themselves partially prepared. The anticipated ROI from agentic AI over the next two years is 8%, slightly behind the 10% global average.

Despite modest short-term expectations, 70% of businesses surveyed see moderate to high potential for agentic AI to transform operations, and 72% agree that it will help manage complex workflows across organisational units.

“Agentic AI represents the next frontier of business transformation. It has the potential to multiply productivity and innovation, but its success depends on the same fundamentals – data quality, integration, and people readiness. The organisations that invest in these areas now will be best positioned to capture value as AI continues to evolve,” said Eileen Chua, Managing Director, SAP Singapore.