IBM Study: Singaporean companies driven by innovation instead of ROI when implementing AI

Talent and the use of open-source models key in helping Singapore companies unlock AI ROI in 2025.

While ROI remains critical for investments in AI, new research commissioned by IBM shows that it’s no longer the primary driver for AI investments. The study revealed more companies bet on AI for the long term, with investments driven by innovation and ROI.

The study, which was conducted by Morning Consult and developed in collaboration with Lopez Research, surveyed more than 2,400 IT decision makers (ITDMs) globally. From the Asia Pacific region, there were 217 respondents from Singapore, 224 respondents from India, 127 respondents from Indonesia and 100 respondents from South Korea.

Taking a look at Singaporean companies, 52% of ITDMs in the country have made some progress in executing their AI strategy, and 37% indicated significant progress. In 2024, more than half (54%) of ITDMs said they are currently achieving positive ROI from their AI projects, 33% are breaking even, and 9% are seeing negative returns.

According to the study, ITDMs are motivated by innovation (29%) over ROI (24%) when implementing AI pilots. In measuring ROI from AI achievements, Singapore ITDMs are looking at productivity savings (63%), more rapid innovation (61%), and faster software development (58%). When implementing AI pilot projects, Singapore companies faced challenges in data quality and availability (54%), integration with existing systems (46%), and skill gaps among employees (42%).

Tan Siew San, General Manager and Technology Leader, IBM Singapore, commented, “We have seen enterprises in Singapore actively experimenting with AI, particularly in the wake of genAl’s rapid advancement. I believe the time for hype is now over. 2025 will be a crucial time when companies seek to understand how their investments are paying off. Our study highlights how enterprises would look to put more strategic focus on reaping higher AI returns. Talent, open-source models and hybrid-by-design are critical areas to unlock innovation in AI.”

Globally, ITDMs see data quality and integration as the most common obstacles for companies when implementing AI, but challenges are relatively diverse in scope. Specifically, technology integration, lack of AI expertise, and lack of AI governance are among the most challenging.

For Maribel Lopez of Lopez Research, as organizations begin to implement AI at scale, many are placing greater stock in success metrics such as productivity gains, in part because traditional hard-dollar ROI have yet to show up on the balance sheets.

“Yet, they continue to rapidly advance their AI strategies, with no sign of slowing down. Companies seem to now recognize the value of defining specific use cases and optimizing AI projects. They are leveraging hybrid cloud strategies and open source to drive AI innovation and deliver financial returns,” said Lopez.

Further study findings provide a glimpse into organizations’ AI priorities for 2025. 57% are planning to increase their investment in AI, 35% would maintain their current level of investment, and 6% are planning to reallocate AI spend across different or other IT projects. In allocating AI investments, ITDMs focus on IT operations (56%), products and services innovation (43%) and data quality management (39%).

Moving forward, ITDMs plan to focus on solutions like cloud managed services and open-source as they increase their AI investments. Investment in open-source solutions for AI is expected to increase as well with 41% in 2025 as compared to 37% in 2024. Additionally, over half of open-source users (54%) will be using cloud managed services in 2025 to help optimize AI implementation.