Australian SMEs adopt AI but lag on workflow change

Australian small and medium-sized businesses are using artificial intelligence tools more widely, but new industry figures suggest most have yet to automate core operational work.

Data cited by Melbourne consultancy Appliers shows 43% of Australian SMEs reported some level of AI adoption between December 2025 and February 2026, according to the National AI Centre. By contrast, Deloitte Australia found only 12% of organisations said AI was genuinely transforming their business.

The gap points to a pattern emerging across the market: staff are using generative AI tools for tasks such as drafting emails and text, but many businesses have not changed the underlying workflows that drive sales, reporting, customer communication and administration.

Rob Pisano, co-founder of Appliers, said many companies were mistaking casual use of AI tools for deeper business change.

"Most businesses think AI adoption means someone writes emails faster," Pisano said.

"That is not transformation. Transformation is when work leaves the business completely."

His comments reflect a broader concern among advisers and corporate leaders that Australian companies have improved awareness and governance around AI, but have been slower to redesign day-to-day processes.

Productivity gap

KPMG research cited in the figures found Australian organisations lead the world in AI governance adoption, but lag global peers in AI-led productivity and workflow change. Only 35% of Australian organisations said they prioritised AI-driven productivity, compared with 42% globally.

That distinction matters because governance measures, while necessary, do not by themselves reduce manual work. Businesses still need to decide which processes can be handed over to software systems, where risks sit, and how staff roles change when repetitive tasks are removed.

Deloitte Access Economics modelling estimated that increased SME AI adoption could add AUD $44 billion to the Australian economy, yet only 5% of surveyed small and medium-sized businesses were considered fully AI-enabled.

For many companies, that leaves a large middle ground between experimentation and operational change. Teams may use ChatGPT or Claude during the day, but still rely on staff to chase clients, update spreadsheets, prepare reports and move information from one system to another.

Pisano said businesses seeing stronger results are embedding AI into routine processes rather than leaving it as an optional tool for individual staff.

"Right now, a lot of businesses have AI sitting in a browser tab instead of embedded into the business itself," he said.

Appliers has been deploying AI systems in sectors including freight and logistics, automating internal reporting, follow-ups, customer communication and operational workflows.

One example is Effective Logistics in Truganina, a Melbourne-area logistics business with 60 full-time staff. Owner Andrew Packer said AI use in parts of the company had improved productivity and staff satisfaction while the business continued to hire.

The logistics sector is a useful test case because it often combines repeatable office work with physical operations. Businesses in the sector typically handle large volumes of updates, customer requests, scheduling changes and internal reporting, creating opportunities for automation if systems can connect reliably to existing workflows.

Board pressure

Executive and board scrutiny is increasing as AI shifts from an experimental technology issue to an operating model question. Directors are asking management not only whether AI tools are being used, but whether they are changing cost structures, service delivery and risk exposure.

"Directors are now being asked what their AI strategy is, what the operational risks are, and whether management is moving quickly enough," Pisano said.

That pressure is likely to intensify as more businesses compare their progress with peers. In sectors where margins are thin and administrative overhead is high, even modest reductions in manual handling can affect productivity and customer response times.

Pisano said speed of execution, rather than company size, was shaping the early winners.

"The businesses winning with AI are not necessarily the biggest businesses. They are the fastest movers."