Singapore mid-market firms lose 23% of AI budgets to complexity

Freshworks said many companies are still stuck in pilots despite plans to raise AI spending.

Singapore's mid-market companies lose 23% of their AI budgets to complexity before seeing returns, according to Freshworks.

The finding is below the global average of 25% for mid-market AI spend, based on Freshworks’ Global Cost of Complexity Report: The Mid-Market AI Complexity Trap.

Nearly 92% of Singapore mid-market IT leaders plan to increase AI investment over the next 12 to 24 months, but only 20% have integrated AI across core business operations.

Another 28% remain stuck in pilot stages, highlighting a gap between AI investment and full-scale deployment.

Freshworks said mid-market AI programmes are stalling because executive expectations for returns are often shorter than actual deployment timelines.

Around 73% of mid-market executives in Singapore expect AI investments to show returns within eight months. However, 48% of organisations said deployment alone takes six to 12 months before meaningful returns can begin.

The top reasons AI pilots fail to become full programmes in Singapore are system integration complexity at 27% and excessive configuration requirements at 25%.

AI is also adding to IT teams’ workload. More than 85% of Singapore mid-market IT leaders said managing AI complexity has increased their team’s workload, whilst 73% said AI outputs are creating noise, errors, or rework.

Freshworks said tool sprawl is adding to the problem. Globally, mid-market organisations use an average of 4.2 AI tools, with 9% using seven or more.

In Singapore, only 42% of surveyed organisations have a formal and consistently applied AI governance framework.

The report found that buying behaviour is shifting toward AI tools that work with existing systems and deliver value faster.

About 36% of Singapore mid-market IT leaders named workflow integration as their top priority for the next two to three years.

Meanwhile, 93% favour built-in workflows over heavy configuration, whilst 58% are buying AI capabilities instead of building them in-house.

Freshworks surveyed 12,021 IT decision-makers across the US, UK, Germany, France, Singapore, and India, including more than 9,000 mid-market organisations. Fieldwork was conducted in March 2026.