AI is everywhere – dominating headlines, shaping industry updates, and featuring in competitors’ marketing. Yet despite the buzz, many Australian businesses remain hesitant to dive in. Recent research shows only 35% of Australian SMEs are actively adopting AI, while nearly half either aren’t sure how to use it or have no plans to do so at all. 

This hesitation represents a significant missed opportunity. Australia was an early leader in cloud adoption and now boasts the highest market penetration of Microsoft 365 in the world. But when it comes to AI, we’re trailing behind. Businesses willing to embrace AI today have a chance to gain the same competitive edge that early cloud adopters enjoyed over the past decade. 

Building a Foundation for AI Success 

While AI’s potential is enormous, it can’t deliver value in isolation. Like any technology, it’s most powerful when integrated into the everyday systems and processes that run your business – communication, documents, workflows, and knowledge sharing. 

That’s why a modern digital workplace is so important. Businesses with a mature digital foundation are far better positioned to harness AI’s capabilities. A modern workplace encompasses eight critical pillars: 

• Communication and meetings 
• Document management 
• Task management 
• Process automation 
• Core business process documentation 
• Knowledge management 
• System integration 
• Technology utilisation 

Every organisation has these pillars in place to some degree, but at very different levels of maturity. Some processes might be efficient and tech-enabled, while others remain manual or fragmented. The more advanced your modern workplace, the more impact AI can have. 

The Four Productivity Challenges Holding Businesses Back 

Despite investments in digital tools, many businesses are still hindered by persistent productivity challenges. Here are four of the most common – and costly – barriers standing in the way of progress. 

1. Underutilisation of Tools 

Many businesses invest in sophisticated software platforms but barely scratch the surface of what those tools can offer. In fact, an estimated 60% of software licensing fees deliver zero return on investment. 

Often, organisations migrate to cloud platforms like Microsoft 365, but they continue to work in the same old ways. Teams rely on endless email threads instead of collaborative channels, and manual processes persist despite the availability of digital alternatives. 

This underuse comes at a real cost. Studies show over 40% of employees spend at least a quarter of their workweek on repetitive tasks that existing software could handle. Nearly 60% believe they could reclaim six or more hours each week simply by tapping into features already at their fingertips. 

2. Disconnected Systems and Manual Workarounds 

Fragmented technology ecosystems are another major obstacle. Many businesses operate several platforms for CRM, quoting, project management, ticketing, and accounting, but without seamless integration. As a result: 

• Staff waste time re-entering the same information across systems. 
• Manual processes emerge to bridge gaps between tools. 

Modern solutions, such as Power Automate, can connect disparate systems, transforming hours of manual work into minutes of automated processing. 

3. Hidden or Fragmented Knowledge 

Employees typically spend around three hours each workday searching for the information they need. Essential knowledge often remains locked away in email inboxes, individuals’ heads, or folders that no one remembers exist. 

This creates significant challenges: 

• Teams frequently interrupt one another to find answers. 
• Staff reinvent solutions to problems already solved elsewhere. 
• Businesses become vulnerable when key employees leave, taking crucial knowledge with them. 

Even when organisations try to document processes, that information often ends up buried in hard-to-navigate systems or quickly becomes outdated. AI-driven knowledge management can change this, making it faster and easier for teams to locate critical information exactly when they need it. 

4. The AI Adoption Gap 

Despite AI’s growing promise, many businesses remain cautious. Some worry about complexity, cost, or data security. Others simply don’t know where to start. 

Yet therein lies a significant opportunity. Just as early cloud adopters enjoyed years of competitive advantage, businesses willing to explore AI now are poised to move far ahead of their peers. The real question isn’t whether AI will transform business operations – it’s whether your business will lead that transformation or be left trying to catch up. 

How to Put AI to Work in Your Business 

Adopting AI doesn’t require massive budgets or sweeping transformations. The key is to start by understanding where your business faces inefficiencies or repetitive manual work – and then taking targeted steps to address those challenges using tools you may already own. 

Begin by asking: 

• What takes too long? 
• What gets done more than once? 
• What requires too many people? 

Identifying your most pressing pain points makes it easier to match existing tools and AI solutions to real business needs. The goal isn’t to adopt technology for its own sake, but to deliver measurable improvements in how work gets done. 

From there, explore features already included in many Microsoft 365 subscriptions. These often contain powerful tools that go underused, such as: 

• Planner for visual task and project management 
• SharePoint for collaborative document storage and organisation 
• Forms for standardising data collection and approvals 
• Power BI for dynamic reporting and analytics 
• Power Automate to build workflows that eliminate repetitive tasks 

Beyond these core tools, AI offers practical ways to boost productivity and efficiency: 

• Meeting Intelligence: AI tools can handle meeting recordings, transcriptions, and summaries, enabling participants to stay fully present while ensuring nothing falls through the cracks. Even modest investments in AI meeting tools can save substantial time and improve accountability. 
• AI Personal Assistants: Tools like Microsoft Copilot help draft emails, summarise documents, analyse data, and more – all while keeping business data secure. It’s an easy way for teams to start using AI in everyday tasks without needing technical expertise. 
• AI-Powered Search: SharePoint’s AI agents can transform how teams find information, surfacing processes and documents instantly through natural language queries. Integrating these capabilities into Microsoft Teams places answers directly in the flow of work. 
• Custom AI Solutions: Businesses can create specialised AI tools tailored to unique needs, from helping staff generate consistent processes to assisting customer service teams in answering queries quickly. These solutions don’t require coding skills; they simply require clear instructions on the desired outcome. 
• Integrated AI Automation: The next frontier of AI lies in connecting it directly to business systems. Imagine asking AI to identify overdue invoices, draft follow-up emails, and populate your to-do list – all from a single prompt. This transforms AI from a helpful assistant into a powerful driver of business efficiency. 

Even small, well-targeted initiatives can unlock significant productivity gains and pave the way for deeper AI integration over time. The goal is not to adopt AI simply because it’s trendy, but to make your business smarter, faster, and more resilient. 

The Competitive Advantage Awaits 

Businesses that begin experimenting with AI today will position themselves far ahead of the pack, while competitors are still determining where to start. Just as cloud computing reshaped the business landscape over the past decade, AI is set to define the next wave of innovation and competitive advantage. 

The question isn’t whether AI will transform your business – it’s whether you’ll lead that transformation or risk being left behind. 

Next Steps for Businesses 

Consider these practical actions to get started: 

1. Audit your current tools. Identify powerful features you’re already paying for but not yet using. 
2. Map your processes. Pinpoint where time is lost to manual, low-value tasks. 
3. Start small. Implement basic AI tools, such as meeting transcription or AI assistants, to build familiarity and confidence. 
4. Strengthen your knowledge base. Organise processes and documentation to make future AI integration smoother and more effective. 
5. Plan your automation roadmap. Target high-impact opportunities to connect systems and reduce manual work. 

Ready to explore how AI can drive real productivity gains in your business? Get in touch to discuss how you can leverage your existing tools – and the untapped potential of AI – to transform the way you work.