AI: bigger investments for bigger mid-market returns

If one of the first challenges for mid-market organisations this year was the confidence to invest, the second is now proving those investments are worth it. Our C-suite barometer has shown that mid-market organisations are redefining resilience. Rather than preserving cash in the face of economic uncertainty and geopolitical disruption, leaders are continuing to invest, despite a drop in confidence and with far greater precision.

Nowhere is this more evident than in AI where we see mid-market organisations boosting investment, more so than their smaller challengers and larger competitors. Businesses in this segment are among the most committed investors, with 57% allocating between 11% and 20% of organisational budgets to AI, compared with just 39% and 51% of small and large organisations allocating the same. At the same time, 80% of mid-market organisations have a dedicated technology transformation strategy already in place, almost matching the largest enterprises (82%).

Regardless, while many organisations have committed significant resources to the technology, the focus has shifted rapidly beyond AI experimentation and adoption to focus on the productivity gains, faster decision-making and customer outcomes that will ultimately determine whether their technology and transformation investments have been worth it and will set them apart.

From resilience through investment, to resilience through impact

The first phase of AI adoption was driven by urgency. Leaders wanted to understand the technology, experiment with use cases and ensure they did not fall behind competitors.

Today, that urgency has been replaced by accountability. At the beginning of the year, we saw the primary motivations for investing were better decision making, competitive advantage and operational optimisation. Just six months on, businesses are now most likely to measure returns on AI through productivity increases (59%), customer satisfaction (49%) and employee satisfaction (45%).

As leaders face mounting external uncertainty, this is where resilience and AI become closely connected. Businesses can do little to control inflation, energy costs or geopolitical volatility. They can, however, improve how quickly decisions are made, how efficiently teams operate and how effectively their customers and clients are served. These are precisely the outcomes organisations now expect AI to deliver.

Notably, sustained investment in people is just as pivotal as the technology solutions. They need to be considered and embedded collectively in digital transformation strategies if these outcomes are to be achieved. This requires a long-term perspective, not simply a focus on rapid adoption and deployment.

Why the mid-market has an opportunity

Much of the discussion around AI assumes success belongs to organisations with the largest technology budgets, but the reality may be more nuanced.

Large enterprises possess greater resources, but they also face greater complexity. Multiple legacy systems, larger workforces and slower decision making can all limit the speed at which new technologies create value – something larger organisations need to be careful of. Similarly, smaller organisations have less capital or funding to invest and more to lose if not done well.

Consuelo Sedney, Partner and Co-lead of mid-market activities at Forvis Mazars in the Netherlands, advises: “If you’re leading a mid-market organisation, you often sit in a more advantageous position. Mid-market businesses have become the "sweet spot" in global transformation because they possess enough capital to invest but lack the bureaucracy that slows large enterprises. You’ll have also sufficient scale to invest meaningfully in technology and the people essential to its success, yet remain agile enough to redesign processes, implement changes quickly and measure results within shorter timeframes.”

This is particularly important because productivity gains are already becoming visible. Nearly two-thirds of businesses report productivity improvements of up to 10% from AI investments, while one in five report gains above 10%.  

Sedney highlights: “Those gains may appear modest in isolation. At scale, however, a sustained productivity improvement of five to ten percent can have a significant impact on profitability, decision-making speed and capacity for growth. The organisations generating these returns are not necessarily making the biggest investments. They are making the most focused ones.”

Avoiding the value and returns gap

One important warning has emerged and mid-market organisations arguably have more to lose if they don’t act on this.

Pierre Zapp, Partner and Co-lead of mid-market activities of Forvis Mazars in Germany, determines: “Some organisations still struggle to realise value from these investments. AI can quickly become a collection of disconnected tools and experiments in the rush to adopt it en masse across the business. While adoption rises, the gap and risk get bigger as productivity remains unchanged. Investment increases, but customer outcomes stay the same.”

The organisations extracting value are approaching AI differently. They are using it to solve specific business problems:

• Improving forecasting and planning
• Reducing operational bottlenecks
• Scaling expertise across teams
• Enhancing customer experience
• Accelerating decision making

In other words, they are starting with outcomes and working backwards to the functional technology.

Five questions every mid-market executive should ask

Before approving the next AI investment, leaders should challenge themselves with five questions:

1. Which decisions should become faster?
2. Which expertise should become scalable?
3. Which customer outcomes should improve?
4. Which business model is most valuable for the future and possible now?
5. Where are the complexities that are slowing us down and costing us unnecessary money?

These questions move the focus away from technology features and towards business outcomes. They also help identify where AI can deliver the greatest value with the least complexity, which is an increasingly important consideration for mid-market organisations as they seek to diversify and strengthen resilience without creating new operational headaches.

The next competitive divide

The first wave of AI created a divide between organisations that adopted the technology and those that did not.

The next divide will separate organisations that can demonstrate measurable returns from those still measuring activity instead of outcomes. That distinction is particularly important for mid-market leaders. As discussed in our previous article [link], resilience today depends on deploying capital with precision. AI is becoming one of the most significant tests of that principle.

Zapp concludes: “The strongest performers will not necessarily be those making the biggest investments. In a market where confidence is falling but ambition remains high, the bigger returns increasingly belong to those preparing for what’s next and generating the clearest return from every investment.”