MELBOURNE, AUSTRALIA, AUGUST 4, 2026: Logicalis Australia, a leading global technology service provider, has released the Australian findings from its annual Logicalis Global CIO Report 2026, revealing a widening gap between organisations’ appetite for artificial intelligence (AI) and their ability to turn early experimentation into dependable, organisation-wide capability.
The report finds that 95 per cent of Australian organisations have increased their appetite for AI over the past 12 months. However, almost four in five CIOs (79 per cent) lack strong confidence that their organisation can scale AI beyond pilots and proofs of concept, while 84 per cent are not strongly confident that their AI investments have delivered measurable business value.
Lisa Fortey, General Manager, Logicalis ANZ, said, “Perhaps the most sobering finding from the research is that more than 50 per cent of CIOs said they wished AI had never been invented. While this is not a rejection of AI’s potential, it reflects the unprecedented challenge technology leaders face in governing its rapid adoption. The pace of AI innovation has outstripped many organisations’ ability to implement the strategy, governance, and data frameworks needed to manage it responsibly. As AI becomes embedded across every function, establishing these foundations is no longer optional, it is essential to unlocking AI’s full potential while managing risk.
“Australian organisations have moved quickly from exploring AI to making it a core business priority. The challenge now is converting that ambition into reliable, measurable outcomes. The findings show that enthusiasm alone isn’t enough. Organisations need clear business alignment, strong data foundations, practical governance, and access to the right skills before AI can operate effectively at scale. For CIOs, this is becoming a leadership and organisational design challenge as much as a technology challenge.”
Despite strong investment momentum, only 34 per cent of Australian organisations say their AI strategy is fully aligned with their broader business plan or key performance indicators. Almost three-quarters (72 per cent) report that business units and central IT leadership are not fully aligned on AI priorities and direction, while 71 per cent lack strong confidence in their AI roadmap for the next two to three years.
These gaps are creating pressure for CIOs, who are increasingly accountable for the strategic integrity and consequences of AI adoption. Almost half of Australian CIOs (47 per cent) are the final decision-maker for AI implementation, yet only 17 per cent are extremely confident that their organisation has the guidance, governance, and practical frameworks needed to manage AI initiatives effectively. This compares with 36 per cent globally.
Lisa Fortey said, “CIOs are being asked to accelerate innovation while managing business value, security, compliance, and sustainability. They’re often carrying that responsibility before the organisation has established the decision-making structures and operating models needed to support it.
“Moving from experimentation to execution requires organisations to agree on what success looks like, establish clear ownership and build governance into AI initiatives from the beginning. It also means recognising where trusted partners can provide specialist capability and help reduce complexity.”
Skills, data and compliance limit AI progress
A lack of internal technical skills is the most commonly reported barrier to AI adoption in Australia, affecting 93 per cent of organisations. Regulatory and security compliance and organisational culture are barriers for 91 per cent, while 89 per cent report data challenges.
Most Australian organisations (92 per cent) describe their approach to AI as “learning as we go”. While this has supported experimentation, AI initiatives developed without stable operating models may struggle to meet the demands of scale, auditability, and regulatory scrutiny.
AI is already producing results in targeted areas. Australian CIOs report the strongest impact in:
- predictive analytics forecasting: 60 per cent
- improved service delivery: 58 per cent
- enhanced customer service: 44 per cent.
Lisa Fortey said, “These results often remain concentrated within individual teams or functions rather than forming part of a repeatable enterprise capability.”
AI adds new cybersecurity and governance risks
Three-quarters of Australian organisations experienced a cybersecurity incident during the past 12 months. Phishing was the most reported threat at 34 per cent, followed by malware and ransomware at 33 per cent, and data breaches at 32 per cent. More than one-quarter of CIOs also identify AI itself as a significant source of risk.
The report finds that:
- 64 per cent say employees are putting data security at risk through their use of AI tools
- 66 per cent believe their organisation does not provide enough education on responsible AI use and AI-related risks
- only 20 per cent are extremely confident that they have full visibility of the AI tools and services being used
- 57 per cent admit to compromising AI governance standards because of limited knowledge or capability
- 34 per cent say cybersecurity incident response times have worsened.
Lisa Fortey said, “AI is becoming part of the security attack surface at the same time as organisations are still working to understand where and how it is being used. Visibility, education, and accountability must keep pace with deployment.
“However, governance shouldn’t be treated as a barrier to innovation. Done well, it gives organisations the confidence to move faster because risks, responsibilities, and decision rights are clear.”
Investment moves towards more autonomous AI
Australian organisations are continuing to increase their AI investments. More than two-thirds (67 per cent) plan to invest further in generative AI over the next 12 months, while 56 per cent expect to invest in agentic AI systems that can complete tasks and coordinate activity with less human intervention.
Almost half of CIOs (48 per cent) believe generative and agentic AI will disrupt existing business models within the next two years.
The shift towards more autonomous technology is also changing how organisations source and manage capability. Almost all Australian organisations (92 per cent) expect to use managed service providers during the next two to three years, reflecting a move from direct technology ownership towards the orchestration of internal teams, platforms, and specialist partners.
Lisa Fortey said, “As AI becomes more autonomous, organisations will need to make increasingly complex decisions about authority, accountability, and control. The CIO’s role is evolving from managing systems to designing an environment where people, intelligent technologies, and external partners can work together safely.
“The organisations that make the most progress will be those that combine ambition with discipline: aligning AI with business priorities, strengthening governance and data foundations, and building the capability required to produce sustainable outcomes.”
Other key findings from Australian CIOs include:
49 per cent say managing risk and compliance is a key driver of greater AI adoption
- 43 per cent are becoming bolder in their AI initiatives after seeing a strong business case or return from early projects
- 32 per cent believe AI adoption in their organisation is already moving too quickly
- only 27 per cent are extremely confident that their organisation measures and manages the environmental impact of AI
- 52 per cent say their organisation is becoming increasingly dependent on a single AI vendor for critical functions
- 64 per cent are concerned about the stability and maturity of the AI market
- 36 per cent are outsourcing elements of cybersecurity to address capability gaps.
For more information and to read the Logicalis Global CIO Report 2026 – Australian results, visit https://www.au.logicalis.com/cio-report.
–ENDS–
About Logicalis:
We are Architects of Change™. We help organisations succeed in a digital-first world.
At Logicalis, we harness our collective technology expertise to help our clients build a blueprint for success, so they can deliver sustainable outcomes that matter. Our lifecycle services across cloud, connectivity, collaboration, and security are designed to help optimise operations, reduce risk, and empower employees.
As a global technology service provider, we deliver next-generation digital managed services to provide our clients with real-time visibility and actionable insights across the performance of their digital ecosystem, including availability, user experience, security, economic performance, and sustainability.
Our 7,000+ Architects of Change are based in 30 territories around the globe, supporting more than 10,000 clients across a wide range of industries to create sustainable outcomes through technology. Logicalis has annualised revenues of US$1.7 billion, with operations across Europe, North America, Latin America, Asia Pacific, and Africa. For more information, visit www.logicalis.com.
