AI returns rise as enterprise readiness falls
Kyndryl released the findings from its third annual Readiness Report, revealing a widening divide between the returnsorganizations are seeing from AI and their readiness to manage the risks and demands that come with it.
While 60% of Indian leaders report positive returns on AI investments, up three percentage points from 2025, average readiness across external risks fell eight pointsto 27%. The findings highlight growing challenges around technology foundations, organizational transformation and risk management as AI adoption accelerates.
This year’s report captures the attitudes and actions of 3,700 senior business leaders across 21 countries including 200 in India. The data shows a dichotomy: while organizationsare racing to deliver returns on significant AI investments, they simultaneously feel ill-equipped to navigate the implications of an AI-forward economy.
Martin Schroeter, Chairman and CEO, Kyndryl, said, “As AI creates significant opportunity, organizations are now focusing on how to make early returns sustainable. This year’s Readiness Report shows a new kind of readiness gap: AI ambitions are moving faster than the systems needed to support them, and the bar for readiness keeps moving as AI becomes more integratedin enterprises. Our data shows that focusing on people, technology, and governance can help organizations win with AI and keep the ability to adapt as opportunities evolve.”
The report shows that Indian organizations are making progress in moving AI beyond experimentation, with 85% deploying AI in workflows beyond pilots, while the share still in the experimentationstage has declined 15 percentage points to 56%.
However, scaling remains a challenge, with 70% reporting more AI pilots than they can realistically scale and 58% saying innovation often stalls after proof of concept. As a result, 50% havesignificantly changed their AI strategy in the past year, while 31% have experienced an AI investment failure. Further, 37% report CHRO and CTO/CIO disagreement on AI strategy, highlighting gaps in organizational alignment.
Additional findings from the report include:
Security concerns drive down confidence
For the third year in a row, security concerns topped the list of external risks, and this year contributed most to the overall decline in readiness. Just 35% of Indian organisations and 26% of organisations globally said they were completely ready to manage cyberattacks, marking a decline of 10 and 11 percentage points, respectively, compared to lastyear.
Three in four leaders say AI helps their organizations identify threats faster, even as confidence in their ability to respond to cyberattacks has declined.
Concern about AI challenges established business models
The second-largest drop in readiness came from global leaders’ concerns about competitive disruptions outside of their industry (-10 points from 2025, to 23%). The finding comesas AI agents and other new technologies are being deployed to erode established industry boundaries, and leaders described both challenges of adopting new technologies to questioning established products and business models.
The shift is already visible in enterprise operations, with 85% of Indian organisations deploying AI in workflows beyond pilot projects and 80% using AI agents to automate workflows previouslyrequiring coordination across multiple teams or systems.
Retailers, for instance, are weighing how to benefit from AI shopping assistants without forfeiting direct customer relationships; software companies face questions about SaaSmodels as AI rebalances the build-versus-buy equation; and financial institutions are challenged by emerging lending models.
Modernized infrastructure isn’t necessarily AI-ready
For the third year in a row, Indian leaders said upgrading their IT infrastructure was the number one action their organizations are taking to mitigate external risks, and 71%rate their infrastructure as mostly or fully modernized. 59% of Indian leaders say significant re-architecture is required to support AI at scale.Leaders are also making a distinction between a modern IT estate and one ready for artificial intelligence.
