Almost every organisation is experimenting with AI. Far fewer are seeing results.
Research from MIT, The GenAI Divide: State of AI in Business 2025, found that 95% of generative AI pilots stall at an early stage and never reach scaled adoption. Meanwhile Flexera’s 2026 State of the Cloud Report found that 81% of organisations now use generative AI. Adoption is high. Return is not.
Why pilots stall
The MIT researchers found that failure has less to do with the quality of the AI models than with how organisations use them. Three patterns stand out.
- AI is bolted on, not built in. Pilots sit beside the way work is done, rather than inside it, so they never change the process.
- The data is not ready. AI is only as good as the information it can reach. In Flexera’s survey, data quality was the second biggest challenge for cloud-based AI, and security and compliance the first.
- Investment goes to the wrong places. The MIT study found the strongest returns in back-office operations, such as process automation and reduced outsourcing, yet more than half of AI budgets go to sales and marketing.
The study also found that tools bought from specialist partners succeed about twice as often as those built entirely in-house.
Five steps from pilot to result
- Start with a business problem, not a tool. Choose a process where speed, accuracy or cost clearly matter, and define what success looks like before you begin.
- Fix the foundations. Bring data together, clean it and decide who can access it. AI built on fragmented data produces fragmented answers.
- Govern it from day one. Agree how AI is approved, monitored and audited, especially in regulated sectors.
- Put it where the work happens. Embed AI into existing systems and workflows, so people use it without changing how they work.
- Keep people in the loop. The best results come when AI handles the volume and people provide judgement, context and accountability.
AI that earns its place
At Citycom, AI is not a separate project. It runs through everything we manage. Ark Intelligence, our AI-first platform, connects Cloud, Infrastructure, Security and Communications into one real-time view, so AI works with your data, your context and your governance.
Powered by AI. Guided by people.
If moving AI from pilot to results is on your board’s agenda, let’s talk. Start a conversation at citycom.co.uk or call 0330 912 1212.