Misalignment over AI adoption hampers UK mid-market growth

New research by Node4 highlights a misalignment between IT and Business leadership within UK mid-market organisations that is affecting the sector's approach to AI and overall productivity.

The report, Unlocking Growth in the Mid-Market, indicates that both IT and Business leaders cite business expansion and market growth as the principal objectives for the next year. Despite this shared goal, the study reveals notable differences in how each group believes these ambitions should be achieved, particularly in relation to investment in artificial intelligence (AI).

According to the findings, IT leaders are much more enthusiastic about investing in AI and automation compared to their Business counterparts. Investment in AI is among the top two strategies for IT leaders aiming to improve productivity and efficiency. However, AI only just appears in the top five strategies for Business leaders.

The research also shows a disparity in perceptions of how data-driven organisations are, with 48% of IT leaders describing their firms as highly data-driven, in contrast to just 31% of Business leaders who hold the same view.

There is a similar division regarding the potential uses of AI. Nearly 40% of IT leaders see customer experience as a leading area for AI application, and 62% name it as a principal motivation for investing in AI. By contrast, only 29% of Business leaders place customer experience as a key focus, making it the lowest-ranked use case among their group.

This lack of alignment is identified as a root cause for a productivity gap within the mid-market sector, impeding its prospects for growth and stability. Node4's report finds that other areas also suffer from disconnection between IT and Business leaders, including public cloud consumption, cybersecurity strategies, workplace applications, hybrid working, addressing skills shortages, and the engagement with Managed Services Providers.

The report's methodology included a survey of 601 IT and Business leaders across sectors such as finance, private healthcare, retail, manufacturing, professional services, and construction. Respondents represented firms with 500 to 5,000 employees and annual revenues of between GBP £100 million and GBP £1 billion.

One particular area where this misalignment is evident concerns the perception of AI as a tool for gaining competitive advantage. Only 14% of mid-market leaders—10% of Business leaders and 17% of IT leaders—identified competitiveness as a reason to invest in AI. Uncertainty over return on investment (ROI) remains a barrier, with 36% of all respondents and 40% of IT leaders citing unclear ROI as a main reason for hesitation regarding AI adoption.

Richard Moseley, Chief Executive Officer at Node4, commented: "It's clear that the mid-market is in flux. We have uncovered many positives and much potential within the mid-market. There is a desire for improvement, growth, and expansion - and a belief that technology is a key enabler for each. But we have seen areas of overconfidence, complacency, and lack of vision that inhibit the potential of new and existing technology to support these ambitions. This also feeds the productivity gap - a precarious situation in such uncertain economic conditions."

The research also sheds light on cybersecurity, with almost all mid-market organisations expressing confidence in their ability to prevent or respond to cyber-attacks. Nonetheless, the report raises concerns that this confidence may sometimes be misplaced. Nearly 75% of leaders view secure remote and hybrid working as a high priority, yet only around a third report that their organisations have fully resolved data security risks linked to remote operations.

Reflecting on these findings, Richard Moseley added: "By aligning technology investments with strategic priorities, mid-market organisations can navigate economic uncertainties, drive growth, and achieve competitive advantage. Our respondents' insights and data analysis provide a roadmap for Business and IT leaders to collaborate effectively, deploy emerging technologies, and build a prosperous future with the potential to power the UK economy and significantly contribute to the country's GDP."

The research for Unlocking Growth in the Mid-Market: The Node4 Report was independently conducted by Censuswide between 13 and 25 March 2025. The sample included Heads of IT, IT Directors, IT Managers, CIOs, CTOs, CEOs, CFOs, Managing Directors, and Finance Directors. Censuswide follows the Market Research Society code of conduct, ESOMAR principles, and is a member of the British Polling Council.