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Avanade sounds alarm over mid-market approach to AI
Viewing the technology as an opportunity to cut staff and reduce costs is not the right approach, the channel player has warned
Microsoft partner Avanade has been tracking customer reaction to artificial intelligence (AI), highlighting some concerns with the current approach the mid-market is taking to the technology.
The channel player’s quizzing of customers has indicated the primary objective in adopting AI is to help cut costs, with expectations of rapid results in the first year.
That cost-cutting is often at the expense of staff, and the idea there could be a four-times return on investment (ROI) in 12 months is also generating unrealistic expectations among users.
Avanade is recommending the mid-market recognises the importance of valuing their people and using AI to enhance their experiences, ahead of using technology to drive down costs.
One of the main tensions with AI on a cultural level is the idea technology is going to replace humans, and there are signs that many across the mid-market are doing their bit to add to those anxieties.
The Avanade trendlines: AI value report 2025 found that 84% of respondents viewed the primary reason for deploying AI was to uncover cost savings and efficiencies through the replacement of staff.
Avanade’s research found that 80% of those business leaders it quizzed expected AI to affect the number of human roles by the end of 2025. As a result, there were already concerns around employee trust.
Balanced strategy crucial
The firm states that there can be impressive ROI outcomes, but only if there is a balanced strategy of valuing human talent alongside using AI tools.
“AI presents incredible opportunities for organisations, but it’s more than a tech upgrade; it’s a transformative shift in workplace dynamics, and it raises vital questions about the future of work and the role of the workforce,” said Florin Rotar, chief AI officer at Avanade.
“Our data shows that the mid-market must confront these questions directly or risk alienating the very employees who drive their success,” he added. “AI should enhance, not replace, human potential – employees should be seen as collaborators with AI, not mere tool users. Integrating AI thoughtfully, with people at the centre, will be crucial for sustainable business value and will set the standard for success in the AI era.”
There were also concerns that a portion of customers appear to be comfortable allowing AI to make business decisions, and the contribution of the humans working for an organisation could be overlooked.
Additionally, 78% worry that AI could overshadow human contributions, with only one-third feeling very confident that their organisation’s leaders can distinguish between AI-generated and human work.
The consequences of continuing down a route that looks for cost savings at the expense of staff includes lowering morale and creating a rift between those at the top of the organisation and those beneath facing the prospect of being eased out of their jobs by technology.
Previous research by Avanade has exposed AI skill gaps undermining the capabilities of many customers to roll out AI, and the firm has also encouraged users to increase staff familiarity with Microsoft Copilot.
