UK Businesses Struggle To Measure Returns On AI Investment, EY Finds

British companies are reporting significant productivity gains from artificial intelligence but are struggling to measure the financial returns on their investment, according to a survey of UK chief executives by EY-Parthenon.

Half of the 100 CEOs questioned ranked AI tools among their three biggest drivers of productivity improvements over the past year, ahead of business process redesign at 40 per cent and workforce reskilling at 38 per cent.

However, just 14 per cent said they had comprehensive, real-time visibility of AI costs, while 32 per cent reported significant gaps in their ability to assess returns on investment.

The findings suggest that businesses are making progress in deploying AI but face a growing challenge in translating operational efficiencies into measurable financial benefits.

More than a third of respondents, 34 per cent, identified legacy technology and outdated operating models as the biggest obstacles to capturing value from AI, while 29 per cent cited organisational complexity, regulation or increased risk management.

Silvia Rindone, EY-Parthenon’s UK and Ireland managing partner, said businesses were moving beyond initial adoption towards a greater focus on financial performance.

“The AI conversation has shifted from adoption to impact. UK CEOs now want clear evidence that their investment is delivering stronger productivity and measurable business value,” she said.

Despite these difficulties, 44 per cent of CEOs said their companies were reinvesting productivity gains in growth, innovation or transformation.

The most commonly reported benefit was increasing output without additional staff or capital expenditure, cited by 34 per cent of respondents.

AI is also becoming more prominent in corporate dealmaking. Some 54 per cent of CEOs said their companies were piloting the technology to evaluate transactions, while 37 per cent were using it across multiple activities or had embedded it more widely.

Almost half, 48 per cent, were considering mergers and acquisitions over the next 12 months, while 61 per cent were exploring divestments and 59 per cent strategic alliances.

The survey also highlighted concerns about workforce capabilities. Nearly three-quarters of CEOs, 74 per cent, expect skills shortages to become a greater constraint on growth than access to capital within three years.

Almost half, 47 per cent, acknowledged that their organisations were not developing workforce skills quickly enough to keep pace with AI.

Matthew Ringelheim, EY’s UK and Ireland AI and data leader, said AI could improve investment decisions but was “no substitute for sound transaction fundamentals”.

The findings underline the challenge facing companies seeking to justify growing AI expenditure: demonstrating that productivity improvements translate into stronger profitability, investment returns and long-term competitiveness.