Australian universities boost AI spend despite gaps

Forrester has found that tertiary institutions in Australia and New Zealand are increasing investment in artificial intelligence despite major gaps in readiness. The study, commissioned by TechnologyOne, surveyed more than 300 education leaders.

The research points to a disconnect between strategic ambition and institutional preparedness across the sector. Only 21% of respondents said their current systems could effectively support AI-driven work, and just 10% said their student and administrative systems were fully integrated.

Fewer than one in three leaders believe their organisations have the skills and resources needed to make full use of the systems they already operate. That figure was 29%, suggesting workforce preparedness is lagging behind investment plans.

Financial pressures appear to be driving the push into AI. Among those surveyed, 87% identified financial sustainability as a top priority, while 86% pointed to improving student experience and 83% cited recruitment and enrolment outcomes.

The findings suggest institutions are looking to AI to ease both service delivery and administrative strain. Common uses highlighted in the research included handling student self-service enquiries, identifying students at risk, and processing admissions.

Readiness gap

Fragmented systems remain a central obstacle. Nearly half of respondents, or 47%, said disconnected student data limits their ability to provide proactive, personalised support.

Only 11% strongly agreed that their systems deliver a consistent, high-quality student experience across all touchpoints. That points to broader problems in how institutions connect academic, administrative, and support functions across the student lifecycle.

Mark Jones, Executive Vice President for Education at TechnologyOne, said institutions seeing the strongest returns are focusing on core systems and data rather than AI spending alone.

"The institutions generating the greatest value from AI are not necessarily those spending the most. They are the ones investing in connected data, integrated systems and the capabilities needed to turn insight into action. AI can accelerate progress, but it cannot overcome fragmented foundations," Jones said.

The findings come as universities and other tertiary providers face pressure to improve retention and student outcomes while keeping costs under control. AI has emerged as one response, but the survey suggests older technology environments and uneven data structures are limiting how far institutions can go.

Operational focus

Rather than focusing first on more experimental applications, many institutions appear to be targeting immediate operational tasks. Student enquiries, risk identification, and admissions are all areas where automation and data analysis can reduce manual work and improve response times, but they depend on access to connected information.

The research argues that institutions do not need perfect data before they begin using AI. Instead, it points to the importance of building connected, well-governed data foundations while also investing in staff skills and operating models.

That reflects a broader challenge for the tertiary sector, where digital transformation often spans legacy enrolment systems, finance platforms, learning management tools, and student support services. Without tighter links between those systems, institutions may struggle to create the personalised experience many leaders say they want.

Jones said the debate has shifted from whether institutions should adopt AI to how quickly they can produce measurable results.

"The conversation has moved beyond whether institutions should adopt AI to how quickly they can realise value from it. Many institutions are investing in AI because they want to improve student outcomes, retention and operational efficiency. But AI is only as effective as the foundations beneath it. If student data remains fragmented across systems, institutions will struggle to deliver the connected and personalised experiences students increasingly expect," he said.