And their outdated systems are to blame, warn industry experts.
As AI adoption accelerates across the UK, evidence shows many companies are rushing in faster than their systems, people, and processes can cope, triggering “AI anxiety” from the boardroom to the frontline.
The warning comes amid concern that the UK risks falling behind global competitors. While government strategy aims to deliver nationwide AI skills by 2030, and automation investment continues to surge, analysis shows a widening gap between ambition and readiness. S&P Global Market Intelligence reports AI project failure rates have more than doubled in the last year, with 42% of organisations abandoning most initiatives – a sign businesses underestimate what it takes to become AI-capable.
The root cause is clear: AI is exposing long-standing weaknesses in software estates. Legacy applications, siloed data, and poorly integrated platforms – issues that may have been quietly managed for years – are now under the spotlight due to automation and real-time data demands.
New research from Propel Tech, a UK bespoke software developer specialising in modernising outdated systems, reinforces this trend. Their analysis shows AI often uncovers deeper structural issues: gaps in data quality, ageing architectures, inconsistent documentation, and fragmented information flows, amplifying uncertainty among leaders and employees alike.
The cultural impact is significant. Half of UK adults are already concerned about AI’s impact on jobs, particularly workers aged 25–34, according to Propel Tech and TUC research. At the same time, workers with AI skills enjoy double the wage growth and up to a 56% premium, pressuring organisations to act even if unprepared.
High-profile AI missteps, such as false information, security vulnerabilities, and exposed data, stem not from AI itself but from deploying it on fragmented systems. AI amplifies weaknesses that organisations have ignored for years, showing many corporate systems are unfit for advanced automation.
Unpreparedness goes beyond technology. Employees feel ill-equipped to use AI, business leaders struggle to govern or assess it, and technical teams face integrating AI into systems never designed for real-time data or scalable automation, widening the gap between ambition and operational reality.
Despite this, analysts agree the potential is enormous for companies willing to address fundamentals. AI shows clear benefits in healthcare, manufacturing, logistics, and professional services, where modernised software and integrated data pipelines support automation, insights, and efficient decision-making.
The consensus is clear: without fixing software and data issues, AI will continue to drive anxiety rather than efficiency. Propel Tech suggests organisations prioritise readiness assessments, system audits, and cultural alignment before deploying AI, a preventative approach that reduces risk and increases success.
Andrew Brown, Director at Propel Tech, said: “AI is spotlighting problems that have existed for years. Before adopting AI, businesses need to modernise systems, data flows, and processes. The anxiety isn’t about technology, it’s about readiness. Companies that tackle these foundations now will gain real competitive advantage.”
To help organisations better understand the cultural and technical factors behind AI readiness, Propel Tech has published a free guide exploring current risks, blockers and practical steps for preparing systems and teams for AI adoption.
