Australian Public Sector AI Adoption Ramping Up, Yet Progress Hampered by Fragmented Systems and Data

SYDNEY, Feb. 3, 2026 /PRNewswire/ -- New research from Appian (Nasdaq: APPN) reveals AI adoption in the public sector has gained rapid traction, with 70% of public sector workers reporting AI is now integrated into their daily tasks, a significant jump from 58% just one year ago. This places the public sector close behind large private enterprises, which continue to lead the market with an 82% AI adoption rate, according to Australian Government figures.

Further indicating the Australian public sector is increasingly ready to leverage AI-driven automation, the Appian survey of 500 Australian public sector workers, found that 68% are confident in understanding the AI tools used in their roles. This compares to just 59% in 2024.

"AI has the potential to revolutionise public sector processes, connecting siloed systems and automating routine tasks," said Luke Thomas, Area Vice President Asia Pacific and Japan at Appian. "It's really encouraging to see public sector workers becoming increasingly engaged with AI technologies as part of their daily roles. This can free up valuable time for staff to focus on more meaningful work and engage more effectively with citizens."

However, Thomas cautions that many organisations continue to fall into the trap of implementing AI as isolated add-ons, such as standalone chatbots or copilots. "This kind of fragmented AI adoption doesn't deliver the widespread improvements in productivity or resilience that public sector leaders are looking for."

Digital growth across the public sector

The Appian research shows continued acceleration of digital transformation across Australia's public sector. A substantial 87% of public sector workers say their organisation has implemented new digital initiatives over the past five years.

These new digital tools appear to be having an increasingly positive impact on public sector workers, with 81% reporting that digital transformation projects have improved collaboration and communication within their department or agency (compared to 64% in 2024). In addition, 86% reported that digital transformation has made public services more accessible to citizens, up from just 63% in 2024.

"The public sector manages enormous volumes of information, and workers face constant pressure around data management, compliance and administration," said Thomas. "It's really positive to see continued investment in digital tools translating into real improvements for staff and making public services more accessible for citizens."

Disconnected data still a challenge

Digital progress, including AI, is being undermined by one big challenge: worsening system and data fragmentation. Appian's research found that 72% of public sector workers report struggling with separate, disconnected databases within their organisation, a sharp rise from 56% in 2024.

The downstream impact is clear, as 64% of staff acknowledge that these disconnected databases have reduced collaboration within their department or agency (up from 49% in 2024). Additionally, 53% of workers find themselves working with incomplete, inaccessible information due to data siloes.

"The rise in digital tools alongside growing system fragmentation shows that many public sector organisations are rolling out technology in isolation rather than integrating it in a way that streamlines processes and connects information," Thomas said.

"As a result, AI is falling short, but it's not because of the technology itself. It falls short when organisations layer new tools on top of disconnected data, legacy systems and manual handoffs — conditions that make it impossible for technology to deliver its full value."

A path forward

For the Australian public sector to realise the full return on its digital and AI investments, departments will need to shift focus from individual tools to the broader organisational value these technologies can unlock. This means looking beyond isolated deployments and instead understanding which end-to-end processes are most critical to service delivery, workforce efficiency and citizen outcomes.

"We encourage organisations to start with their processes, not the technology," Thomas said. "Identify where the bottlenecks, delays and pain points sit. Only then can you determine where AI and other new technologies will meaningfully improve the process and deliver lasting impact."

Methodology:

Appian commissioned Zoho research to survey 500 Australian public sector workers in Q4 2025.

About Appian

Appian provides process automation. We automate complex processes in large enterprises and governments. Our platform is known for its unique reliability and scale. We've been automating processes for 25 years and understand enterprise operations like no one else. For more information, visit appian.com. [Nasdaq: APPN]

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SOURCE Appian