Nearly all New Zealand organisatons are now using AI – but only 16% say it has revolutionised their business. Nearly half say they are still at an exploratory phase. Image / Getty Creative
Nearly all New Zealand organisatons are now using AI – but only 16% say it has revolutionised their business. Nearly half say they are still at an exploratory phase. Image / Getty Creative
Artificial intelligence uptake has surged, according to Datacom’s third annual State of AI Index – a survey of 200 senior managers across a wide range of New Zealand businesses, carried out by Curia during July.
Artificial intelligence (AI) adoption stood at 39% in the first survey in 2023. Last year,it rose to 66%. This year, 88% had adopted the new technology, which rose to 92% for organisations with more than 200 staff.
But although adoption is wide, it’s not particularly deep.
Only 16% of respondents said AI is revolutionising a core part of their operations, while just under half said they were still at an “exploratory” phase.
A third were using AI at a departmental level. Just 12% had deployed it through their entire organisation.
The top barriers range from lack of internal capability (32%) to data integration challenges (22%) and regulatory uncertainty (16%).
Uncertainty around governance, staff resistance and lack of internal buy-in were also cited.
Fifty-two per cent of leaders identified "shadow AI" – the use of unapproved tools – as a problem in their organisation. Image / Getty Creative
As with any new technology, there’s an element of BYO chaos. Just over half (52%) of leaders identified “shadow AI” – the use of unapproved tools – as a problem in their organisation.
Another security concern for respondents was not knowing what implications AI might have (80%) and uncertainty around control, or loss of control, of AI (57%).
As New Zealand’s largest homegrown IT services firm, with more than 5000 staff, Gray said he was starting to see agentic AI in the market (that is, an AI that can make its own decisions, within defined parameters).
He said Datacom itself had integrated over 90 internal AI productivity tools, including an in-house-developed payroll assistant – which has passed a payroll exam and is now being sold to other companies.
But for now, in most places, AI is being used in a more meat-and-potatoes fashion.
The most common applications of AI are automation of repetitive tasks (68%), data analytics and reporting (54%), workflow optimisation (51%) and customer or employee experience enhancement (32%). Just 16% of organisations say they are using AI to transform a core aspect of their operations or services.
Skills constraint
Skills are becoming a constraint as companies look to move up the AI food chain.
“You don’t need everybody in your business to be an AI expert,” Gray said.
“But what you do need is leaders and people across the business to be AI-literate.
“They need to be able to spot the opportunities and where AI can be embedded for value and be working on those use cases – so you can rely on a centre of enablement or something like that to drive the adoption and drive the implementation of different AI tools.
“If you don’t adopt it relatively widely, you’ll be left behind.”
The Government’s recently released AI strategy identified a skills gap, but not how it would be addressed.
Venture capitalist Serge van Dam likened it to a travel itinerary that involved booking a flight “without knowing the destination, the airline, the time or the airport you’re flying from”.
Gray is more diplomatic, calling the strategy document, “a good starting point for a dialogue that has to continue”.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
