The way in which artificial intelligence (AI) is used in New Zealand businesses is evolving rapidly, with a significant rise in adoption over the past year, according to a new report.
Datacom’s latest “State of AI Index: AI Attitudes” research, which surveyed 200 senior managers, reveals that AI usage among Kiwi companies has surged to two-thirds, up from 48 percent in 2023. This increase reflects a broader trend of organisations integrating AI tools, with 88 percent of AI adopters having introduced these technologies within the last two years.
The study highlights a notable shift in attitudes towards AI. In 2024, 70 percent of respondents described AI as “exciting” and expressed strong support for its use, a considerable increase from 47 percent in the previous year. This growing enthusiasm is matched by optimism about the economic benefits of AI, with 71 percent of respondents believing it will drive economic advantages and new revenue opportunities.
Justin Gray, Datacom’s Managing Director New Zealand, remarks on the positive outlook: “It’s encouraging to see New Zealand businesses recognising the benefits of AI and gaining confidence in their understanding of AI risks and opportunities.”
The research also outlines how AI is being leveraged across various sectors. Common applications include automating repetitive tasks (24 percent), big data analytics (17 percent), and workflow optimisation (15 percent). AI is increasingly used to enhance employee and customer experiences, inform strategic decisions, and drive innovation.
Datacom’s Director of AI, Lou Campagnone, says, “Companies are identifying more AI use cases for their businesses, with a strong focus on automation and data analytics. However, there remains significant potential for AI in areas like employee productivity and customer service.”
Campagnone highlights practical examples of AI integration, such as in Datapay, where AI and machine learning are employed for anomaly detection in payroll processes.
Despite the increased adoption, there are concerns about the lack of robust AI governance frameworks. The research reveals that only 13 percent of businesses with AI implementations have established audit assurance and governance frameworks.
Furthermore, just 48 percent have staff policies for AI usage, and only 33 percent provide awareness training. The development of commercial and financial targets for AI use is also limited, with only 11 percent of respondents having such targets in place.
Gray emphasises the importance of establishing proper governance: “Governance, policies, and AI targets are areas where improvement is necessary. While AI holds tremendous potential to transform our work and increase productivity, we need to ensure that we use it safely and responsibly.”
Gray also points to a recent paper from the Office of the Minister of Science, ‘Innovation and Technology,’ which suggests a “light-touch” regulatory approach to AI. “This approach seems appropriate given the rapid pace of AI development. However, we must not ignore the need for clear guidelines on AI risks and acceptable usage.”
Effective AI implementation is heavily dependent on the quality of data, as we heard at NZBusiness’ recent AI & Your Business panel discussion. Datacom’s earlier research indicates that 30 percent of New Zealand companies believe a significant portion of their data is problematic – ranging from being outdated to inconsistent. Only nine percent of companies regard their data as completely “clean.”
Gray warns, “AI’s effectiveness is directly tied to data quality. Poor data can lead to inaccurate AI analytics, undermining its potential benefits. As AI usage increases, businesses must address how they manage, store, and protect their data.”
He also highlights the importance of preparing for data growth, suggesting that companies with on-premise servers consider scalable storage solutions.
The research underscores a mixed approach towards AI expertise within organisations. While 39 percent of AI-using companies have dedicated skilled resources, many businesses still lack the necessary expertise. Among non-AI adopters, 43 percent cite a lack of AI expertise as a major reason for not adopting the technology.
Interestingly, the research indicates that experience with AI is not yet a significant factor in hiring decisions, with only 16 percent of respondents preferring candidates with AI experience.
While New Zealand businesses are making strides in AI adoption, there are clear areas needing improvement, particularly in governance, data management, and expertise development. As AI continues to advance, aligning business strategies with responsible AI practices will be crucial for harnessing its full potential and ensuring sustainable growth.
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