Big Jump In AI Usage In Kiwi Companies, But Guardrails Still Not In Place

Two thirds of New Zealand companies are now using some form of AI, up from 48% of companies in 2023.

Among the New Zealand companies using AI, 88% have introduced AI into their organisation within the last two years.

The results come from Datacom’s “State of AI Index: AI Attitudes” research, which is now in its second year and draws on a survey of 200 senior managers in New Zealand businesses.  

The research shows there has also been a significant positive shift in attitudes towards AI with 70% of respondents describing AI as being “exciting, I support it”, up from just 47% identifying with that sentiment in 2023. 

Over two-thirds (71%) of respondents believe the successful adoption of AI in New Zealand will drive economic advantages and new revenue opportunities. 

Of those already using AI in their organisation, 80% described AI as having a positive impact on business operations. Just 2% believed AI had not had a positive impact and 18% were unsure. 

AI confidence is growing too – 61% of respondents feel well-educated on the security risks associated with AI, compared to just 36% from last year. 

“It’s positive to see New Zealand businesses realising the benefits of AI and feeling more confident in their understanding of AI risks and opportunities,” says Justin Gray, Datacom Managing Director New Zealand. 

AI use cases growing rapidly

“We are seeing more companies identifying relevant AI use cases for their business and to date a lot of these use cases are centred on automation and data analytics. There’s still a lot of scope to see greater use of more complex AI solutions in areas like employee productivity, customer service, and supporting complex decision making.”

The research identified the most common applications of AI in New Zealand businesses as the automation of repetitive tasks and processes (24%), big data analytics and synthesis of insights (17%), and workflow automation and optimisation (15%). 

Other uses of AI include improving employee and customer experiences and helping inform innovation and strategy development. 

Datacom’s Director of AI, Lou Campagnone, says a lot of companies are still looking for help to identify where to use AI in their organisation. 

“We’re identifying new opportunities for AI on a monthly if not weekly basis. In our own payroll business, Datapay, we’re using AI and machine learning for anomaly detection to improve the compliance of payroll and leave calculations and to reduce the impact of common payroll errors. The team has also just launched a new Payroll Assistant which helps trained payroll professionals do their jobs by providing safe, intelligent access to the full body of payroll regulations.” 

While AI usage is up, Gray says it is concerning that the implementation of AI governance, policies and training remains “stubbornly low.”

AI governance and policies still lacking

Among businesses that are using AI, only 13% have audit assurance and governance frameworks, while only 48% have staff policies for AI usage and just 33% have awareness training for staff. Commercial and financial targets for the use of AI also remain low with just 11% of respondents having these in place. 

“Governance, policies and AI targets are an area where we have got to get better,” says Gray. “There is huge potential for AI to transform the way we work, alleviate some of the repetitive work that can monopolise our time and make our teams more productive, but we need the guardrails in place to ensure we’re using AI safely and responsibly.” 

Gray says these guardrails don’t have to be restrictive or exhaustive, but they need to provide clarity for the business around key issues such as AI risks and how these are being managed, and acceptable use of AI and of the data being used by AI tools and applications. 

“A paper released last month from the Office of the Minister of Science, Innovation and Technology has indicated that the Government will take a ‘light-touch, proportionate and risk-based approach to AI regulation.’ That’s arguably a valid approach for us all – AI is moving quickly so we can’t be too prescriptive or narrow with our policies and governance, but ignoring it isn’t the answer.” 

“Over the past year, in talking to our customers and partners about AI we’ve emphasised the importance of identifying use cases that make sense for your business. Looking at the latest results, it’s clear we need to add to that advice: having targets is the smart way to ensure your investment in AI is paying off.” 

“It is critical that AI is not seen as an ‘add-on’ but is built into overall business strategy. Organisations need to be clear about the benefits that are being targeted and that can only happen if AI is part of your strategy and not an afterthought.”

Better data management needed

Gray says data management and governance is another area that New Zealand businesses need to pay attention to if they want to reap the benefits of AI.

Earlier this year, Datacom released research which highlighted issues with ‘dirty data’ or data quality, with 30% of New Zealand companies believing as much as half or more of their broad data set has issues, including having duplicates or being outdated, insecure, incomplete, inaccurate or inconsistent. Only 9% considered all their data to be “clean.”

“The quality of AI outputs is wholly dependent on the quality of data that is available – garbage in, garbage out. For example, AI can be a powerful predictive tool and can identify patterns and trends within your business that you can use to guide strategic decisions, but if the data is off, then the AI analytics will be too.” 

Gray says as AI adoption picks up pace, the speed at which data will be produced and collected will increase significantly and businesses already using, or planning to use, AI need to put serious consideration into how their data is managed, stored and protected as the volume grows. 

“Organisations that are still reliant on on-premise servers, for example, need to start planning for the rapid data growth that increased AI usage will inevitably bring. This includes looking at back-up options for data storage now.”

He notes options like Datacom’s data centres offer a secure, reliable environment that can scale as data demands grow.  

Lack of AI expertise a barrier to adoption

The latest State of AI Index research showed mixed results when it comes to how organisations are approaching the need for specialised AI staff and resources.

Among New Zealand organisations that are using AI, only 39% have dedicated, skilled resources to manage it.

Among organisations that are not yet using AI, the number one reason given for not using it – by 43% of respondents – was that they are “waiting for AI expertise to become more widely available.” The other two top reasons were “no use case” (29%) and “waiting for technology to mature” (27%). 

Despite AI expertise being a stumbling block to AI adoption, the research suggests experience with AI is not yet a decision factor in hiring decisions. 

Only 16% of respondents said it was a preference that new employees should have existing experience in using AI tools or technology while 75% said it was not a factor. 

The State of AI Index: AI Attitudes research findings are based on a survey of 200 senior business leaders (C-level, senior manager, IT manager) in New Zealand organisations with 100 or more employees. The survey was conducted in July 2024 by Curia Market Research.

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