New Zealand’s mid-sized businesses lack the foundations needed for corporate autonomy, according to research commissioned by MYOB. The study found that despite continued investment in technology and AI, there are gaps in workforce readiness, governance, and process autonomy.
The survey of more than 500 leaders and decision makers from New Zealand’s mid-sized businesses assessed progress across five areas: core processes, data landscape, AI strategy, AI governance and workforce capabilities. While 66% of companies said they had strong digital processes and 68% reported a good data infrastructure, 56% reported workforce readiness, 61% reported governance, and 55% reported meaningful process autonomy.
MYOB used its findings to map businesses against what it calls the Business Autonomy Maturity Model, designed to measure both ambition and readiness to scale AI-enabled automation.
Paul Voges, MYOB’s executive general manager for midmarket, said the results show that progress in individual areas alone is not enough.
“Small businesses in New Zealand have always shown real ambition and drive when it comes to leveraging technology to improve performance. The data shows that all the fundamentals need to work together to deliver real productivity gains. At the moment, the engine is only firing half the cylinders.”
“Companies with hard data, but with a weak workforce and AI tools without proper governance, will not be ready for the future. They are partially ready, but still severely constrained. Too many midsize companies are held back not by a lack of appetite for AI, but by the work needed to improve their foundations,” Voges said.
Barriers identified
The study identified several obstacles that companies say are impeding progress. Cybersecurity and data privacy concerns were cited by 43% of respondents, making them the most common barrier. Skills and ability to change followed at 40%, followed by 32% pointing to governance, risk and compliance issues.
30% of respondents cited cloud and integration readiness as a barrier, and 29% said a lack of standardized processes was holding them back. These constraints broadly align with areas where the study found weak organizational preparedness.
The current state of core business systems also emerged as a central issue. Only 36% of local midsize businesses say they operate on a modern cloud-based ERP system. Another 30% said they run core operations across multiple systems and spreadsheets, and another 30% still use desktop or on-premises ERP software.
This fragmented technology landscape is important because the study suggests that companies with older systems see less scope for AI benefits than those with more integrated platforms.
“A well-integrated data environment is a key enabler of AI-driven productivity. What we’re seeing across data from A/NZ’s comprehensive perspective is that companies with legacy systems appear to be taking less advantage of AI. Overwhelmingly, these companies report time savings as a key benefit,” Voges said. “Companies that have embedded AI into their core systems are reporting stronger and commercially significant impacts, including increased revenue and improved profit margins, along with significant time savings.”
trans tasman gap
The findings also show a gap between New Zealand and Australia in the extent to which midsize businesses have moved from an interest in AI to practical integration.
Oxford Economics Australia associate director Alex Hooper said while companies in both markets were reporting profits, New Zealand companies appeared to be at an earlier stage of business maturity.
“At a time when there is a huge focus on productivity on both sides of the Tasman, it is encouraging to see that 75% of mid-sized businesses report productivity benefits from AI.
“However, the results also show that there are differences in the maturity of the two markets. While New Zealand companies have shown strong ambition, Australian companies are more likely to translate that into deeper business integration, suggesting a faster path to realizing productivity and commercial benefits.”
“In both markets, businesses appear to be focused on similar priorities when it comes to expanding AI and automation. While employee skills, core system upgrades and data quality are steadily improving, New Zealand businesses are more likely to report a need to improve workforce skills and training,” Mr Hooper said.
commercial disparity
Still, the study found that companies with stronger foundations are already reporting more tangible financial impacts from AI. In addition to saving time, 46% of decision makers said AI increased revenue or contributed to sales growth, 30% and 27% said it helped improve profit margins.
These benefits were not evenly distributed across the sector. More than one in three companies with 100 or more employees reported improved profit margins, 37%, compared to 11% of companies with 20 to 49 employees. A similar gap appears in revenue, with 36% of the largest midmarket companies reporting an increase in revenue, compared to 16% of the smallest companies.
The same pattern was seen with broader performance measures. 44% of the largest companies reported an improvement in the quality of their deliverables, compared to 19% of the smallest companies.
Voges said the numbers show growing inequality within the middle market.
“This shows that there is a productivity divide across the mid-sized business sector,” Voges said. “Large companies continue to make headway as small and medium-sized enterprises have built a less solid foundation across the key pillars that enhance their benefits from AI: integrated data systems, digitized core processes, structured training, and clearer guardrails.
“The opportunity now is to enable more New Zealand mid-sized businesses to close that gap, enjoy the same benefits and drive real productivity. These businesses are an important part of New Zealand’s economy, and the more we can help them get their foundations right, the more the ripple effect across the economy can be significant.”
