Artificial intelligence is everywhere, but we can make careful decisions about how we use it.
photograph: 123rf
Many mid-sized businesses in New Zealand are yet to realize a return on their AI investments.
A survey of 500 business leaders commissioned by business software company MYOB showed New Zealand lags behind Australia in realizing productivity gains through AI-driven processes.
MYOB Executive General Manager Paul Voges said: “Large companies continue to move forward as small and medium-sized businesses have built a less solid foundation across the key pillars that enhance their benefits from AI, including integrated data systems, digitized core processes, structured training and clearer guardrails.”
“New Zealand’s mid-sized businesses have consistently shown real ambition and drive when it comes to improving performance through technology. The data shows that all the fundamentals need to come together to deliver real productivity gains. At the moment, the engine is only firing half the cylinders.”
The report shows Australian businesses are successfully combining five pillars of success: process, data, AI strategy, AI governance and workforce capabilities.
“Companies with hard data but low workforce capabilities, or with AI tools without proper governance, are not future-ready, but partially prepared but still severely constrained,” Voges said.
“Too many midsize companies are held back not by a lack of appetite for AI, but by efforts to improve their foundations.”
The data also shows that many local businesses struggle with cybersecurity and data privacy concerns (43%), followed by skills and ability to change (40%) and governance, risk and compliance (32%).
About a third (30%) say cloud and integration readiness is a barrier, and about the same number say a lack of standardized processes is holding them back.
“What we’re seeing across the data from A/NZ’s comprehensive perspective is that businesses using legacy systems appear to be getting less benefit from AI, with the overwhelming majority of these businesses reporting time savings as a key benefit,” he 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.”
Investments in key pillars drive productivity gains
Voges said companies that invest in the fundamentals of AI are reaping commercial benefits.
In addition to time savings (46 percent), almost a third (30 percent) of decision makers believed that AI increased or contributed to sales growth, and 27 percent reported improved profit margins, although the proportion reaping financial benefits increased with business size.
More than a third (37%) of businesses with 100 or more employees reported improved profit margins, compared to just 11% of businesses with 20-49 employees. Similar disparities emerged in broader performance measures.
“The opportunity now is to enable more New Zealand mid-sized businesses to close that gap, reap the same benefits and drive real productivity,” Mr Voges said.
“These businesses are an important part of New Zealand’s economy and if we can help more businesses get on the right footing, the ripple effect across the economy can be significant.”
Sign up for Ngā Pitopito Korero. Our daily newsletters, hand-picked by our editors, delivered straight to your inbox every weekday.
