New Zealand firms see AI boost but scaling hurdles remain

Most New Zealand organisations using artificial intelligence report a measurable positive impact on their operations, though challenges remain in scaling adoption across entire enterprises, according to new research from Datacom.

The 2025 State of AI Index, which surveyed 200 senior business leaders, indicates that 88 percent of organisations using AI believe it has benefited their business. Of these, 20 percent have recorded significant productivity gains, defined as at least a 25 percent saving in time or an equivalent rise in output. A further 28 percent report moderate improvements between 10 and 25 percent, while 35 percent cite minor enhancements.

The survey found that 87 percent of New Zealand organisations are now using some form of AI in their operations, a substantial increase from 66 percent in 2024 and 48 percent in 2023. Among businesses with over 200 employees, AI usage stands at 92 percent.

Productivity at the forefront

Productivity improvements are highlighted as the primary benefit of AI investment, with 89 percent of AI users reporting some level of gain in this area. Organisations also identified benefits such as improved decision-making and insights (42 percent), cost reduction (30 percent), staff enablement and retention (29 percent), and enhancements to customer experience (26 percent).

Common uses for AI include automation of repetitive tasks (68 percent), data analytics and reporting (54 percent), workflow optimisation (51 percent), and both customer and employee experience improvements (32 percent). Overall, 16 percent of respondents said they were using AI to fundamentally transform a core aspect of their business or services.

"The business case for AI is increasingly clear and it is encouraging to see New Zealand organisations capitalising on the benefits AI offers," says Datacom New Zealand MD Justin Gray.

Gray observed a maturing approach among New Zealand organisations regarding the implementation of AI, adding, "We're also seeing organisations starting to think in a more long-term way about AI, so they are having conversations with our team about data readiness, whether they have the right cloud environment to managing the increasing data demands, and about the interfaces between their existing applications and AI."

He noted that Datacom itself has integrated more than 90 internal AI productivity tools and has restructured its digital engineering services to incorporate both AI agents and human software engineers. According to Gray, this model has allowed legacy systems to be rebuilt in much shorter timelines, delivering savings for customers in the range of 30 to 50 percent.

Scaling remains limited

Despite the growth in adoption, only a minority of organisations have scaled AI at an enterprise level. One-third of those surveyed said their use of AI was confined to departmental activities, with just 12 percent deploying AI throughout their entire business. A further 8 percent described their use of AI as transformative to core operations, while 46 percent classified their efforts as 'exploratory', typically confined to pilot projects.

Datacom Director of AI Lou Compagnone stated, "We have seen significant progress in the past year, with some organisations moving from experimenting with genAI to rolling out agentic solutions in the space of 12 months."

He added, "What we would like to see is more organisations having the ability to scale AI and being able to operationalise it in their organisation. That might look like setting up an AI council that has cross-functional representation across the organisation, so they have visibility and coordination over their AI initiatives.

"AI is moving fast so organisations need to set themselves up to be responsive – you can't have a static AI strategy."

Barriers to wider adoption

The report also identifies barriers hindering further scaling of AI solutions, including a lack of internal skills or capability (32 percent), challenges with data quality and integration (22 percent), and uncertainty regarding governance and regulation (16 percent). Resistance among staff and lack of buy-in were cited as additional obstacles.

The research noted that only 46 percent of organisations have provided AI skills training in the last six months, with another 10 percent offering some training over the past year. Twenty-eight percent indicated they are planning to conduct training in the near future.

Organisations are also seeking greater guidance in their AI journey, with 55 percent looking for industry best-practice frameworks and 40 percent seeking access to external training opportunities. Internally, 55 percent have established an AI policy, but only 29 percent reported having formal ethics or safety guidelines in place.

Ongoing risk concerns

Concerns persist around AI risks, with 52 percent of leaders identifying "shadow AI" - the use of unapproved AI tools - as a problem in their workplace. A significant majority (80 percent) expressed uncertainty regarding the broader implications of AI, while 57 percent cited apprehensions about the potential for losing control over AI systems.