NZ's mid-sized businesses yet to realise returns on AI investment: Survey

Many of New Zealand's mid-sized businesses are yet to realise a return on investment in AI.

A survey of 500 business leaders commissioned by business software firm MYOB indicates New Zealand was lagging behind Australia in realising productivity gains from AI-driven processes.

"Larger businesses continue to pull ahead because smaller firms haven't built as robust a foundation across the key pillars that strengthen the gains from AI, such as integrated data systems, digitised core processes, structured training, and clearer guardrails," MYOB executive general manager Paul Voges said.

"New Zealand's mid-sized businesses have consistently shown real ambition and appetite when it comes to lifting performance with technology. What the data shows is that unlocking real productivity gains requires all the foundational elements to combine. At the moment, the engine is firing on only half its cylinders."

The report indicates Australian firms were doing a better job of combining five pillars for success: processes, data, AI strategy, AI governance and workforce capability.

"A business with solid data but low workforce capability, or AI tools without the appropriate governance, is not future-ready, it's partially prepared and still heavily constrained." Voges said.

"Too many mid-sized firms are being held back not by a lack of appetite for AI, but the work to improve the foundations that sit underneath."

The data also indicates many local businesses were struggling with cybersecurity and data privacy concerns (43 percent), followed by skills and change capacity (40 percent) and governance, risk and compliance (32 percent).

About a third (30 percent) said cloud and integration readiness was a barrier, and nearly as many said a lack of standardised processes was holding them back.

"What we're seeing across the data from an overarching A/NZ view is that those businesses using legacy systems appear to be getting less out of AI, with these businesses overwhelmingly reporting time savings as the key benefit," he said.

"Those with AI embedded in core systems are reporting stronger and more commercially significant impacts, like revenue growth and improved profit margins, alongside significant time savings."

Investment in key pillars drives productivity gains

Voges said businesses with investment in the underlying foundation for AI were seeing commercial returns.

In addition to time saved (46 percent), almost a third (30 percent) of decision-makers believed AI had contributed to increased revenue or sales growth and 27 percent reported improved profit margins, though the proportion enjoying financial benefits rose alongside the size of the business.

More than one-in-three (37 percent) businesses with 100+ employees reported improved profit margins, compared with just 11 percent of those with between 20 and 49 employees. The same divide showed up across broader performance measures.

"The opportunity now is to enable more of New Zealand's mid-sized businesses to close the gap, access those same gains and drive true productivity," Voges said.

"These businesses are a vital part of New Zealand's economy and if we can help more of them get the foundations right, the flow-on benefits for the wider economy could be significant."

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