Eighty-eight percent of organisations using AI say it has had a positive impact on their operations.
Among the organisations experiencing a positive impact from AI, 20 percent report significant productivity gains, defined as 25 percent or more time saved or output increase.
A further 28 percent report moderate gains of between 10 and 25 percent, and 35 percent report minor improvements.
The results come from Datacom’s 2025 State of AI Index – drawing on a survey of 200 senior business leaders – which also shows that 87% of New Zealand organisations are now using some form of AI in their operations, up from 66% in 2024 and 48% in 2023.
AI usage among New Zealand businesses with 200+ employees is 92%.
Productivity improvements are the most widely reported return on investment from AI with 89% of AI users reporting ‘productivity gains’. Other reported benefits include enhanced decision-making and insights (42 percent), cost reduction (30 percent), staff enablement and retention (29 percent), and improved customer experience (26 percent).
The most common applications of AI are automation of repetitive tasks (68 percent), data analytics and reporting (54%), workflow optimisation (51 percent), and customer or employee experience enhancement (32%). Sixteen percent of organisations say they are using AI to transform a core aspect of their operations 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.
“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.”
Gray says Datacom itself has integrated over 90 internal AI productivity tools and transformed its digital engineering services with a model that uses a hybrid workforce of AI agents and human software engineers to help rebuild legacy systems in much shorter timelines, delivering costs savings for customers of between 30-50%.
While AI usage is picking up at pace, 33 percent of respondents identified their organisations as implementing AI at a departmental level and just 12 percent reported scaling AI across their entire organisation.
Just 8 percent of respondents identified their organisation as using AI to transform their core operations, while 46 percent described their AI usage as being in the exploratory phase, for example with AI pilot projects.
“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,” says Datacom Director of AI Lou Compagnone.
Compagnone notes that scaling AI is the next challenge for New Zealand organisations with some getting stuck in the pilot phase.
“There is a difference between being able to pilot AI and scale it successfully across your organisation. Creating a proof of concept with today's consumer AI tools is relatively straightforward, but productionising these solutions reveals critical challenges around data readiness, system integration, security and long-term maintainability.”
Compagnone says the focus for organisations needs to be developing the ability to scale AI and being able to operationalise it effectively in their business.
“That might look like setting up an ‘AI Centre of Enablement’ or an AI council that has cross-functional representation across the organisation, so they have visibility and coordination over their AI initiatives.”
“Success in AI implementation requires having a clear vision for the role AI will play in achieving business objectives, backed by a comprehensive AI strategy with clearly defined initiatives. This strategy should address key pillars such as optimisation of business functions, AI technical foundations, data governance, and talent development,” says Compagnone.
“Organisations that move beyond experimental projects to establish these strategic frameworks are the ones that will truly transform their operations with AI. Rather than isolated use cases, they create an ecosystem where AI solutions can be developed, deployed and managed at scale, with appropriate governance and measurable business outcomes.”
Barriers to scaling AI include a lack of internal capability or skills (32 percent), data quality or integration challenges (22 percent), and uncertainty around governance or regulation (16 percent). Staff resistance and lack of internal buy-in were also cited.
Despite the rapid evolution of AI, just 46% of New Zealand organisations have provided AI skills training in the past six months and 10% have provided some training in the past year. A further 28% "are planning to” provide training.
The report highlights a need for support, with 55 percent of organisations seeking industry best-practice frameworks and 40 percent looking for access to external training. While 55 percent of organisations have an internal AI policy in place, only 29 percent have formal ethics or safety guidelines.
Concerns remain around AI risks, with 52 percent of leaders identifying “shadow AI” – the use of unapproved tools – as a problem in their organisation. Another security concern for respondents was not knowing what implications AI might have (80%) and uncertainty around control, or loss of control, of AI (57%).
AI IMPACT IN NEW ZEALAND
