Cisco reveals just 19% of NZ firms ready for AI uptake
Cisco has released findings from the AI Readiness Index in New Zealand, indicating that only 19% of organisations are fully prepared to harness the capabilities of AI technologies.
The research was based on a survey of 3,660 senior business leaders responsible for AI integration from organisations with at least 500 employees across 14 markets in the Asia-Pacific, Japan, and China region. The AI readiness of companies was assessed across six pillars: strategy, infrastructure, data, governance, talent, and culture.
AI strategy has become a critical component of business operations, with 97% of New Zealand companies noting increased urgency to adopt AI technologies in the last year, largely driven by CEOs and senior leadership teams. A significant portion of IT budgets is being directed towards AI, with 42% of organisations allocating between 10% to 30% of their budget to AI implementation.
Despite this increase in AI investment, the anticipated returns have not materialised as expected. Many companies have not achieved their goals in areas such as cybersecurity, IT infrastructure, and data analytics and management.
Jessica McFadden, New Zealand Country Manager at Cisco, stated, "As companies accelerate their AI journeys, it's critical they adopt a comprehensive approach to implementation and connect the dots to link AI ambition with readiness. The AI Readiness Index reveals that to fully leverage the potential of AI, companies need a modern digital infrastructure capable of meeting evolving power needs and network latency requirements from growing AI. This must be supported with the right visibility to achieve their business objectives."
She further remarked, "Whilst it's great to see New Zealand leap ahead in some ways related to AI Readiness, overall we're still significantly at risk when you consider that only 19% of respondents are found to be fully ready to capture AI's potential. We must continue our innovation, uptake and growth of AI to remain in the top position."
The report identifies infrastructure as a notable challenge, highlighting issues in computing, data centre network performance, and cybersecurity. For many businesses, the results of AI investments have not yet met their expectations, with almost half indicating little to no gains from these investments.
There is significant pressure from leadership to succeed in AI initiatives. According to the survey, 52% of CEOs and leadership teams, along with 36% of boards of directors and 30% of investors and shareholders, are at the forefront of driving AI technology implementations. This urgency is expected to lead to a substantial increase in IT budget allocations for AI, with 36% of organisations planning to dedicate over 40% of their IT budget to AI in the next four to five years.
To address current challenges, 53% of companies have identified the improvement of IT infrastructure scalability, flexibility, and manageability as top priorities.
The report further underlines a widespread skill shortage as a critical barrier hindering AI adoption across infrastructure, data, and governance. Companies acknowledge the need for skilled professionals to drive AI initiatives forward.
"As the race to adopt AI picks up pace, talent will be a key differentiator for companies. There is already a shortage of skilled talent across various aspects of AI. This means companies will need to invest in their existing talent pool to meet the growing demand. At the same time, it is crucial that all stakeholders – the private and public sectors, educational institutions, and governments – work together to develop local talent so that the entire ecosystem can benefit from the immense potential that AI offers," commented McFadden.
