New Zealand mid-sized firms lag on AI readiness, MYOB finds
New Zealand's mid-sized businesses are falling short on the foundations needed for business autonomy, according to research commissioned by MYOB. The study found gaps in workforce readiness, governance and process autonomy despite continued investment in technology and AI.
The survey of more than 500 leaders and decision-makers at New Zealand mid-sized businesses assessed progress across five areas: core processes, data landscape, AI strategy, AI governance and workforce capability. While 66% of firms said they had strong digital processes and 68% reported good data foundations, fewer reported readiness in workforce capability at 56%, governance at 61% and meaningful process autonomy at 55%.
MYOB used the findings to map businesses against what it calls a Business Autonomy Maturity Model, designed to measure both ambition and readiness to scale AI-enabled automation.
Paul Voges, Executive General Manager - Mid-Market at MYOB, said the results showed that progress in individual areas was not enough on its own.
"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 work together. At the moment, the engine is firing on only half its cylinders.
"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. Too many mid-sized firms are being held back not by a lack of appetite for AI, but by the work needed to improve the foundations that sit underneath," Voges said.
Barriers identified
The research identified several obstacles businesses say are limiting progress. Cybersecurity and data privacy concerns were cited by 43% of respondents, making them the most common barrier. Skills and change capacity followed at 40%, while 32% pointed to governance, risk and compliance issues.
Cloud and integration readiness was named as a barrier by 30% of respondents, and 29% said a lack of standardised processes was holding them back. Those constraints broadly align with the areas where the survey found weaker organisational readiness.
The state of core business systems also emerged as a central issue. Only 36% of local mid-sized businesses said they were operating on a modern, cloud-based ERP system. Another 30% said they were running core operations across multiple systems and spreadsheets, while a further 30% remained on desktop or on-premise ERP software.
That fragmented technology environment matters because the survey suggests businesses on older systems are seeing a narrower range of AI benefits than those with more integrated platforms.
"A well-integrated data landscape is a key enabler of AI-driven productivity. What we're seeing across the data from an overarching A/NZ view is that businesses using legacy systems appear to be getting less out of AI, with these businesses overwhelmingly reporting time savings as the key benefit," Voges 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."
Trans-tasman gap
The findings also point to a gap between New Zealand and Australia in how far mid-sized companies have moved from interest in AI to practical integration.
Alex Hooper, Associate Director at Oxford Economics Australia, said businesses in both markets were reporting gains, but New Zealand firms appeared to be at an earlier stage of operational maturity.
"In a period where productivity is such a central focus on both sides of the Tasman, it is encouraging to see that 75% of mid-sized businesses are reporting productivity benefits from AI.
"However, the results also show a divergence in maturity across the two markets. While New Zealand businesses show strong ambition, Australian firms are more likely to have translated that into deeper operational integration, suggesting a faster pathway to realising productivity and commercial benefits.
"Across both markets, businesses appear to be converging on a similar set of priorities for scaling AI and automation. Workforce skills, core system upgrades and data quality are coming through strongly, although New Zealand businesses are more likely to report a need to improve workforce skills and training," Hooper said.
Commercial divide
Even so, the research found that firms with stronger foundations are already reporting more tangible financial effects from AI. Alongside time savings, reported by 46% of decision-makers, 30% said AI had contributed to increased revenue or sales growth and 27% said it had improved profit margins.
Those benefits were not evenly spread across the sector. More than one in three businesses with more than 100 employees reported improved profit margins, at 37%, compared with 11% among firms employing 20 to 49 people. A similar gap appeared in revenue, with 36% of the largest mid-sized firms reporting revenue growth compared with 16% of the smallest.
The same pattern was visible in broader performance measures. Improved quality of outputs was reported by 44% of the largest firms, compared with 19% of the smallest.
Voges said the figures pointed to a widening divide within the mid-market.
"This points to a productivity split opening up within the overall mid-sized business segment," Voges said. "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.
"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. 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."