Only 9% of organisations in New Zealand are fully prepared to deploy and leverage Artificial Intelligence (AI)-powered technologies, according to Cisco’s (NASDAQ: CSCO) inaugural AI Readiness Index. The Index surveyed over 8,000 global companies and was developed in response to the accelerating adoption of AI, a generational shift impacting almost every area of business and daily life. The report highlights companies’ preparedness to utilise and deploy AI, showcasing critical gaps across key business pillars and infrastructures that pose serious risks for the near future.
The new research finds that while AI adoption has been slowly progressing for decades, the advancements in Generative AI, coupled with public availability in the past year, are driving greater attention to the challenges, changes and new possibilities the technology poses. While 75% of respondents believe AI will significantly impact their business operations, it also raises new issues around data privacy and security. The Index findings show that companies experience the most challenges when leveraging AI alongside their data. In fact, 86% of respondents admit that this is due to data existing in silos across their organisations.
However, there is also positive news. Findings from the Index revealed that companies in New Zealand are taking many proactive measures to prepare for an AI-centric future. Regarding building AI strategies, almost one-third (32%) of respondents were categorised as Pacesetters (fully prepared), indicating a significant focus by C-Suite executives and IT leadership. This could be driven by the fact that most (93%) respondents said the urgency to deploy AI technologies in their organisation has increased in the past six months, with IT infrastructure and cybersecurity reported as the top priority areas for AI deployments.
“The race to AI Readiness is on, with organisations under intense pressure to shift from strategic planning to execution mode in order to capitalise on the transformative potential that AI represents,” said Liz Centoni, Executive Vice President and General Manager, Applications and Chief Strategy Officer, Cisco. “To realise the benefit of AI-powered products and services, companies need solutions that secure and observe their AI models and toolchains to ensure performance, secure sensitive data and systems, and deliver trustworthy and responsible AI outcomes.”
“With an overwhelming majority of companies in New Zealand saying they are not fully ready to leverage AI, coupled with their deep sense of urgency to deploy AI in the coming months, the time to invest in infrastructure with the scalability and flexibility to support AI workloads is now," said Carl Solder, Chief Technology Officer, Cisco Australia and New Zealand.
Alongside the stark finding that overall, only 9% of companies are Pacesetters (fully prepared), the research found that a total of 62% of companies in New Zealand are considered Laggards (unprepared) at 4%, or Followers (limited preparedness) at 58%. Some of the most significant findings include:
· URGENCY: One-year maximum before companies start to see negative business impacts. 65% of respondents in New Zealand believe they have a maximum of one year to implement an AI strategy before their organisation begins to incur significant negative business impact.
· STRATEGY: Step one is strategy, and organisations are well underway. 69% of organisations benchmarked as either Pacesetters or Chasers, and only 7% were found to be Laggards. Additionally, 90% of organisations already have a highly defined AI strategy in place or are in the process of developing one, which is a positive sign but shows there is more to do.
· INFRASTRUCTURE: Networks aren’t equipped to meet AI workloads. 95% of businesses globally know that AI will increase infrastructure workloads, but in New Zealand only 27% of organisations consider their infrastructure highly scalable. Meanwhile, 66% indicate that they have limited or no scalability when meeting new AI challenges within their current IT infrastructures. To accommodate AI’s increased power and computing demands, more than eight in 10 (83%) of companies will require further data centre graphics processing units (GPUs) to support current and future AI workloads.
· DATA: Organisations cannot neglect the importance of having data ‘AI-ready’. While data serves as the backbone for AI operations, but it is also the area where readiness is the weakest, with the greatest number of Laggards (23%) compared to other pillars. 86% of all respondents claim siloed or fragmented data in their organisation. This poses a critical challenge as the complexity of integrating data that resides in various sources and making it available for AI implications can impact the ability to leverage the full potential of these applications.
· TALENT: There is a significant mismatch in leadership and employee expectations concerning AI. Boards and Leadership Teams are the most likely to embrace the changes brought about by AI, with 74% and 81% respectively showing high or moderate receptiveness. However, there is more work to be done to engage middle management where 34% have either limited or no receptiveness to AI, and among employees over a third (41%) of organisations report that employees are limited in their willingness to adopt AI or outright resistant. The need for AI skills reveals a new-age digital divide. While 85% of respondents said they have invested in upskilling existing employees, 22% expressed doubt about the availability of sufficiently skilled talent.
· GOVERNANCE: AI policy adoption’s slow start. 69% of organisations report not having comprehensive AI policies, which must be addressed as companies consider and govern all the factors that present a risk in eroding confidence and trust. These factors include data privacy and data sovereignty, and the understanding of and compliance with global regulations. Additionally, close attention must be paid to bias, fairness, and transparency in both data and algorithms.
· CULTURE: Little preparation, but the high motivation to make a priority: This pillar had the lowest number of Pacesetters (4%) compared to other categories driven largely by 21% of companies have not established change management plans yet. Of those that have, 78% are still in progress. C-Suite executives are the most receptive to embracing internal AI changes. They must take the lead in developing comprehensive plans and communicating them clearly to middle management and employees with relatively lower acceptance rates. The good news is that motivation is high. More than seven out of 10 (72%) say their organisation embraces AI with a moderate to high urgency. Only 3% say they were resistant to change.
