Survey reveals business leaders’ 2024 priorities and their take on new Government

Datacom managing director NZ Justin Gray.

A study of 200 senior business leaders has found optimism about the new Government and the year ahead but a sense of sluggish AI uptake, a low priority for customer service in the current tight economic environment and decidedly mixed attitudes to ESG (environmental, social and governance).

The survey of 200 c-suite executives, senior managers and IT managers at firms with more than 100 staff was carried out from December 14-18 last year by Curia Market Research for Datacom.

“Off the back of both the change in government and after a challenging few years with Covid, businesses are getting back into a growth mindset,” Datacom managing director NZ Justin Gray said.

The higher up the food chain the leaders were, the greater their level of confidence.

Overall, the survey found high levels of business confidence, with 71 per cent of respondents saying they believed there would be greater opportunity for New Zealand businesses to thrive under the new Government, while 65 per cent believed their industry or sector would be championed or receive better support.

Chief executives emerged as the most optimistic group, with 93 per cent expressing confidence in the new Government’s potential positive impact on their organisations.

Top business priorities for 2024

Respondents rated the top business priorities as:

• Growth: 35 per cent
• Staff retention and recruitment: 24 per cent
• Workplace productivity: 19 per cent

This was the first annual survey but in the case of Datacom’s own hiring and its industry as a whole, recruitment had got easier after the Covid crunch.

“A couple of things have changed,” Gray said.

“Obviously, immigration’s come back. But I think the pandemic forced the sector to focus a bit more on the development of tech talent and alternative pathways into tech - and I think that work’s starting to pay off, with skills a bit easier to get than they were 12 or 18 months ago.”

In Datacom’s case, its initiatives include working with Take2, a non-profit that trains prisoners with software skills to help with their rehabilitation and employment after release; and TupuToa, which aims to get more Māori and Pasifika people into senior positions in corporate NZ, starting with internship and cadetship programmes that help companies diversify their workforces.

Will those programmes continue now the recruitment squeeze is easing?

“I think we will,” Gray said. “We’re really proud of the partnerships we’ve created, and the pathways for people from all parts of our community into tech. It’s not only good for the individual but it makes for a stronger and more resilient tech sector.”

Top tech priorities for 2024

Respondents were also asked which technology they expected to deliver the biggest opportunities to their business in the coming year.

The top three were:

• Data-driven insights to support decision-making (33 per cent)
• Workforce enablement tools: 23 per cent
• Generative AI and digital skills training: 20 per cent

Asked about their organisation’s top IT priorities for 2024, the leading three were identified as

• Data: 34 per cent
• Automation: 31 per cent
• Cybersecurity: 25 per cent

Datacom’s separate AI Attitudes Research, released in August last year, found 48 per cent of respondents were using AI in their business. 49 per cent were not. The balance weren’t sure. Similar research carried out by Datacom across the Tasman found 72 per cent of Australian organisations were already using AI in their business.

“New Zealand is a bit behind Australia and other leading countries in adoption of AI,” Gray told the Herald.

“There’s an analogy here with where cybersecurity was a few years ago, when it wasn’t really in people’s consciousness. Now it very much is. I think AI’s still got to go on that journey.”

His comments echo those of tech and venture capital industry veteran Greg Cross. The Soul Machines co-founder, who divides his time between NZ and the US, told the Herald he’d been struck by how far behind Kiwi businesses were in AI.

ESG results mixed

ESG (environmental, social and governance) and climate response activities and commitments were mixed.

More than three-quarters of all businesses (76 per cent) had not made a commitment to being net carbon neutral by a specific date. Of those that had, 7 per cent were “by 2030″ and 6 per cent were “beyond 2035″.

More companies with 100-199 employees had a clear and measurable ESG strategy in place (64 per cent) compared to just 53 per cent of companies with 200-plus staff.

Customer service was also well down the list.

Gray also cautioned against overlooking the customer experience in the rush for growth and productivity.

“It was concerning to see customer experience falling so low in business priorities (6 per cent) but notable that this jumped back up to 18 per cent among c-suite respondents. We all know it is important but when the focus turns to growth and bottom lines, customer experience can get overlooked. In the medium to long term a lack of focus on customer experience is going to be a handbrake for growth.”

A tech booster, but a smaller tech buyer

As our largest homegrown IT services firm, with $1.49 billion in revenue in the year to March 2023 and 6650 staff, how does Datacom see the incoming Government hitting its sector?

Gray notes that new Technology Minister Judith Collins has set the goal of doubling the size of the sector by 2030 - something his firm more naturally supports.

But the Crown is also - by far - NZ’s largest buyer of IT services.

In the immediate future, could that mean some short-term pain as most Government departments and agencies are asked to cut their spending by 6.5 per cent.

And tools have already been downed on several major projects associated with the previous Government that are now being scrapped, including the $532 million in IT enablement for Three Waters and a $220m digital transformation programme for Te Pūkenga (the entity created by centralising polytechs which is now set to be devolved back to eight or 10 technical institutes).

“The Government’s still talking about the digitisation of more government services,” Gray said.

“We’re seeing them talking about finding efficiencies in the way that services are delivered to citizens. And we think technology is an enabler in those priorities as well. So while they’re looking for efficiencies in how budgets are being spent, I still think tech’s got a big part to play in some of what the priorities are for the incoming Government.”

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.