Published on the 07/05/2026 | Written by Heather Wright
As boards demand ROI…
New Zealand’s digital leaders say tech adoption has plateaued at about ‘six out of 10’ with concerns from tech business leaders of ‘strategic drift’ and progress slowing as other nations accelerate.
Tuanz’s (Tech Users NZ) 2026 Digital Priorities Report, which is drawn from conversations with nearly 30 CIOs and CTOs, captures some of the frustration IT leaders are feeling at New Zealand, rich in innovation pockets, being constrained by fragmented execution, uneven adoption, rising technology costs and an ongoing shortage of specialist talent. The stagnation comes as other nations accelerate their digital transformation efforts, creating a widening innovation gap, Tuanz says.
“They’re not just going to pile money into new IT systems because it feels like the right thing to do.”
Craig Young, Tuanz chief executive, says the most striking finding in this year’s report was how leaders described the moment New Zealand is in.
“There was a real feeling that New Zealand is at a crossroads – a decision point where we have to decide to do something, or not,” Young told iStart.
That sense of drift is a change from previous years, which were focused more heavily on recovery and reflection following Covid-era disruption.
The plateau reflects a broader tightening of expectations around technology investment, particularly when it comes to AI. Young says AI continues to drive behaviour across vendors and organisations, but boards are no longer prepared to invest without clear evidence of value.
“Things are moving so fast, and AI is having such an impact, that boards are now saying: We need a return on our investment,” he says, acknowledging that is a good discipline to have. “They’re not just going to pile money into new IT systems because it feels like the right thing to do.
“AI might still be the flavour of the month, but CIOs are looking at whether they’re actually seeing value,” he says. “If they don’t see it, they’re prepared to sit where they are.”
The report found many organisations are moving away from building their own tools or running standalone experiments, and instead are prioritising AI capabilities embedded within the platforms they already use, including enterprise SaaS systems.
“What they’re looking to do is make the most of what they’ve already go,” Young says. “If the capability is built into SAP, Saleforce, Zoho, Xero or other services, that’s where the focus is going.”
Young says leaders broadly believe AI can deliver value, but only if it’s implemented properly.
“What we’re hearing is that it’s a mixed bag,” he says. “There are situations where people are finding real value. But it isn’t the hype it might have been a year ago.”
That has pushed digital leaders to get more disciplined, particularly around usage and licensing.
“If someone isn’t using a Copilot licence, take it off them and give it to someone else who will,” Young says. “They’re getting down to that level.”
At the same time, CIOs face pressure from suppliers whose products increasingly bundle AI features as part of standard upgrades, regardless of whether organisations are ready to use them.
“Providers say: You need to upgrade because this has AI in it,” he says. “But CIOs are asking: What’s the value right now.”
They’re waiting for real use cases, he says, adding “We need CIOs and digital leaders to find the use cases and the business cases for the stuff they’ve already go, but then start investigating what else they can invest in. It is a rock and a hard place for some of them.”
The report flags a shift away from broad experimentation toward targeted implementation and clearer business cases – a change Young sees as both necessary and overdue.
“We need to move away from experimentation to real implementation. That means getting beyond personal productivity and into areas where AI can actually automate workflows and drive productivity across the organisation.”
Cost pressures reshape priorities
The tightening of focus is occurring within a broader cost squeeze affecting local businesses. Rising cloud, licensing and infrastructure costs are forcing technology leaders to reassess earlier assumptions – including the long-held ‘cloud-first’ stance.
“Costs keep rising and organisations aren’t always getting the value they expected,” Young says. “So there’s more thinking around where things need to be in the cloud and where it might make sense to keep control over costs.”
He notes that New Zealand’s small market size leaves organisations particularly exposed to pricing decisions made by multinational providers, while global investment in AI-driven infrastructure continues to flow through to customer pricing.
“You’ve got massive investment going into cloud data centres and undersea cables,” he says. “That investment has to be paid for, and ultimately users pay for it.”
A crossroads, rather than a crisis
Despite the slowdown, Young is careful not to frame the findings as a failure of ambition or capability. New Zealand still has strong infrastructure and governance settings, and pockets of innovation continue to emerge.
The concern, he says, is what happens next.
“The key message is that we’re at a cross roads,” he says. “If we’re not careful, we’ll get left behind.”
The report calls for more deliberate choices – by government and by organisations – about how existing technology is used, how value is measured and how digital capability is built.
Among the recommendations for organisations to implement to drive adoption, stabilise their environments and build a resilient culture is a call for organisations to formally pause the deployment of new speculative tools and instead redirect IT and change management resources toward embedding existing platforms into daily workflows.
“By focusing exclusively on training, data cleanup and user adoption of current systems, businesses can reduce change fatigue, realise promised productivity gains and build a stable foundation capable of supporting advanced AI integrations in the future,” the report says.
On the talent side, Young says organisations need to look at different ways to bring people into their organisations. While interns and digital apprenticeships have been talked about ‘businesses need to actually start doing stuff like that now’, he says.
“We need to be bringing young New Zealanders into business – not waiting for them to graduate from university but looking at other pathways. Because if we train them properly, they will bring different perspective and views and will query things and bring a use of technology that perhaps us older people haven’t thought of.”
Because AI is automating the administrative tasks traditionally used to train junior staff, new frameworks must be created, pairing juniors with senior specialists and training heavily on critical thinking, data validation and AI prompt-auditing.
Young notes a positive move in the introduction of the electrotechnology, IT and creative Industry Standards Board to set qualifications, standards and training requirements for the sectors.
“Now it’s on us to make sure the industry is strong on what those vocational pathways look like. Now we’ve got to work and make it happen.”
The report also recommends strengthening national settings that digital leaders say are limiting progress. Top of the list is the introduction of mandatory, non-negotiable cyber security standards, reflecting concern that inconsistent security practices across organisations are exposing the broader economy to increasing risk.
Young says digital leaders feel minimum standards would lift the baseline across large and small organisations alike and reduce the burden on individual firms to assess security maturity on their own.
Beyond security, the report calls for stronger national coordination through mechanisms such as a digital clearing house to vet global technology vendors, accelerated progress on a secure national digital identity framework and recognition of data platforms as critical national infrastructure.
Young says these recommendations reflect a desire for clearer direction rather than heavy-handed intervention, with government uniquely positioned to set long-term priorities and provide certainty that extends beyond election cycles.
For enterprise leaders, the implication is clear. The pause in adoption is not an endpoint. It’s a moment where decisions made about investment, implementation and focus will determine whether New Zealand consolidates its digital foundations – or allows strategic drift to set in.
