Spark NZ warns of firms' unreadiness for AI-based future

SPARK, the largest telecommunications and digital services provider in New Zealand, has raised concerns over the future readiness of businesses across the country regarding Artificial Intelligence (AI). Amidst a wider acceleration of cloud computing adoption transforming operations, efficiency, and scalability across businesses in New Zealand, Spark highlights the significant number of organisations yet to prepare for an AI-driven future.

According to Spark, Aotearoa's current tech backbone does not sufficiently support innovation in an AI-driven future. The General Manager for Data and Automation for Spark New Zealand, Kallol Dutta, emphasises the importance of widespread migration to the cloud as a necessary preparation for businesses hoping to reap the benefits of AI. Insufficiently robust cloud computing strategy, he explains, equates to a strategic oversight happening increasingly frequently.

Kallol's commentary follows an increase in local and global businesses showing interest in adopting AI. Yet, without a cloud infrastructure upgrade, the deployment of AI, including generative AI, remains a complex challenge. CCL, New Zealand's largest locally focused IT services and hybrid cloud provider released a report in July 2023 highlighting that while 88% of NZ organisations consider the cloud important to their future strategy and growth—a 6% increase from the previous year—only 57% are leaders in this area.

In a surprising revelation, the same research indicated a 13% drop in AI maturity over the previous year. This changing dynamic is attributed to the emergence of generative AI led by OpenAI's ChatGPT, leaving many organisations struggling with integrating these newer innovations into their course of operations. This scenario underscores the need for continuous adaptation and exploration to capitalise fully on the potential offered by emerging technologies.

As part of its long-term strategy, Spark has been employing AI to enhance its data-driven marketing over the past three years. The company has developed the B.R.A.I.N (Build Robust AI for Next-best-action) platform integrated into its MarTech stack, driving a ten-fold improvement in campaign outcomes. Stitched into cloud technology, B.R.A.I.N allows for efficient data processing and analytics while also encouraging integration with other technologies and services, thereby enabling full optimisation of AI capabilities for data analytics, pattern recognition, and predictive modelling.

Kallol explained how these machine learning models could utilise data to offer predictions with around 80% accuracy, such as whether a customer is likely to purchase a new phone. This strategy ensures customers only receive promotional messages relevant to their current needs and decreases indiscriminate messaging to all customers. This targeted approach led to a ten-fold improvement in conversion rates.

However, getting B.R.A.I.N in place was not an overnight task but necessitated a careful two-year-long migration of Spark's on-premises data to a cloud-based infrastructure. This overhaul required in-depth change management and skill development programs. According to Kallol, moving to the cloud is not a copy-paste job from existing on-prem systems but an opportunity to simplify, automate, and strengthen resilience. It also necessitates retraining people on cloud technologies and implementing a different governance model to manage and maintain cloud assets.

Kallol warns of significant consequences for NZ organisations that do not scale up their uptake of cloud technology, forecasting they will miss out on an AI-enabled future. Thus, Kallol reemphasises the importance of robust cloud infrastructure in the journey towards AI adoption.