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Emerging technologies are essential for future survival: KPMG

Canadian companies under-invest in disruptive technologies compared to American counterparts

September 10, 2020   by KPMG LLP

HFS infographic (CNW Group/KPMG LLP)

 

TORONTO — Seven out of 10 Canadian technology executives say emerging technologies are essential to their organization’s future survival, yet firms are under-investing comapred to their US counterparts, says a new report.

The Enterprise reboot report by KPMG International and global industry analyst firm HFS Research explores both the investment and progress in adopting 5G, artificial intelligence (AI), blockchain, edge computing, hybrid and/or multi-cloud, process automation and smart analytics.

It shows US companies spend an average US$17 million per technology – 30% more than what Canadians spend.

KPMG’s recent Global CEO Outlook found that 84% of Canadian CEOs are now prioritizing their technology investments to meet growth and transformation objectives, and most (92%) say COVID-19 has accelerated the digitization of their operations.

CTOs in Canada identify main barriers to investment as fear the technology won’t work, challenges in changing the organizational culture, and the lack of talent or skill set in implementing the technology to achieve business outcomes.

The report also finds Canadian and US companies differ in their digital transformation objectives. Canadians cited cost reduction and improving decision making as their top reasons for investing in emerging technologies. Their US counterparts identified future survival and business model transformation. Improving brand value was a common goal on both sides of the border.

Six in 10 (63%) Canadian tech executives believe the combined use of emerging technologies is more beneficial than using any of these technologies in isolation. But, that’s significantly below the 75% of US respondents who see a benefit in the power of multiple technologies.

Cloud on the rise

Hybrid or multi-cloud, which refers to the use of both private and public cloud services, will become the predominant app, data, and computing infrastructure over the next five years. Sixty-one per cent of Canadian respondents hold this view, compared to 70% in the US.

More than half (56%) of US, UK and German respondents called cloud migration “an absolute necessity” due to COVID-19, underscoring the growing importance of cloud transformation.

Indeed, 55% of Canadian technology executives say they are already seeing tangible value to the business from their hybrid cloud and/or multi-cloud investments.

Canadian executives say one of the most-important advantages for deploying the cloud is so-called containerization in which software code is packaged or encapsulated into a container that is separate and portable from the host operating system and can run uniformly and consistently across any platform or cloud, free of issues.

Between March and June, KPMG International and HFS Research surveyed 900 technology executives at enterprises with more than US$1 billion in annual revenue across nine countries, including Australia, Canada, France, Germany, India, Japan, Netherlands, the UK and the US.

In Canada, 48 technology executives were surveyed in March and April during the COVID-19 economic lockdown. Survey data was supplemented by qualitative interviews with enterprise leaders who oversee the investment and adoption of these emerging technologies in their organization.

KPMG LLP in Canada is an audit, tax and advisory firm and the Canadian member firm of KPMG International Cooperative. KPMG has more than 7,000 professionals/employees in over 40 locations across Canada.


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