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Canadian technology leaders gain C-suite influence amid COVID-19 challenges, finds new KPMG in Canada report

Pandemic exposes both strengths and vulnerabilities with nearly half increasing their technology spend to ride the economic recovery

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TORONTONov. 18, 2020 /CNW/ – Six in 10 technology leaders in Canada say they have more influence in the C-suite now than they ever had because of the essential role digital technology is playing during the COVID-19 crisis to help keep companies open for business, safe from cyberattacks, and connected to their customers, finds a new KPMG in Canada report. Further, technology leaders feel this newfound appreciation inside their organizations will persist well beyond the global pandemic.

“CEOs today are realizing the strategic importance of technology to their company’s success,” says Sanjay Pathak, partner and national leader of technology strategy and digital transformation, KPMG in Canada. “The coronavirus pandemic, including the ensuing lockdown and restrictions, has been a driving catalyst for change, illustrating that digital transformation is about much more than cost optimization. It is really about envisioning the art of the possible to better adapt and get ahead of inevitable change. If you can imagine the business outcome, technology can make it a reality. But it requires business and technology leaders to collaborate continuously, from vision to implementation.”

Like their global counterparts, nearly half (47 per cent) of Canadian technology leaders agree COVID-19 has permanently accelerated digital transformation and the adoption of emerging technologies, such as artificial intelligence (AI), machine learning, blockchain, and automation.

“The pandemic has underscored the necessity of building a modern digital backbone. Technical capabilities, such as cloud, cyber, automation and AI, will modernize and safely connect customer channels, supply chains, and mid-office systems,” says Mr. Pathak. “Today’s digital leaders need to rethink, realign, and reprioritize their technology investments to be able to adapt to a world of unpredictable change. This focus and discipline will be critical to their organization’s ability to grow and it will further cement their value and influence in their organizations.”

The insights are based on the findings of the recent Harvey Nash/KPMG CIO Survey, the largest technology leadership survey of its kind in the world, and largely mirror the results of KPMG International’s 2020 Global CEO Outlook, with an emphasis on efficiency, security, innovation, data insights, and new ways of working.

Key Findings:

  • Three in five technology leaders in Canada and globally say the pandemic has permanently increased their influence (61 per cent, compared to 62 per cent globally).

  • Nearly half (47 per cent) of CIOs in Canada agree COVID-19 has permanently accelerated digital transformation and the adoption of emerging technology, such as AI, machine learning, blockchain, and automation. That’s in line with their global peers (48 per cent).

  • 61 per cent expect their budget to increase over the next 12 months, up from 57 per cent pre-COVID. This compares to only 48 per cent globally.

  • Over half (51 per cent) are increasing their overall technology spend to integrate front, middle and back offices, compared to just 43 per cent globally. They cited operational efficiency, customer engagement, and enabling the workforce as the top three business objectives.

    • These investments are focused on implementing software as a service (SaaS) (47 per cent vs. 34 per cent globally) and distributed cloud (45 per cent vs. 42 per cent globally).
    • Over one in five (21 per cent vs. 29 per cent globally) implemented small-scale edge computing or Internet of Things in core functions or areas.
  • 44 per cent believe that 30-to-50 per cent of their company’s workforce will remain predominantly working from home post-pandemic. By contrast, 47 per cent of their global peers think remote work will be the new norm.

The pressure is on

The impetus for real change often originates from failure, a major crisis like the pandemic, or competitive threats. Some companies entered the pandemic better positioned in their digital journey to pivot and scale into new opportunities. For others, it was simply about helping the business survive.

“How far along companies were on their digital transformation journey determined how quickly they could get up and running when the COVID-19 lockdown happened,” says Kathy Penner, partner and national leader for technology enterprise solutions, KPMG in Canada. “The pandemic either revealed how strong your technology infrastructure and processes were, or conversely exposed the vulnerabilities within it.”

A common theme throughout is the intense pressure faced by technology teams and a continued skills shortage. In Canada, nearly nine in 10 technology leaders (88 per cent) expressed concern about the mental health of their teams, compared to 80 per cent globally. Canadian companies are also better prepared to provide support, with 73 per cent already having mental health programs in place compared to only 58 per cent globally.

Many more technology leaders in Canada (96 per cent) expect to maintain or increase their team headcount, compared to their global peers (85 per cent). In Canada, the most-scarce technology skills are cybersecurity (42 per cent vs. 35 per cent globally), organizational change management (31 per cent vs. 26 per cent globally), cloud computing expertise (29 per cent vs. 21 per cent globally), advanced analytics and enterprise architecture (both at 27 per cent vs. 22 per cent globally), and technology architecture (24 per cent vs. 22 per cent globally).

Many Canadian technology leaders (59 per cent) believe AI can replace 5-10 per cent of their workforce (vs. 43 per cent globally) in the next five years. Yet, 71 per cent agree that new job roles will more than compensate for jobs lost through AI or automation, compared to 65 per cent globally.

“Digital is about more than merely replacing or adding technologies,” says Ms. Penner. “It’s also about building and nurturing a workplace culture that fuels the innovation and creativity to attract and retain talent and customers.”

Rising cybersecurity risks

The massive shift to remote work has also heightened cybersecurity concerns, with nearly two in five (37 per cent) Canadian CIOs saying their organization experienced an increase in security or cyberattack incidents during COVID-19. Globally, 41 per cent saw an increase in cyberattacks. Canadians reported significantly more spear phishing (95 per cent) and malware (71 per cent) attacks than their global counterparts at 83 per cent and 71 per cent, respectively.

Moreover, 82 per cent of Canadian technology leaders are worried COVID-19 has permanently increased the so-called “attack surface”, that is, the number of points through which unauthorized users can find vulnerabilities to access the network and steal data or hold the company for ransom.

“Cybersecurity has never been more critical,” says Ms. Penner. “We are seeing an increase in malware and cyberattacks. Hardening of company infrastructure – the tools, techniques, and best practices – to reduce potential vulnerabilities and security risks is now a topic in most boardrooms.”

For more insights into real-world challenges and digital transformation journeys, join a special KPMG in Canada webinar moderated by Mr. Pathak on “The technology leader’s agenda – driving enterprise business value” on Wednesday, November 25 at 2 p.m. EST. The webinar will feature panellists from government and the financial services industry. Click here to learn more and register.

About the 2020 Harvey Nash/KPMG CIO Survey

The 2020 Harvey Nash/KPMG CIO Survey is the world’s largest annual technology leadership survey by respondents, tapping into the insights and perspectives of over 4,200 IT leaders from organizations with a combined technology spend of over US$250 billion. The survey included 65 Canadian CIOs and was held in two pulses across 108 countries, with the first, from December 2019 to March 2020 and the second, between June and August 2020 to analyze the impact of COVID-19 crisis.

For more information about the survey and to request a full copy of the results, please visit www.hnkpmgciosurvey.com.

ABOUT KPMG IN CANADA

KPMG LLP, an Audit, Tax and Advisory firm (home.kpmg.ca) is a limited liability partnership, established under the laws of Ontario, and the Canadian member firm of KPMG International Cooperative (“KPMG International”). KPMG has more than 7,000 professionals/employees in over 40 locations across Canada serving private- and public-sector clients. KPMG is consistently recognized as an employer of choice and one of the best places to work in the country.

The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

SOURCE KPMG LLP

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