Six in 10 Canadian organizations have adopted generative AI, KPMG survey shows

In a recent survey of 872 Canadian organizations, 61 per cent of respondents said they have implemented generative AI, and nearly nine in 10 (89 per cent) described the technology as extremely or very important to their competitive advantage. Of those that have not yet adopted generative AI, nearly eight in 10 (78 per cent) plan to implement it within the next 12 months.

“It’s encouraging to see the rapid adoption of generative AI barely two years after it was introduced to the public. Canadian organizations are embracing its transformative potential and realizing how it can help them gain a competitive advantage,” says Stephanie Terrill, Canadian Managing Partner of Digital and Transformation at KPMG in Canada.

“Investing in generative AI is critical to addressing the country’s productivity gap. We’re at a critical point in the evolution of Canadian business innovation, where organizations of all sizes will need to decide whether – and how – they will contribute to a more productive, competitive and prosperous Canada. Generative AI will be key to that decision,” Ms. Terrill adds.

Public vs. Private tools

Close to half (44 per cent) of respondents are using a combination of publicly available and privately-built generative AI tools, while 27 per cent are using private tools exclusively and 19 per cent are relying solely on publicly available tools.

Ms. Terrill says the growing use of private generative AI platforms is notable given the relatively short lifespan of the technology.

“Organizations are increasingly using proprietary generative AI tools because they’re concerned about the privacy and security of their proprietary data,” Ms. Terrill says. “Private generative solutions are ideal for keeping sensitive company data safe, but publicly available tools often have more advanced capabilities. Using both public and private generative AI tools is a smart approach, so long as organizations are strategic and deliberate about how they’re using them.”

While uptake of generative AI has accelerated quickly among Canadian companies since it was introduced to the public less than two years ago, many organizations are still figuring out how to leverage the technology: only 36 per cent of respondents strongly agreed that their organization has fully integrated generative AI across core operations and workflows, while 47 per cent agreed somewhat and 17 per cent disagreed.

Roughly one quarter (26 per cent) agreed strongly that their organization has a clear understanding on the value that generative AI will bring to their business, and they know how to realize that value – while 51 per cent agreed somewhat and 22 per cent disagreed.

Ms. Terrill says understanding how an organization can fully benefit from generative AI is critical to achieving full integration, and for many Canadian organizations, this is still a work in progress.

“Canadian organizations have clearly embraced generative AI, but many are still figuring out how to reap the full benefits of the technology. Ethical challenges, security and compliance considerations, implementation costs and employee adoption and literacy are some of the key challenges organizations are facing in their AI integrations. The good news is that these hurdles can be overcome with comprehensive, cross-functional, multi-stakeholder strategies,” says Ms. Terrill.

“Business leaders need to work in tandem with technology leaders, employees, board directors and even third-party vendors to realize the full value of generative AI. Constant education, experimentation, innovation, collaboration and communication are critical keys to success,” she adds.

Generative AI investment priorities

Three quarters of respondents said that despite ongoing economic uncertainty, generative AI is a top investment priority for their organization, with nearly half (45 per cent) focusing their current generative AI investments in data and analytics capabilities. Looking ahead three to five years, more than half (55 per cent) of respondents are planning to focus their generative AI investments in the information technology (IT) function.

Two thirds of respondents said they expect to see a return on their generative AI investments within the next three years – with 51 per cent measuring their ROI by improved productivity, and 47 per cent citing increased profitability as their preferred measure.

“Generative AI can boost productivity, but organizations need to figure out not only how they’re going to measure productivity gains, but how they’re going to reinvest those productivity gains. If they can do that, they will start to see their generative AI investments pay off in a bigger way,” Ms. Terrill says.

Key survey highlights:

• Two thirds of mid-sized companies expect to see a return on their generative AI investments within the next three years:
  • 38 per cent expect ROI in 1-3 years
  • 28 per cent said 6 months-1 year
  • 22 per cent said 3-5 years
• 55 per cent said information technology (IT) is the top functional area they’re planning generative AI investments in the next three to five years
  • 44 per cent said research and development
  • 35 per cent said finance and accounting
• Of those who had not yet adopted generative AI, 78 per cent plan to adopt the technology
  • 46 per cent plan to adopt generative AI within 12 months
  • 35 per cent said within 6 months
  • 14 per cent said within the next 2 years
• Among respondents who haven’t and don’t plan to adopt generative AI, 34 per cent cited data privacy as a top reason
  • 32 per cent said inadequate cybersecurity defences
  • 30 per cent cited insufficient technology infrastructure

Workforce readiness

The path to fully integrating generative AI requires significant workforce upskilling, training and adoption – something many organizations appear to be grappling with. Fewer than four in 10 (37 per cent) strongly agreed that their organization is equipped to upskill their employees to fully leverage the benefits of generative AI (while 51 per cent agreed somewhat).

Just over one quarter (27 per cent) of respondents strongly agreed that their employees have the right skills to fully leverage the benefits of generative AI (49 per cent agreed somewhat), and 27 per cent strongly agreed that their organization provides mandatory generative AI skills training for leaders and employees (47 per cent somewhat agreed).

Walter Pela, KPMG in Canada’s AI Client and Market Development Leader, says the number of organizations with mandatory generative AI training is too low – and quite frankly, concerning – especially since seven in 10 (71 per cent) respondents said they are very or extremely concerned about employees putting sensitive data into public generative AI tools.

“If business leaders are concerned about what their employees are putting into generative AI platforms, that tells me they should be strengthening – or perhaps even redesigning – their employee training and upskilling programs, and implementing stronger guardrails with clearly defined ‘do’s’ and ‘don’ts’ to prevent employee misuse,” he says.

Nearly nine in 10 (88 per cent) respondents said the integration of generative AI has made them rethink how they train and develop their employees, while 73 per cent said their organization plans to redesign or restructure jobs roles and activities to realize the value of generative AI.

“Generative AI is not going to be the job-killer that many feared it would be, but it will certainly change the nature of work and how companies train their employees.  As the technology’s capabilities continue to improve and expand, organizations will need to have flexible, agile workforces that are continuously learning and adapting – that’s how they will thrive in the age of generative AI.”

About the KPMG in Canada Generative AI Business Survey
KPMG in Canada surveyed 872 business owners and executives between August 15 and September 26, 2024, using Sago’s premier business research panel. Of respondents, 61 per cent had adopted generative AI at their organization. Fifty-six per cent of respondents identified as CEO, President, Chairperson or C-Level executives such as CFO or COO; 19 per cent identified as senior level vice president or director. Twenty-six per cent helm companies with $500 million to $699 million in annual revenue; 20 per cent have between $700 million to $999 million; 21 per cent have $1 billion or more. 58 per cent of respondents were from privately held companies and 42 per cent were publicly traded.

About KPMG in Canada
KPMG LLP, a limited liability partnership, is a full-service Audit, Tax and Advisory firm owned and operated by Canadians. For over 150 years, our professionals have provided consulting, accounting, auditing, and tax services to Canadians, inspiring confidence, empowering change, and driving innovation. Guided by our core values of Integrity, Excellence, Courage, Together, For Better, KPMG employs more than 10,000 people in over 40 locations across Canada, serving private- and public-sector clients. KPMG is consistently ranked one of Canada’s top employers and one of the best places to work in the country. 

The firm is established under the laws of Ontario and is a member of KPMG’s global organization of independent member firms affiliated with KPMG International, a private English company limited by guarantee. Each KPMG firm is a legally distinct and separate entity and describes itself as such. For more information, see kpmg.com/ca. 

For media inquiries:
Roula Meditskos
National Communications and Media Relations
KPMG in Canada
(416) 549-7982
[email protected]

SOURCE KPMG LLP