Canadian firms face AI skills, legacy tech & cyber threats
New survey data from Kyndryl indicates that Canadian business leaders expect significant disruption in the coming year but face ongoing challenges in preparing their organisations for emerging technological and regulatory risks.
The Kyndryl Readiness Report, based on findings from a survey of 3,700 senior leaders across 21 countries, including Canada, highlights a complex environment where returns from artificial intelligence (AI) investments are beginning to materialise, but progress is hindered by legacy technology, workforce skills shortages, and heightened cybersecurity threats.
Cybersecurity a key concern
The report reveals that only 31% of Canadian leaders feel their IT systems are ready to manage future risks. Cyberattacks are cited as the top concern, with 85% of Canadian organisations experiencing a cyber-related outage in the past year. As a result, 74% of respondents are prioritising investment in AI-powered cybersecurity solutions, more than any other AI capability.
The sense of urgency is underscored by the broader findings of the global report. Martin Schroeter, Chairman and Chief Executive Officer of Kyndryl, said,
"A readiness gap exists as enterprises grapple with the promise of transformative value from AI. While 90% of organisations think they have the tools and processes to scale innovation, more than half are stalled by their tech stack, and less than a third say their employees are truly ready for AI. Closing that gap is the challenge and opportunity ahead."
This perception is mirrored in Canada, where business leaders identify cyber resilience as a critical area for investment and improvement.
AI adoption and skills gaps
AI is expected to have a considerable impact on Canadian workforces in the short term. According to the report, 88% of Canadian leaders believe that AI will "completely" transform roles and responsibilities within a year. Despite this expectation, the data suggests adoption remains uneven, with only 59% of technical employees and 42% of non-technical employees using AI weekly. Many organisations say their staff lack the technical skills required to leverage AI effectively.
Workforce transformation is a theme seen across all surveyed countries. The report finds that nearly nine in ten leaders globally expect AI to reshape jobs in the coming year, yet only 29% believe their workforce is ready to do so successfully. Cultural barriers also remain, with almost half of Chief Executives reporting their organisations stifle innovation (48%) or move too slowly in decision-making (45%).
Innovation and legacy challenges
Although 92% of Canadian organisations feel they have the necessary tools and processes to scale innovation, 67% report that legacy technologies are causing delays. Many are struggling to transition from experimentation to implementation: 68% have more pilot projects than they can feasibly scale, 63% often stall at the proof-of-concept phase, and 59% struggle to keep up with the rapid pace of technological advancement.
The global figures echo these challenges, with 62% of organisations saying their AI projects have not advanced beyond the pilot stage, despite 54% reporting positive returns on AI investments-an increase of 12 points from the previous year.
Spending and ROI pressures
In Canada, 47% of organisations reported already seeing positive returns on AI investments. A further 30% are allocating more funds to AI this year, and 63% feel increased pressure to demonstrate returns on their AI projects compared to a year ago. Internationally, AI spending has increased by an average of 33% year-on-year, with 68% of global leaders investing "heavily" in at least one form of AI.
This increased investment comes with heightened expectations and scrutiny, especially as organisations seek to show that AI delivers tangible business value and can be relied upon to protect mission-critical operations from cyber threats.
Regulatory and geopolitical factors
The landscape for data storage and management is becoming more complex, with 81% of Canadian respondents expressing concern about the geopolitical risks associated with storing and managing data in global cloud environments. In response, 60% of Canadian organisations have already made changes to their cloud strategies, whether by investing in data repatriation, switching vendors, or shifting towards private cloud environments.
Globally, three in four leaders cite regulatory fragmentation and data sovereignty as reasons for revising their cloud arrangements, with 65% having already adjusted their approach to ensure compliance and manage emerging risks.
The path ahead
The report also draws attention to a subset of organisations distinguished as "Pacesetters"-those who are excelling in areas such as cultural adaptability, leadership vision, and investment in innovation. Compared to their peers, Pacesetters are notably less likely to see their technology stack as an obstacle and more likely to have agile cloud environments that can adapt to new regulations. They are also 20 percentage points less likely to have experienced a cyber-related outage in the past year.
The findings suggest that while Canadian organisations are experiencing early benefits from AI and digital transformation, lingering issues around legacy technology, workforce readiness, and evolving regulatory demands pose ongoing challenges to realising the full potential of these investments.
