Few Canadian businesses seeing AI return-on-investment, says KPMG

Only two percent of Canadian businesses are seeing a return on their generative AI investment, according to a KPMG survey which polled over 750 business leaders in Canada.

Most organizations (93%) are using AI in some form, up sharply from 61% last year. However, only 31% have fully integrated AI solutions across core operations and workflows.

As such, the 2% reporting any ROI is less shocking because adoption is still in the early stages.

Three in 10 business leaders expect AI investment to begin generating a return within the year, while six in 10 project a timeline of one to five years.

“Only a small sliver of Canadian businesses are generating growth from their AI investments today, and that’s understandable – new technologies take time to be adopted and demonstrate identifiable return on investment,” said Stephanie Terrill, managing partner of digital and transformation at KPMG in Canada.

Aside from many companies still being in the experimentation phase with GenAI (compared to integration in production and deployment at scale), many businesses also lack consistent methods to track and report AI-related outcomes.

Terrill recommends a holistic approach that combines hard financial metrics (cost savings, revenue growth, and operational efficiency) with softer strategic metrics (improved decision making,  employee experience, and customer loyalty).

AI adoption is top of the agenda for business leaders, with most respondents citing it as the top operational priority over the next three years. Nearly three-quarters (73%) of Canadian CEOs are planning to invest 10%-20% of budgets to AI in the next 12 months, according to KPMG research.

Forty-six percent are focusing investments on hiring AI talent, 41% are focusing on buying GenAI tools, and 33% are focusing on change management and adoption.