Just two percent of Canadian businesses are seeing a return on their investments in generative artificial intelligence, according to findings from KPMG Canada’s “Generative AI Business Adoption Survey.”
Sixty-three percent of these are large companies reporting annual revenues of at least $1 billion. Fifty-seven percent said the ROI ranged from 5-20 percent, and 31 percent could not quantify the return.
Of the 753 business leaders surveyed, 93 percent reported that their companies were using some form of AI but just 31 percent had fully integrated AI solutions into core operations and workflows. Thirty-two percent partially integrated AI into some operations and workflows, and 20 percent are trialling projects or experimenting.
Three in 10 respondents expected to see ROI within the year; 61 percent expected to see it in 1-5 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. However, Canada is facing near-term threats to its economic competitiveness and grappling with declining productivity and prosperity, so waiting years for AI investments to create value isn’t realistic in this environment – in fact, it’s downright risky,” said Stephanie Terrill, KPMG Canada’s Canadian digital and transformation managing partner, in a statement.
Terrill added that Canadian companies needed to speed up implanting AI into core operations to spur near- to medium-term productivity gains, bolstering the country’s economic competitiveness. Many organizations remain in the experimentation phase and have yet to deploy AI at scale or into production, she said.
She noted that some companies did not have consistent ways to monitor and report AI-driven results; still others utilized outdated or irrelevant methods that failed to adequately measure AI’s full value. Fifty-seven percent of respondents indicated that a significant challenge of AI implementation was grasping how they could extract value; only 38 percent said their company had established a clear value extraction plan.
“Organizations are using AI to improve productivity, but very few know how to capture productivity gains and turn them into growth. Key performance indicators are essential for achieving success, but they must be underpinned by a clear strategy that bolsters and measures growth – and that needs to be established at the outset of their AI journey,” Terrill said.
She suggested that organizations adopt holistic approaches merging financial with strategic metrics.
“To realize the full value of AI, organizations need clear ROI frameworks that measure not just financial impact, but strategic and capacity gains. Paired with strong governance and accountability, that’s how businesses will turn AI ambition into measurable results,” Terrill said.
Forty-six percent of respondents reported they would concentrate on investing in developers and other tech staff; 41 percent would spend on generative AI tools and solutions; and 33 percent would focus on change management and adoption. Per a KPMG International study, over the next 12 months 73 percent of Canadian CEOs indicated their intent to invest 10-20 percent of their budgets in AI.
KPMG in Canada conducted the “Generative AI Business Adoption Survey” from August 15 to September 3 through Sago’s Methodify research platform.