The last four years have seen dramatic advancements in technology innovation and adoption. Some of that innovation was driven by necessity during COVID-19, and in many cases, by breakthroughs from accelerated research investments. Technology has never been more critical to advancing business strategy and value realization.

In an environment where there is continued pressure to do more with less, and do better, faster, KPMG’s Global Future of IT report identified six main trends driving the future of IT. This report addresses key areas of focus required to keep pace with change and continue to support the digital revolution transforming Canadian organizations. Read on to learn how these trends are evolving in the Canadian landscape and how CIOs and IT leaders can adapt and evolve to meet the future of IT.

Six key trends driving the evolution of the IT function​

Successful IT organizations will need to deliver innovation at pace with the business and the market. For example, GenAI is empowering software engineers to quickly write, test, and translate code, which drives faster innovation. But innovation isn’t just about technology—and it will require IT leaders to stay highly tuned to the needs of the business

So how can the IT function deliver ‘innovation at velocity’ and be a true partner on business strategy? Doing this requires lean principles and agile practices across IT operations. This could be as simple as co-locating users across disciplines to problem-solve together or having more formal agile mechanisms in place. CIOs can start by rethinking their AI strategies, ensuring they take an agile approach to execution. But they’ll also need to create a standard taxonomy to coordinate between business and IT organizations, while evolving existing funding models.

We’re also seeing a shift toward solutions that are consumed as-a-service on the cloud – the “second great re-platforming.” This allows organizations to benefit from the latest technologies, while reducing upfront costs. In Canada, four in five businesses plan to grow their use of XaaS solutions as part of their cost reduction efforts in the next two years, according to our 2023 Global Tech Survey. Yet, there’s still risk-aversion to XaaS, with only 37% of Canadian respondents saying the risk of moving to XaaS is worth it for the opportunities, versus 63% globally. While XaaS can give the IT function a significant amount of flexibility, it also creates a new way of working—and with it, new challenges.​

If the IT function is no longer providing the technology that underpins business models, the core responsibilities of team members will change. XaaS will also require rethinking cyber and resilience, such as adapting to shared security models—and managing the unpredictable costs that come along with them. To get started, CIOs should instill governance to manage the evolution to the public cloud, build stronger relationships with vendors (and between the business), and start moving toward an enterprise-wide zero trust security framework.

As more Canadian organizations move toward XaaS, certain third-party service providers will take over mission-critical functions. However, the IT function is ultimately responsible for managing those relationships and ensuring security, privacy, and compliance—areas that they’re already challenged with. In KPMG’s Global Tech Survey, 48% of Canadian tech executives say the IT function lacks the governance and coordination needed to effectively support their digital transformation initiatives.

To move toward ‘resilience by design,’ the IT function will first need to understand how all the disparate partners and third parties fit together, and how they impact critical services and applications. This strategy should include multiple layers, including protective capabilities, redundancy capabilities, and recovery capabilities. CIOs can start by tackling the cultural barriers that create risk (such as low awareness or lack of knowledge), planning a roadmap to help with the second re-platforming of technology, and showing the value of investing in resilience to senior leaders.

More than half of Canadian tech executives (51%) in our Global Tech Survey say that advancing Environmental, Social and Governance (ESG) priorities will be a primary innovation goal for their IT functions over the next two years. But responsible operations isn’t just about corporate reporting for compliance purposes; rather, it’s about embracing ESG to create value for the organization—from managing power consumption and lowering carbon emissions to practicing responsible sourcing. Embracing ESG can also help organizations with tactical issues, such as supply shortages and value chain disruptions.

For the IT function, moving toward sustainability starts with data: addressing the data challenges around environmental, social, and governance dimensions. IT leaders will need to work with ESG leaders to clarify their strategy for responsible operations and focus on areas where IT can make an impact. ESG should also go beyond reducing carbon emissions to look at other issues, such as the circular economy, managing human rights, and reducing corruption in the supply chain—and capture that value to foster an ESG mindset.

The shift to XaaS and innovation at velocity will require Canadian organizations to become more data-centric, particularly as they explore the possibilities of AI. That means IT spend on data and analytics will become much higher in the coming years, so the IT function will need to collaborate with all parts of the business as it moves toward data democracy.

However, 34% of Canadian organizations in our Global Tech Survey have an immature data management strategy, and overall Canada is significantly less mature (4.6%) than the global average of 15.5% at embedding data and analytics into culture and operations.

Data democracy is the goal. But the challenge is creating data democracy while having the necessary data management and governance pieces in place—so when users adopt technologies like GenAI, they can be confident that their data is trustworthy and reliable. CIOs will need to partner with the business to integrate data into the broader technology strategy and create a data-centric IT operating model and roadmap. But this will also require closing the data talent gap.​

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34% of Canadian organizations have an immature data management strategy

The talent issue is only expected to intensify, not just in Canada, but around the globe, especially for the specialized architecture and data engineering skills required in a XaaS future. The competencies and capabilities required by the IT function are quickly evolving, so they’ll need to ensure that talent keeps up with the pace of technological change through learning and development. If CIOs can’t find the niche skillsets they’re looking for, there’s a good chance what they need is ‘hidden’ somewhere inside of the organization, if they were only able to articulate what’s needed.

The most successful organizations will be those that are talent incubators, generating the skills they need for success, and building a strong brand—along with diversity, equity and inclusion (DEI) practices—that will resonate with younger recruits. CIOs will need to consider not just how they attract and retain employees, but how to re-design the IT talent structure. This could require individuals to upskill or even change roles, which will likely require an element of change management.

Looking ahead​

These trends are all intertwined, and together they’re driving the future of IT. Taking a lead on responsible operations and incubating talent goes hand-in-hand with innovation at velocity and leveraging XaaS. Wrapped around that is the need to become a more data-centric, resilient organization. The overarching goal for the IT function is to create outsized value relative to their inputs—and adapt to the trends that are fundamentally reshaping the role of the IT function.​

Ready to get started? Our KPMG in Canada team can help.

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