No one is willing to come out and call Canadian CIOs cheapskates, but recent research into IT spending patterns in the country suggest a deepening concern that lack of investment is undermining our business performance as a nation.
Deloitte Canada recently posted a video clip featuring an interview with Dejan Slokar, one of the analysts involved in its annual CIO survey report. Among other comments, Slokar said ongoing fluctuations in gas prices will likely mean continued reductions in technology purchases for oil and gas firms. But that’s not the only vertical affected by any means.
“What we see globally is there was a significant round of cuts in IT budgets. CIOs are now really focused to take a second look at how to do the right things and how to do them in the right way,” he said. “CIOs should look at broader ecosystems, at their partners, vendors and peers. They need to determine which capabilities they can leverage internally and what from outside.”
Sounds like something a consulting firm would say, right? However Deloitte’s not the only one sounding the alarm. This week the Conference Board of Canada published an article with data from its Report Card on Innovation, which said companies in Canada spend 17 per cent of non-residential gross fixed capital formation. If you’re not an economist, let’s just say that’s bad:
“Canada achieves a grade of “D” and ranks 8th of 15 peer countries on ICT investment. Over time, this gap between Canada’s investment level and that of its peers can produce substantial differences in productivity,” wrote Daniel Munro, principal research associate at the Conference Board.
Given that Canada is largely a country of small and medium-sized enterprises, the Conference Board is building upon its research by conducting a series of roundtable discussions with representative businesses. So far, it doesn’t sound like there’s a major attitude problem towards spending on IT.
No participant said that time and money constraints prevented them from pursuing technology change entirely. Many indicated that they simply had to reach a ‘pain point’ before acting. Rather than focusing on barriers to change, firms tended to be more concerned with implementation challenges—such as minimizing cost uncertainties, financing ICT investments, managing risks, and achieving a balance between day-to-day operations and change. In short, most firms recognize that implementing new technologies is an investment in the future of the business.
In a way this as echoed by Deloitte’s Skolar, who said that while his firm’s survey didn’t talk a lot about foundational tech investments that CIOs continue to make, which may be “distractors” to more breakthrough kinds of work.
“Having solid foundations is critical to being able to lift their head up and focus on innovation,” he noted, adding that if nothing else, Canadian IT leaders know where the real gold is.
“Businesses and industries are starting to mature their thinking of data in running their business. They see that data as a potential disruptor in business if they do not invest in the proper technologies.”
Maybe IT spending in Canada is a problem. But it sounds like the road to spending that yields innovation is less a matter of “if” than “when.”
Image source: Conference Board of Canada
