“It’s a big surprise,” says Martin Pelletier, Chief Strategy Officer at Novipro Group. (Photo: Jean-Sebastien Senecal.)
Inflation and the specter of a recession are among the causes that explain the decline in investment in information technology (IT) this year, according to the 2023 annual report on this industry released Monday by the Novipro Group.
According to Leger’s March survey, only 76% of organizations surveyed plan to take money out of their pockets this year for technology tools compared to 92% before the pandemic in 2019. These are the lowest commitments for six years. .
“It’s a big surprise,” says Martin Pelletier, Chief Strategy Officer at Novipro Group, a company that offers IT services. The majority of IT sites had been stopped during COVID-19 to focus on teleworking and the other elements necessary to run business. So we thought that IT investments would pick up.”
Recession, inflation and labor shortages are the three most cited causes for shrinking budgets in areas like cybersecurity and digitalization. For its part, telework is by far the element that is most often mentioned by the companies surveyed to justify an increase in IT expenditure.
Digital transformation shunned
Despite its growing importance, advanced data analytics and intelligence (AI) is an area in which only 13% of Canadian companies plan to invest, up from 36% in 2019.
“I am very concerned to see that so many organizations are once again postponing their technology investments, falling significantly behind in the expected results of their digital transformation,” says David Chamandy, CEO, Novipro Group.
Cost is the biggest barrier to investing in data analytics and AI. Lack of resources and inflation are the other two key factors respectively.
«There seems to be a step back, says Martin Pelletier. Leaders don’t understand how AI and data analytics can improve their processes. The financial sector is betting a lot in this area, but we are more hesitant on the manufacturing side, which would benefit from considering AI. Businesses should seek help from consulting firms to support them.”
The digital transition is particularly slow in Quebec compared to Ontario, which is leading the country. About 45% of businesses here have made the switch compared to 63% of those in the neighboring province, according to the report.
Martin Pelletier notices that there are more investments in Ontario than in Quebec, but he is not too worried about it.
“Quebec is not behind, but more cautious in its decisions,” he said. Instead of being the first, our companies watch the wave come before making informed choices. When you’re too quick on new technology, you can bang your nose on the wall.”
Lack of manpower
The seventh edition of “Portrait of IT in business in Canada” shows once again that the labor shortage is sorely felt in this field.
Quebec has much more difficulty than other provinces in recruiting IT specialists, such as cybersecurity, AI and cloud computing experts as well as system administrators. The gap with Ontario, which has the easiest in the country, is notable.
“The scarcity of labor may have slowed IT investments,” notes Martin Pelletier. It’s a chicken or egg story. To overcome the lack of employees, companies must bet on digitization or automation tools, but it takes resources to implement this. Outsourcing certain responsibilities, such as having IT services managed by a third party, is becoming increasingly popular.”
2023-06-12 12:26:41
#investments #affected #economy
