2024: Technology trends and investments in Canada
Major IT research firms such as Gartner, Forrester and Statista recently published their 2024 reports, which include key objectives, investment priorities and three-year predictions for the Canadian market.
Sometimes the results from one year to the next are relatively similar, but this is not the case between 2023 and 2024, where we see some major changes. The economic and legislative environments have not only pushed organizations to accelerate the pace of investment in technology, but also to review their priorities.
Here’s an overview of the findings for 2024.
The economic context
The economy plays a major role in the capacities and investment decisions of organizations. And 2023 was tumultuous: against a backdrop of geopolitical instability, we lived with the fear of a recession, high interest rates, rising inflation and cautious banks. All this, while our neighbour to the south has managed to maintain a growing economy, despite the predictions of some economists. In Canada, this has pushed many organizations to carry out significant restructuring and layoffs.
For 2024, experts and economists seem divided, even polarized. The term that comes up most often is “cautiously optimistic,” an oxymoron that describes this situation well. On the one hand, economic forecaster Harry Dent predicts a global cataclysm—the biggest crash since 1929. On the other hand, experts from the country’s major banks predict a gradual reduction in interest rates and a return to a more stable economy in the second half of 2024. Technology investment forecasts suggest an increase in budgets of 8% in 2024, as opposed to 5% in 2023. This may be a sign of greater confidence in the economy.
The legislative context
Legislation is also playing a greater role in investment decisions in 2024. In Quebec, for example, Law 25 will require all organizations with a digital presence to substantially revise their approach in how they protect personal information. In Europe, the Belgian public prosecutor’s office introduced a strict regulatory framework on AI last year—a world first. With the EU at the forefront of regulatory change, this may provide clues of what might come next in other countries, including Canada.
In the U.S., an executive order on AI provides a government-wide guide to responsible AI development and deployment, but experts agree that the repercussions of this will not be felt immediately. We’ve also seen several states and federal offices in the U.S. file lawsuits against digital giants, such as Meta and Amazon. This could force these tech companies to review certain business practices, which could in turn impact advertisers and digital retailers during the current year or in 2025.
The main priorities of 2024
In Canada, analysts predict three major priorities for 2024. Interestingly, none of these were on the priority list a year ago, when the focus was more on growth.
- Excel in customer experience
- Increase the efficiency of human capital
- Minimize the risks associated with digital fraud
At the top of the list is excellence in customer experience. In an unstable and competitive market, organizations are investing in their business relationship with customers. As a precursor to growth, this helps increase customer loyalty and, in turn, existing revenue.
Then, it’s a question of increasing the efficiency of an organization’s employees. Despite significant layoffs and an increase in immigration, an imbalance is expected in the country’s workforce until 2040. If, say, for every 10 positions only eight can be filled, the investment in IT should be used to reduce the number of necessary positions, without necessarily increasing hiring capacity. In other words, it’s about doing more with less, thanks to better integration of technologies.
Finally, there’s risk and compliance management. On the one hand, legislative frameworks are changing across the country and among our partners, requiring significant technological adaptation. On the other hand, successful cyberattacks against Canadian organizations have almost doubled between 2021 and 2023, in some cases knocking out operations for several months. Insurance companies play a key role, since they’re increasingly reluctant to offer services at reasonable costs to companies that are poorly equipped in cybersecurity or don’t meet the minimum standards required by law when it comes to managing personal information.
Investments in 2024
Planned IT investments are closely linked and consistent with organizational priorities.
- Cybersecurity
- Business intelligence
- Application modernization
The tactics of cybercriminals and cybercrime syndicates are becoming more and more sophisticated, and they too can take advantage of AI to refine their attacks. In this context, investments in cybersecurity and information security are a necessity for organizations, especially those that have been slow to modernize their business applications. Indeed, companies maintaining legacy systems are even more at risk.
Next, organizations plan to invest more in business intelligence and analytical capacities by accelerating the migration of their data to cloud platforms. This goes hand-in-hand with improving the customer experience: the more you’re able to transform datasets from across the organization into relevant information in real time, the more it’s possible to be proactive in serving your customer base.
Finally, business application modernization—a term that started appearing in 2022—continues to be a top investment priority this year. Indeed, many organizations are transitioning their legacy management applications—some of which are 15 to 20 years old—to new, modern applications. These are typically cloud-based and provided by companies such as Microsoft, SAP, Oracle and Salesforce.
2024 predictions
When it comes to predicting which technologies will have the biggest impact by 2026, the winner isn’t surprising: AI, particularly generative AI, ranks first. That said, the vast majority of survey respondents are still exploring real use cases for this technology, which explains why it’s not a priority, nor an avenue for significant investment, in 2024.
Low-code/no-code platforms, which require little or no expertise in computer programming, is also among the technologies that will have a big impact by 2026. This is a sign that these platforms are becoming increasingly efficient and flexible, leading to an important paradigm shift. This means organizations will be able to drastically reduce the implementation time of these technologies and benefit much more quickly from their IT investments.
Sources:
- “2024 Planned Technology Spend for CIOs in Canada,” Gartner CIO and Technology Executive Survey, Gartner (December 2023).
- “Economic conditions outlook 2023,” McKinsey & Company (2023). https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/economic-conditions-outlook-2023
- “2024 and beyond: Will it be economic stagnation or the advent of productivity-driven abundance?” McKinsey & Company (2024). https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/2024-and-beyond-will-it-be-economic-stagnation-or-the-advent-of-productivity-driven-abundance
- Owens, T. & Al, “Tech in a time of crisis,” Statista. Owens, T. & Al (2024). Retrieved from statista.com
