Exclusive: Kyndryl Canada warns of readiness gap amid AI push

Canadian organisations are pressing ahead with artificial intelligence initiatives at a time when many remain underprepared for the operational, security and workforce demands that come with them.

According to new findings from Kyndryl in the company's latest Readiness Report, there is a growing disconnect between ambition and execution, driven by geopolitical pressure, cyber risk, and uncertainty about return on investment.

At the centre of the findings is what Kyndryl describes as a "readiness tipping point": a moment at which organisations must decide whether to invest decisively in modern infrastructure and skills, or risk falling behind competitors that execute.

The Canadian data, collected from 200 Canadian business leaders, suggests that most have not yet crossed that threshold.

Readiness gap

Kyndryl's research shows that fewer than one-third of business leaders believe their organisations are ready to manage the scale of change they face. Cyber resilience stands out as a particular weakness, with more than four in five respondents reporting a cyber outage in the past year. At the same time, concern is rising that existing IT environments will not cope with future demands for compute power and data storage.

AI adds another layer of pressure. Most executives expect AI to reshape a significant share of roles within the next year, yet readiness levels lag far behind expectations.

Farhaz Thobani, President of Kyndryl Canada, framed the challenge as one of preparedness rather than technology alone.

"There's a tonne of uncertainty in the business environment," said Thobani. "Geopolitical risks, cyber resiliency risks, data sovereignty concerns, changing skills profiles, changing technology demands and, of course, regulatory changes. All of these things contribute to uncertainty."

In that context, readiness becomes a differentiator. Organisations that invest now in people and platforms are more likely to absorb disruption and extract value from AI. At the same time, those who delay do so at greater risk of operational and competitive exposure.

Furthermore, 67 per cent of Canadian's surveyed say their legacy technology delays innovation within a tech stack strained by increasing compute demands, 10 points higher than the global average.

AI execution

While a majority of leaders express anxiety about cyber threats and AI complexity, far fewer believe their organisations are prepared to manage them.

According to the report, only 31 per cent of business leaders believe they're ready for change in the face of these risks. In comparison, 88 per cent believe AI will completely change roles and responsibilities within the following year.

Thobani said this gap is driven as much by people as by technology. AI adoption requires collaboration between technical teams and the wider workforce, yet many organisations remain cautious, taking a wait-and-see approach while standards, regulations and best practices continue to evolve.

"There's a critical foundation that has to be in place," he said, referring to data platforms, infrastructure and skills. "Once it does take shape, then you'll see a greater level of AI adoption right across the marketplace."

Many organisations are experimenting with AI tools but struggle to scale them into production environments or embed them into business processes in ways that deliver measurable value.

Pacesetters defined

Kyndryl identified a small group of organisations it describes as "pacesetters", accounting for around 13 per cent of organisations in the Canadian findings of the report. These companies stand out for their ability to scale AI initiatives, reduce risk and generate tangible returns.

What distinguishes them is not a single technology choice, but a combination of strategic investment, operational discipline and culture. Pacesetters tend to prioritise modernising infrastructure and strengthening cyber resilience before pursuing more ambitious AI use cases. They also place sustained emphasis on reskilling employees rather than relying solely on external hiring.

Culture plays a decisive role. These organisations treat trust and transparency as enablers of change, using cross-functional collaboration to redesign business processes rather than layering AI on top of outdated ways of working. The result is greater productivity and clearer returns on investment.

"[They] have built trust through their organisation with transparency and used people and technology together to kind of rebuild their business process and focus on their transformational goals," added Thobani.

Data sovereignty

Canadian results broadly mirror global trends, but the research highlights several notable differences. Canadian organisations are slightly less likely than their global peers to have altered cloud or technology strategies in response to geopolitical pressures. At the same time, concern about data sovereignty and geopolitical risk is higher in Canada than the global average.

This combination of elevated concern and slower response suggests hesitation rather than complacency. Canadian leaders appear acutely aware of the risks associated with cross-border data flows and global cloud environments, yet have been more cautious in making structural changes.

Thobani described this as a wider pattern of delay affecting organisations worldwide. "Quite frankly, not enough is being done so far," he said. "We're at a hurry-up-and-wait stage."

Return on investment is a major factor behind that hesitation. Fewer than half of Canadian surveyed leaders report positive returns from AI investments to date, creating uncertainty about where and how aggressively to invest. Despite this, a growing share of business leaders are increasing spending on IT infrastructure and workforce strategies, often under pressure from the business to move faster.

Alignment within organisations remains another challenge. Executives focused on growth may favour rapid hiring to accelerate AI initiatives, while technology leaders tend to prioritise reskilling existing staff to reduce operational risk. Investment priorities also compete, with organisations weighing customer-facing innovation against back-office optimisation.

As Thobani put it, "Do you invest in the front office to generate more customers...or do you invest in the back office to optimise operations and productivity?"