Data quality, skills gaps, governance proving to be the hurdles, says report
Despite the popularity of generative artificial intelligence (GenAI) among middle market companies in Canada and the United States, many firms are struggling to build the internal expertise needed to fully leverage the technology, according to a report.
Over nine in 10 (91%) companies are now using generative AI in their business operations, a sharp increase from 77% reported last year, notes RSM Canada.
Despite the surge in adoption, many organisations report difficulties implementing AI at scale. The survey shows that 92% of companies experienced challenges during rollout, with data quality, privacy and security concerns, and internal skill shortages cited as leading obstacles.
"We found that respondents cited hurdles around data quality, skills gaps, and governance that companies must proactively address through strategic planning and investments," says Sergio de la Fe, enterprise digital leader and partner with RSM US.
Despite the continued popularity of artificial intelligence (AI) among Canadians CEOs, few have been able to adopt the technology throughout their organisation, according to a previous IBM report.
The RSM Canada report—based on a survey of 762 employers in the U.S. and 204 in Canada, conducted from Feb. 21 through March 4, 2025—also highlights significant readiness gaps in the sector.
More than half of respondents (53%) said they feel only “somewhat prepared” to adopt AI, while 10% admitted they are not prepared at all. Among the primary reasons for this lack of preparedness are insufficient in-house expertise (39%), absence of a clear AI strategy (34%), and issues with data quality (32%).
"While generative AI has opened up new frontiers of productivity across operations, it's crucial that businesses don't lose sight of the human element," says Rhys Morgan, consulting partner and North American CIO Services lead at RSM Canada. "AI works best when complementing human ingenuity – companies must upskill their workforce and implement rigorous oversight and AI governance measures to fully capitalise on AI's potential while mitigating risks."
There are also notable differences between Canadian and American firms. In Canada, 75% of companies reported feeling unprepared for AI adoption, compared to 61% in the U.S. Furthermore, 69% of Canadian firms found AI implementation harder than expected, versus 60% of U.S. respondents.
Many employers admit to underinvesting in AI training for workers, according to a previous KPMG report.
Despite these challenges, investment in AI remains strong. RSM Canada reports that 76% of companies have dedicated AI budgets, and nearly 88% of those expect their spending to increase over the next year. Almost half (47%) of firms are allocating a portion of their AI budget to consulting services, indicating that many organisations are seeking outside expertise to navigate implementation challenges.
David Brassor, managing director of technology advisory services for RSM Canada, notes that while the skills gap is beginning to narrow thanks to training and education initiatives, companies must continue investing in workforce development to sustain progress. Nearly half of respondents (45%) say they are providing education on the safe, ethical and responsible use of AI, while others are offering workshops, certifications and AI literacy programs to broaden employee capabilities.
"Companies recognise that AI is not a fad, and it's not a trend," says Joseph Fontanazza, risk consulting AI governance leader for RSM US LLP. "Artificial intelligence is here, and it's going to change the way everyone operates, the way things work in the world. Companies don’t want to be left behind."
GenAI “holds immense promise and has the potential to transform businesses across industries,” notes Gartner.
“However, operationalising it has proven to be challenging for most enterprises. Leaders need to prioritise business value, focus on AI literacy and responsible AI, nurture cross-functional collaboration, and stress continuous learning to achieve successful outcomes.”
AI is commanding such interest that IT decision-makers in Canada are now prioritising AI investment over cybersecurity spending, according to a previous report by Amazon.
