In the last five years, artificial intelligence (AI) has seen remarkable growth. Now that the excitement over its limitless potential has begun to settle, organizations are focussing on high-value applications.

To stay ahead of this ever-evolving digital economy, there are a few key things small- to medium-sized Canadian tech companies should consider doing:

• Create detailed implementation roadmaps
• Identify and address security and compliance risks
• Embrace emerging technologies
• Explore value-driven AI applications
• Secure funding and scale AI with measurable ROI

AI is revolutionizing industries around the world, and Canadian businesses are no exception. From enhancing operational efficiency to driving innovation, AI’s integration into business processes is reshaping the economic landscape in Canada. Understanding how the solutions can work for you, and how to optimize their implementation, can bring the benefits of these platforms to the forefront and significantly reduce challenges along the way.

Artificial intelligence is all about teaching machines to think and act like humans. It uses smart technologies, including machine learning and neural networks to make that happen.

Some common AI applications include:

• Agentic AI
  • AI agents operate independently to perform tasks such as responding to customer inquiries, managing orders, and building lead generation lists.
• Generative AI
  • Tools that create content, such as text, images, and code, enhancing creativity and productivity.
• Computer vision
  • Technologies that enable machines to interpret and understand visual information, used in areas like autonomous vehicles and facial recognition.
• Natural Language Processing (NLP)
  • AI systems that understand and generate human language, improving communication tools and customer service.
• AI-driven cyber security
  • Enhancing security measures by detecting and responding to threats in real-time.

AI-powered chatbots are more and more present in customer services due to their ability to provide instant, personalized responses. They operate 24/7, ensuring customers can receive support at any time. By handling common queries quickly, chatbots reduce wait times and enhance customer satisfaction. Advanced chatbots can also use customer data to offer tailored recommendations, making interactions more meaningful.

AI optimizes supply chain operations by predicting demand fluctuations, helping businesses maintain optimal inventory levels, and reducing waste. Companies can build a more efficient, resilient, and customer-centric supply chain by leveraging AI to:

• Analyze logistics data – Determine the most efficient delivery routes, saving time and fuel costs.
• Evaluate supplier performance – Suggest post-evaluation improvements to ensure a reliable and cost-effective supply chain.
• Enhance defect detection – AI detects defects better than humans; identifying issues early in the manufacturing process boosts productivity, quality, and cuts down on inspection costs.
• Lower inbound delivery costs – Automating the process of receiving goods reduces delivery expenses, spots anomalies, and speeds up data updates for quicker processing.

As tariffs and countermeasures take effect, trade tensions are creating challenges for businesses, impacting costs and market stability. Tech firms of all sizes can use AI to optimize supply chains, predict market trends, and enhance decision-making, helping to mitigate the impact of trade uncertainty. Through AI-driven insights, businesses can adapt to changing trade conditions and maintain competitiveness.

AI plays a crucial role in fraud detection by continuously monitoring transactions and activities for suspicious behaviour. Machine learning algorithms can recognize patterns associated with fraud, flagging them for further investigation. Automated alerts enable businesses to respond swiftly to potential fraud, minimizing losses and enhancing security.

AI can enhance marketing efforts by segmenting customers based on their behaviour and preferences, allowing for targeted campaigns. It personalizes content and recommendations for each customer, increasing engagement and conversion rates. AI also analyzes the effectiveness of marketing campaigns, providing insights to optimize strategies and improve results.

While there is certainly an abundance of business-related tasks AI can help your organization with, there are also tech applications that you can leverage and ease into using AI on a regular basis.

• Automating code development: Whether you’re building a new feature or cleaning up legacy code, AI can help you write, complete, and refactor code with minimal effort.
• Streamlining code review: Instead of relying solely on manual checks, AI can assist in catching bugs, flagging security issues, and ensuring code quality.
• Accelerating data analysis: From cleaning raw datasets to generating visual insights, AI makes it easier to work with data and uncover trends.
• Supporting R&D efforts: Research teams can use AI to summarize technical papers, generate prototype code, and explore algorithm improvements more efficiently.
• Enhancing technical learning: Developers can get real-time explanations, debug code faster, and receive personalized learning paths to grow their skills.
• Boosting creative output: Whether you’re naming a new product or drafting technical documentation, AI can help spark ideas and speed up content creation.

AI has already taken over many aspects of business operations and will undertake new ones. Human interactions will be simulated to a greater degree – rather through text, audio, or visual mediums. From supply chain and sales to finance and HR, AI can innovate every part of your business. In the tech sector, AI has impacted small- to medium-sized businesses (SMBs) in several ways:

AI-powered automation has revolutionized the way tech SMBs operate in Canada. By automating repetitive tasks such as data entry, scheduling, and inventory management, businesses can significantly reduce operational costs and minimize human error.

For example, AI algorithms can analyze large datasets much faster than humans, providing real-time insights that help businesses make quicker decisions. This efficiency allows SMBs to allocate resources more effectively, focusing on innovation and strategic growth.

AI-driven analytics can process vast amounts of data to identify patterns and trends that might not be immediately apparent. By understanding customer behaviour and preferences, SMBs can tailor their products and services to meet market needs more precisely. This leads to increased customer satisfaction and loyalty, while also gaining insights that can help evaluate the return on AI investments over time.

For instance, AI-powered chatbots and virtual assistants speed up responses to customer inquiries, enhancing the overall customer experience. In doing so, they allow employees to focus on more complex tasks, contributing to faster and more effective decision-making.

For tech SMBs, staying competitive in a rapidly evolving market is crucial. AI can provide your business with the tools to innovate and set itself apart. By leveraging AI technologies, SMBs can develop unique solutions and services that cater to specific market niches. This agility and ability to adapt quickly to changes can give them a competitive edge, helping them attract and retain customers in a crowded marketplace.

While AI offers a lot of opportunity for tech SMBs, it’s not without its obstacles. All of them can be overcome, but it requires some strategic planning up front to maximize the value you get from AI.

Adoption barriers Despite the clear benefits, many Canadian SMBs can be hesitant to adopt AI for several reasons including:

• Concerns about the high initial costs of AI implementation, especially without clear projections of ROI.
• The lack of technical expertise required to manage these systems, or a general lack of understanding of the effort required to implement the technology.
• The potential for job displacement
• Possible risks associated with AI such as data privacy issues and ethical concerns. AI-driven cyber threats can be sophisticated and hard to counter.
• An over-reliance on AI can lead to challenges in human oversight

Overcoming these barriers requires targeted support and education to help SMBs understand the long-term benefits and mitigate the risks.

Implementing AI solutions can be challenging for tech SMBs due to various barriers:

• Data quality and availability: Having the right data – clean, relevant, and well-structured – is essential for AI to work effectively. Many tech SMBs struggle with fragmented or inconsistent data, which can limit the success of even the most promising AI initiatives.
• Financial investment: While cloud-based tools have lowered the barrier to entry, AI still requires thoughtful investment – whether in skilled talent, software, or time. For smaller teams, balancing innovation with budget constraints can be tricky.
• Organizational readiness. Adopting AI often means rethinking workflows, roles, and even company culture. Resistance to change, uncertainty about ROI, or lack of internal alignment can slow progress.

Addressing these barriers involves providing access to affordable AI solutions, training programs, and fostering a culture of innovation within the organization.

Adopting AI can be overwhelming, but you don’t need to do everything at once; start small, learn as you go, and build momentum over time. This roadmap outlines the essential steps to help you get started and grow at your own pace.

• Identify needs: Determine specific business areas where AI can add value (e.g., customer service, data analysis, automation).
• Set goals: Define what success looks like for your business. Whether it’s saving time, cutting costs, or enhancing customer experience, having clear goals will guide your efforts
• Budgeting: Allocate resources for AI projects, including software, hardware, and training. Explore available grants, government programs, or private partnerships to offset initial costs.

• Training: Invest in training for your team to understand AI basics and advanced applications.
• Hiring: Consider hiring AI specialists or partnering with AI consultants to fill in the gaps.

• Data collection: Gather relevant data that AI systems will need to learn and make decisions.
• Data cleaning: Ensure data quality by cleaning and organizing it properly, but don’t worry about having perfect data from day one. Focus on continuous improvement.

• Research: Explore AI tools and platforms that suit your business needs. Look into options such as machine learning, natural language processing, and predictive analytics.
• Pilot projects: Start with small-scale pilot projects to test AI applications and measure their impact before committing to a full rollout.

• Integration: Integrate AI tools with existing systems and workflows. Make sure your team is comfortable with the changes.
• Monitoring: Continuously monitor AI performance and adjust as needed. AI systems improve with feedback and iteration.

• Expand: Once you’ve seen success in one area, look for other parts of your business where AI can help. Consider securing additional funding or forming strategic partnerships to support broader adoption.
• Continuous improvement: Keep refining AI models and processes based on feedback and performance metrics.

• Regulations: Ensure compliance with Canadian regulations and ethical standards in AI usage. Compliance not only safeguards data but also builds trust with customers.
• Transparency: Maintain transparency with stakeholders about AI processes and decisions.

• Conduct risk assessments: Regularly evaluate potential security risks associated with AI systems. This includes identifying vulnerabilities in data storage, processing, and transmission.
• Implement robust security measures: Deploy advanced security protocols such as encryption, multi-factor authentication, and intrusion detection systems. These measures help protect sensitive data from unauthorized access.
• Incident response plans: Develop and maintain incident response plans to address security breaches quickly and effectively. This includes steps for containment, investigation, and recovery.

• Support your systems: AI needs care. Set up processes to monitor performance and address issues as they arise. This proactive approach helps mitigate risks before they escalate.
• Updates: Regularly update AI tools to keep up with technological advancements.
• Leverage government support: The Canadian government has launched programs such as the AI Compute Access Fund – a $2 billion federal initiative to facilitate the development of made-in-Canada AI products and solutions – to support AI adoption among SMEs. These initiatives provide funding and resources to help businesses integrate AI technologies efficiently.

The technology sector in Canada is experiencing a significant transformation due to AI. The sector is benefiting from increased investments and a growing pool of skilled professionals, helping businesses improve decision-making, optimize processes, and create competitive advantages. Despite challenges, AI offers significant opportunities for companies to thrive in the digital economy and achieve sustainable growth.

At MNP, our team of experienced advisors offers comprehensive support to help you leverage AI technologies, while ensuring regulatory compliance and robust security measures. With MNP’s help, you can stay competitive and drive innovation in this digital economy.

To learn more, contact Zahra Bhanji, CPA Partner, at [email protected] or Soumya Ghosh, MBA, PMP, Partner, at [email protected]