Canadian businesses are currently facing both promising opportunities for growth and significant challenges as they navigate the rapidly changing terrain of digital transformation and competitive manufacturing. Notably, advancements like artificial intelligence (AI) and shifts in operational efficiency represent focal points for differentiators among successful firms.
One of the standout examples of adaptability is Thomson Reuters, which has recently reported notable changes in its return on capital employed (ROCE). The company’s ROCE—a key measure indicating how efficiently it is generating profit relative to its capital—has risen to 13%, marking an upward trend and giving confidence to investors. This increase is especially significant considering it had achieved just about the average return for the professional services industry at 15%.
The rise of ROCE from Thomson Reuters indicates its status as what might be described as a “compounding machine”—a business reinvesting its earnings at higher rates to fuel future profitability. Over the past five years, the company has showcased remarkable efficiency improvements with its ROCE climbing by 121% even as the capital employed has remained relatively stable. Investors have taken notice, with the company delivering 139% total returns during this time frame, prompting speculation about future prospects for sustained growth.
Yet, as opportunities bloom, threats also surge. Cybersecurity, as noted by Justin Kok, chief information security officer at Aviva Canada, is more pertinent than ever. Kok has pointed out how cybercriminals are increasingly leveraging AI to bolster their tactics, making them more sophisticated and challenging for businesses to counter. Phishing attacks, for example, have evolved to exploit common human weaknesses, setting the stage for potential ransomware attacks.
One key point Kok emphasized is the surge of social engineering attacks. These attacks often start with AI-enhanced reconnaissance efforts, leading to infostealing campaigns or deploying malware. A concerning aspect is the likelihood of businesses unknowingly becoming collateral damage by having their suppliers compromised. Companies are being advised to tighten security around their supply chains, ensuring thorough vendor risk assessments are part of their approach.
Ransomware remains another pressing issue, perpetuated by the allure of profit for criminals and its ability to target various sectors effectively. Critical industries, including finance, healthcare, and energy utilities, remain particularly vulnerable due to the sensitive nature of the data they handle. For example, healthcare organizations are prime targets because of the wealth of personal information they store.
Both the challenges highlighted by Kok and the opportunities presented by firms like Thomson Reuters showcase the dual nature of the current Canadian business environment. Realizing growth will require both operational agility and vigilance against security threats.
Various industries are now recognizing the necessity to reinforce their cybersecurity foundations. Aviva, for example, is stepping up to offer cyber coverage initiatives directed at businesses and individuals. This includes specialized policies to counter socal engineering fraud and collaboration with experts to provide training and awareness programs.
Companies can no longer afford to treat cybersecurity as merely compliance or IT department concern. It must be viewed as fundamental to the entire organization’s wellbeing. Firms need strong, proactive strategies, from round-the-clock monitoring services to employee training, ensuring everyone is equipped with skills to identify threats.
Both the manufacturing and service sectors are undergoing transformations, compelled to adapt not merely to technological advancements but also the escalated demand for cybersecurity. Success will depend on the ability of these organizations to leverage the advantages offered by modern technology like AI—while also addressing the vulnerabilities they introduce.
Thomson Reuters’ recent performance, combined with insights from industry leaders like Kok, reinforces the notion of vigilance and adaptability as core principles for Canadian businesses aiming to thrive amid considerable change.