How Canadian execs are dealing with changing tech landscape

The majority of Canadian executives polled (84%) expect to divest non-performing business assets in the next 12 months, compared to 72% globally, says EY in a new report called Global Corporate Divestment Study 2018.

That number jumps to 95% when looking out over the next two years, it adds.

One reason is companies seek a competitive edge, says Doug Jenkinson, divestiture leader with EY Canada, in a press release. More businesses have “been conducting more regular portfolio reviews, motivated to shed non-performing assets and capitalize on the digital agenda. It’s exciting to see these reviews start to bear fruit.”

Ninety-two percent of Canadian respondents said the changing technology landscape has had the biggest influence on their divestment plans, the report says. An increasing number of domestic companies are looking at divestment as a way to raise capital and fund digital growth strategies, with nearly half (41%) of executives saying a recent major divestment was triggered by the need to fund new technology buys.

The proceeds of such divestments are often used to reinvest in the business to improve the company’s operating efficiency, the report says.

Read: How to divest properly

The report also finds companies are using data analytics to make more informed decisions about growth strategies and to drive “value through the divestment process”. Forty-three percent of respondents said the analytics provided a way to understand the true value of a non-core business and whether to exit them.

Read the full report here.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.