Closing the digital gap

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Technological change is happening at an ever-increasing pace. To

remain competitive and ensure their future, companies can’t just

adopt digital technology; they must embrace it. The mere use of

digital tools is not enough: to become “digitally mature”, companies

must also implement a robust digital culture to fully leverage their

digital investment and manage the attendant change.

Keep up or fall behind

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Digital maturity : Assessment of a company’s degree of digital transformation.

The Massachusetts Institute of Technology (MIT), in cooperation with Capgemini

Consulting, has developed a methodology to measure digital maturity.

Digital intensity : Use of digital tools such as client- and supplier-relationship

management systems, data collection and use to inform decisions,

digitization and integration of business processes.

Digital culture : Ability to implement changes such as a new strategy or vision,

to plan, to support management, to foster an environment that supports risk-

taking and innovation, training and continuing education.

Digital maturity is described in terms of digital intensity and transformation management. Technocentric companies achieve better financial results than techno-shy ones. One quarter of all companies combining low digital intensity and poor transformation management have seen their income drop over the last few years.

What is digital maturity?

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The Business Development Bank of Canada (BDC) is a government financial institution specifically set

up to complement private banking services for entrepreneurs. The BDC recently released a report

on digital penetration within Canadian SMEs, defined as companies with less than 500 employees.

Hoping to encourage these companies to adopt new technologies and make the technological shift

to spur growth, the BDC surveyed over 2,000 entrepreneurs on their current digital status. Suffice it

to say that there is room for improvement in most of the companies surveyed. Even as technological

change has occurred increasingly rapidly since the beginning of the century, and as connectivity,

automation and data have acquired strategic importance, most SMEs still show lagging digital maturity.

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Four digital maturity profiles

TECHNO-SHY COMPANIES ADVANCED COMPANIES

CONSERVATIVE COMPANIES TECHNOCENTRIC COMPANIES

14% 19%

10%57%

of companies of companies

of companiesof companies

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The advantages of digital transformation translate to hard numbers:

Canadian companies with the most advanced digital maturity are

62% more likely to grow their sales significantly, 52% more likely to

enjoy high profits, and three times more likely to have innovated in

their industry. On the flip side, SMEs who did not invest in digital

transformation over the last three years are more likely to have seen

their sales plummet.

The power of digital transformation

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Despite the demonstrated advantages of investing in technology, just 19% of Canadian

SMEs are digitally mature, while their United States competitors fare no better, at 18%.

But this national average hides huge gaps between provinces: Quebec SMEs are

leaders in digital transformation, at 26%, while BC and Atlantic Canada trail far behind,

at 15%.

Of course, company size is a factor in high level of digital maturity (19% of Canadian

SMEs compared to 34% of large companies). The industrial sector also plays a role:

services companies other companies post higher maturity rates than goods-producing

companies.

Canadian businesses: Room to grow

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Atlantic CanadaQuebecOntarioPrairiesB.C. and North

15%26%19%17%15%

Setting social media presence aside, it appears that only

a minority of companies have fully integrated digital technology

in their operations. Overall, 57% of SMEs of all sizes display

low digital maturity, which means that they do not use

tools for digital marketing, operational management or

productivity management such as CRM and ERP systems,

data storage or analysis tools, or digital design, production

and automation tools.

Digital tools: A slow integration

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Communications tools: Digital marketing tools: E-commerce tools:

Popular digital technologies for Canadian businesses

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• Email

• Social media

• Mobile apps

• Websites

• E-commerce website builders

• E-commerce research tools

• Inventory tracking and shipping tools

• Email automation

• Ad banners on websites

• Search engine optimization

• Email marketing

• Marketing automation software

• Office software (e.g., Microsoft Office, Apple iWork)

• Project management software

• Online collaboration tools

• Management software (e.g., ERP, CRM & SCM systems)

• Accounting and invoicing software

• Web, social and video content analytics

• Predictive analytics, data mining and machine learning

• Cloud computing

• Online data backup services

• Computer-aided design (CAD), manufacturing (CAM), engineering (CAE), etc.

• Daily management systems

• Digital dashboards

• Industrial Internet of Things (wireless sensors and analytics)

• Automation technologies

CUSTOMER-FACING ACTIVITIES:

BACK-OFFICE ACTIVITIES:

Digital production tools:Business management and productivity tools:

Analytical, data storage and data management tools:

The BDC has identified five crucial steps to digital transformation:

DEFINE AND SHARE YOUR DIGITAL VISION.

Learn about digital technologies

Focus on customer needs

Build a change team

Look at the data you already collect

Measure your performance

Map out your processes

Line up resources and financing

Train youremployees

Keep track of useful information

Keep looking for change

Create an action plan

Make gradual changes

Rewardrisk-taking

Use data for decision-making

Adapt your business model

INVEST IN TECHNOLOGY.

ESTABLISH A CULTURE OF CHANGE.

UNLEASH THE POWER OF DATA.

WORK FOR CONTINUOUS

IMPROVEMENT.

The five steps to digital maturity05

01 02 03 04 05

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La Fabrique Arhoma

Arhoma, a Montreal bakery with some one hundred employees,

needed a tool to make order-taking more efficient and to help

it optimize its production of breads and pastries. As it couldn’t

find an off-the-shelf solution to fit its industrial logic, the

company turned to a bespoke Web application solution.

ACHIEVEMENTS:

RESULTS:

Analysis of information cycle and internal processes.

Work on usability and user experience for enhanced operational efficiency.

System development.

User tests and performance measures.

Paperless processes and optimized information flow.

Customer service staff freed up to work on pitching new offerings and increasing sales.

Efficient, accurate and quick order processing.

Sharp drop in errors, from order entry to delivery through production.

CASE STUDY

60 PROMENADE DU PORTAGE

819 205-1800

110 JEAN-TALON STREET WEST

514 272-0979

323 KERR STREET SUITES 101-102, 202

647 477-3401

OTTAWA - GATINEAU MONTREAL TORONTO

Digital transformation done right• 150 in-house digital experts committed to results.

• Over 1000 projects delivered across multiple industries.

• 15 years of digital services for over 400 customers.

WEBSITE CREATION

CUSTOM SOFTWARE DEVELOPMENT

DIGITAL TRANSFORMATION

WEB APP DEVELOPMENT

EMBEDDED SYSTEMS, IOT AND M2M

MOBILE APP DEVELOPMENT