Skip to main content
Sponsor Content

Just 38 per cent of Canadian companies are executing on a digital strategy that will keep their businesses current and ward off disruptors, according to an IDC Canada and SAP Canada report, released in April, that surveyed 300 senior leaders, including IT and chief investment officers, at companies across the country.

"That's a cause for concern," says Tony Olvet, group vice-president of research for IDC Canada. "There needs to be less talk and more action."

Currently, about half of Canadian businesses are planning and building a digital transformation strategy, while 12 per cent have yet to formulate a digital plan. That could include digitizing how customers interact to purchase products and services, using software or the cloud to improve back-end efficiency or mining data, such as sales, to plan or fuel innovative ideas.

Story continues below advertisement

While that is a substantial improvement over an December, 2015 IDC and SAP survey – that report found that just 17 per cent of companies were making digital transformation a priority – it's still not sufficient, says Sam Masri, national vice-president and head of industry value engineering for SAP Canada.

"There's a false sense of optimism that we have to be cautious about," he says. "While we might think we're doing well, other economies are relatively ahead of us in terms of sponsoring digital innovation at the CEO and board level."

Part of the problem is that small and mid-sized businesses think disruption is a big-business issue, so they don't give it much thought. But technological innovation is having an impact on enterprises of all sizes, and has already affected retail, transportation, hospitality and media companies across the board.

"No one is immune," Mr. Masri says. "Even small businesses are being displaced by startups."

Canada lags behind

Compared with the rest of the world, global organizations are relatively further ahead than their Canadian peers in terms of dedicating a budget to support digital transformation initiatives, Mr. Masri says.

More concerning, while 62 per cent of senior executives believe digital innovation is on their company's agenda, just 49 per cent of customer-facing managers and 43 per cent of those in operations said the same thing.

"It shows a very worrying disconnect," Mr. Masri says. For companies to truly succeed in implementing digital transformation, everyone needs to be on board.

Meanwhile, innovation is inconsistent across industries. Finance, media and telecom have been forced to go digital, but Canada's retail sector is out of step with other sectors, IDC's Mr. Olvet says.

"I'm still amazed at how much money is poured into bricks-and-mortar retail," he says.

Booming industries need to be especially mindful of disruption. Companies are often slow to adapt because they follow the "If it ain't broke, don't fix it" theory, and focus on profit, rather than innovation, during the good times.

Innovation the right way

Of course, transforming a legacy business into one that capitalizes on new technology is no easy task and many companies make mistakes early on in the process, Mr. Masri says.

Story continues below advertisement

To innovate successfully, companies often must look outside their organization for help. Partnering with a university or tapping into resources from a supplier could work, for instance. Also, don't be afraid to spend the research and development budget, even if it's on consultants to help move things along. Many companies set aside funds for innovation, but end up not using the money, Mr. Olvet says.

It's also important to embrace and champion the process of change. Celebrate small wins and be sure to announce when a digitized process saved time or scored a new sales lead, Mr. Olvet says.

Ultimately, no one likes change, but those companies that don't innovate will be replaced by ones that do.

Sometimes, Mr. Masri says, the biggest challenge is to convince those at the top that they need to change:  "You talk to companies and they say 'Nobody knows my business better than I do.' But if you keep thinking that way, there's a good chance you'll be out of business."

Download the IDC report for more information on how Canada is waking up to digital transformation.


This content was produced by The Globe and Mail's Globe Edge Content Studio, in consultation with SAP. The Globe's editorial department was not involved in its creation.

Report an error