It wasn’t that long ago that Ceridian, a human-resources software company, was like a melting glacier. Its business was declining, its revenues slipping and its products becoming irrelevant.
Today, Ceridian is growing in revenue and clients, thanks to management decisions that make it operate more like a startup. Rather than fight for a place in a declining marketplace, David Ossip, CEO of Ceridian Canada Ltd., had the company pivot toward offering software-as-a-service. He also restructured Ceridian's management and even its physical environment.
"Any organization today has to operate with the assumption that their product strategy and delivery [have] a shorter shelf life than in the past. That has to be part of the company's decision-making," Mr. Ossip says.
Call him a CEO of the Fourth Industrial Revolution — a series of changes transforming the business world through digital technology, the Internet of Things and cloud computing. Revolutions always cause disruption, but the fourth seems to be moving at warp speed compared with the earlier revolutions. It can be especially challenging — and rewarding — for medium-sized businesses. .
Medium-sized businesses face a particularly challenging future in the next five years or so because all of the traditional forces that buffet the economy now seem subject to disruption — politics, investment decisions, technology and economic cycles. Add to this the fact that the technological revolution really is well underway — a world where sensors, augmented intelligence, distributed power that comes from off the grid, and independent decision-making are all increasingly important.
To set themselves up for success in the next five years, leading medium-sized businesses will have digital transformation ingrained in their company's DNA. Advanced digital technologies will allow mid-size businesses to accelerate new product and service developments, because they will have the tools in place to make their internal data applicable to the decision-making process. The Fourth Industrial Revolution is faster than its predecessors. In the first revolution, steam and hydraulic power changed industry, causing great social upheaval; it was followed by the second revolution, when electricity altered production and people moved to cities; and the third, when electronics and mass communication took hold, led to expanded global trade and worldwide trends.
Agility will play a key role in making innovative decisions in the Fourth Industrial Revolution, especially because the changes that come are often less predictable than in past upheavals. Some of the most successful businesses today are based on ideas rather than goods — a taxi service that owns no cars, a bed-and-breakfast service that owns no rooms, on-line media that prints no papers and broadcast no shows but reach hundreds of millions of people.
"The reality is that [medium-sized businesses] can rarely insulate themselves from market forces, developments and disruptions," says Plamen Petkov, vice-president for the Ontario branch of the Canadian Federation of Independent Business (CFIB). "Depending on what technology they need, businesses may not have the in-house capacity and may have to turn to an outside expert for help."
A survey commissioned by Dell Technologies found that some businesses have fallen behind in meeting the digital revolution's challenges. Yet, many are making up for lost time. Dell Technologies research, conducted by U.K.-based technology research consultancy Vanson Bourne, surveyed 4,000 businesses in 16 countries, including Canada, across 12 industries. Dell Technologies used the research findings to develop a worldwide Digital Transformation Index, plotting the progress of companies and industries. The study found that 73 per cent of the companies surveyed agree that it should be a priority to come up with a centralized technology strategy for their business. Two-thirds (66 per cent) plan to invest in IT infrastructure and digital skills leadership, and 72 per cent are expanding their software development capabilities.
The question is how to do it and get it right. Medium-sized businesses can be challenged in making the right decisions for digital growth not just because of their size but also because of the nature of medium-sized businesses. More than a generation ago, in 1983, Neil C. Churchill and Virginia L. Lewis noted in the Harvard Business Review that while businesses can vary widely in their size and ability to grow, they tend to be more independent in their decision making structures than larger businesses.
It can be tricky for medium-sized businesses to be nimble like startups while still making an impression in their market niche that rivals what larger competitors can do, says Carolyn Rollins, Dell EMC's director of enterprise and commercial marketing. It's partly because of financial restrictions. "If you're hampered by budget restrictions, the challenge is to create an environment that has the same velocity as a startup," Ms. Rollins says.
One way to overcome both budget restrictions and the limits that can be imposed by having a decision-making structure larger than a startup's is to work closely with your company's chief information officer, Ms. Rollins notes.
"It comes down to trusting your CIO with decisions that affect the long-term strategy and development of the company," she says. "It means having that person sit at the table with the executive leadership team, having them provide leadership and input into the overall direction. A good CIO will become a stakeholder and a thought leader in the business. The most successful businesses we see are ones that have done that."
A good CIO and leadership team will be able to integrate digital goals across all departments of a medium-sized business. "You want all employees to understand the capabilities of technology," Ms. Rollins adds.
In fact, growth and technology decisions at medium-sized businesses should be made after consulting beyond the inner circle of the CEO and the CIO. Kevin Peesker, president of Dell EMC Canada, notes that the increased pressure on medium-sized companies to adapt to the digital world means they need to overcome a wider range of barriers rather than simply choosing between a few competing technologies.
For example, according to Dell EMC's research, three of the top five barriers to digital transformation are existing technology that can't keep up with the speed of business, inadequate in-house expertise, and data privacy and security issues.
Organizations that fail to embed digital goals into all their departments can suffer from one-off, uncoordinated, shadow IT deployments. This in turn can lead to poor decisions, wasted investment and duplication, Mr. Peesker warns. "Technology is deployed in silos; often, similar solutions are deployed across multiple divisions through different vendors without anyone realizing it." The medium-sized firm's attack plan for the revolution then becomes too scattered.
"While it may feel like you're doing well against your department's digital goals, you're actually doing a huge disservice to the well-being of the entire organization," Mr. Peesker says. "An IT partner who can see and support the end-to-end transformation can minimize risk, quicken pace of delivery and control costs much better than acquiring solutions piecemeal."
Making the right decision can be critical in a key area, such as cybersecurity. Even medium-sized businesses are at risk of being hacked. The data collected to develop their business holds key information needed for strong decision-making.
"The most valuable commodity for business in the 21st century is the data that companies generate and retain," says Conor Duffy, Dell EMC's global solutions strategist. "To better manage the ever-evolving nature of cyber threats, businesses need to incorporate cybersecurity into their company culture."
To grow successfully, organizations have to make decisions quickly and not be afraid to make their own decisions, says Ceridian's Mr. Ossip. "You need a management team that understands growth and understands process," he says. "You need to know how to build teams rather than doing all the work [yourself]. You also need an organization where everyone cares about the company — a performance-driven company where outcomes are measured carefully."
Decision makers should also be realistic about what they're deciding, says Willow Sheremata, associate professor of policy at York University's Schulich School of Business. "It's quite common that people put all their work into making decisions without [determining if] those decisions are feasible. They should remember that they're probably going to spend much more time implementing their decision than making it," she says.
Perhaps the most important element to good decision-making is the simplest one, she notes. Tell the truth. Businesses benefit when they ask themselves honest questions about their direction, and they benefit even more when they respond to them with honest decisions about their future needs.
For more business insights, visit Dell.ca/MediumBusiness
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