Isabelle Perreault leads a digital transformation practice at Stratford Managers Corp., focused on SMEs, and is the creator of the Digital Maturity Assessment, a diagnostic tool to assess an organization's digital readiness.
A 1-per-cent increase in labour productivity from adopting advanced technologies would yield $8-billion for the Canadian economy, according to a report released last week. The Information and Communications Technology Council's (ICTC) 2015 labour market outlook also confirmed that small- to medium-sized enterprises (SMEs) – the bedrock of our economy – aren't embracing digital technologies as fast as they should.
The main drivers affecting all businesses now include the increasing ubiquity of mobile devices, the mass adoption of cloud-based computing services and a focus on data-driven insights to create value for both businesses and their customers.
But many SMEs are in danger of being left behind. The ones I work with typically cite time and cost challenges, and a lack of relevant expertise. Some also demonstrate a general resistance to change. What helps them start to shift their thinking is an understanding of four key building blocks for embracing digital transformation:
A clear vision from the top
A recent study by MIT Sloan found that more mature organizations have leaders who are able to articulate the value of digital technologies to the organization's future. The mastery of the technology itself is less important than a deep understanding of its potential impact.
A 'test and learn' culture
Tied to the first factor, employees must also have a clear view of the changes required and be empowered and supported by a culture that is capable of change. Adopting a new technology, such as mobile, or providing customer service though social media can be daunting for risk-averse SMEs. But one can't foster innovation without some level of experimentation. The cost of doing nothing for too long almost always outweighs the cost of doing something.
A multiyear road map
Organizations achieving high levels of collaboration and buy-in around their digital vision have multiyear plans of action that look at technology as well as the business capabilities and processes required to succeed. This is especially important for SMEs that need to focus on one or two key areas to create significant improvements, rather than wasting resources on small, incremental changes in multiple areas.
Investing in the right skill sets
No amount of top-down strategy will deliver results if it's dependent on the wrong people for implementation. Businesses must look at the challenges ahead and evaluate whether their people have the right skills to address them. As the ICTC report suggests, a key to Canadian success in the digital economy will be to ensure that skilled talent is available to drive innovation and competitiveness.
The first generation of workers to grow up online are now entering their 30s. They've always had convenience and control at their fingertips, engaging and transacting at any time and from any place. Many business leaders are still determining how they will move from where they are to where they need to be to meet growing consumer expectations.
Industry leaders at the World Economic Forum in Davos this past January argued that in the digital economy, speed to market is the new currency of business. If you're the leader of an SME, you're not likely to be breaking new ground or be "first" on any large-scale innovation. But you can certainly commit to being a fast follower.