All aboard! How digital tech is driving change

The pace of technological change is accelerating. Game-changing innovations are the norm. Artificial intelligence, autonomous and electric vehicles, big data analytics, 3D printing. All these new technologies are changing the way we do business across every sector of the economy.

Similar technological disruptions have occurred only a few times in history. They include the development of:

• Steam power
• Electricity
• Internal combustion engines
• Computers

We’re now in the early stages of another transformation with digital technologies.

Before going any further, I’d like to  define what we mean by digital technologies. 

When we talk about digital technologies, they could be any information and communication technologies (ICTs) to support or accomplish a business activity. They can be divided into front-end, customer-facing, and back-office activities. 

The list is not exhaustive. Digital technologies can be more than that. But I’ve included it to give you an idea of what we’re talking about. 

To better understand how these changes are affecting Canadian companies and evaluate their level of digital maturity, the Business Development Bank of Canada (BDC) surveyed 2,000 Canadian small and mid-sized businesses. 

Digital maturity measures how advanced a company is in its use of digital technologies. It looks at two things:

Use of digital technologies: How much technology a company uses in its operations?

Digital culture: How well equipped a company is to implement change. Does it have a strong strategy and culture? Appropriate planning and training? 

The combination of digital intensity and digital culture determines a company’s level of digital maturity.

By combining digital culture and digital intensity, we came up with four profiles of digital maturity: conservative, techno-shy, technocentric and advanced. 

Looking at all Canadian businesses, we found that:

• 19% are advanced. They score high on digital intensity and digital culture, use digital technologies effectively to run their businesses and have the culture to drive change.
• 10% are technocentric. They have a lot of digital technology, but lack the culture to fully benefit from the investment.
• 14% are techno-shy. They have the culture to implement change, but haven’t invested enough in technology yet. 
• 57% of businesses are digitally conservative. They have low digital intensity and digital culture scores, make limited use of digital technologies, and have trouble managing and driving cultural change.

There is some concerning news here. Conservative companies are the largest group in our survey, yet they’re at the greatest risk of falling behind. Most of the ones we talked to had already seen their sales drop off. At best, their future projections were flat. At worst, they were going to fall even further.

Now here’s some good news. The second highest-scoring category, at 19%, was advanced. 

We found that, over the past three years, digitally advanced companies were: 

• 62% more likely to have enjoyed high sales growth
• 52% more likely to have enjoyed high profit growth
• 70% more likely to export
• 329% more likely to have innovated

The first step to improving your digital maturity is to measure your current performance. You can’t improve what you don’t know. 

BDC has just launched a free Digital maturity assessment tool you can use to compare your business to other Canadian firms in your industry and identify opportunities for improvement. 

It’s free, simple and easy to use. It takes around four minutes to complete on our website.

The tool uses the same framework as our Digitize Now study to determine where your business fits in the four levels of digital maturity. 

It asks 19 relatively simple questions about your business, your culture, and how you interact with customers and partners. It then compares your results with those of other companies in your industry. 

Entrepreneurs get one of the four profiles: conservative, techno shy, technocentric and tech advanced to see where your business stands.

Digital technologies are no longer just a trend or some distanced perspective. The digital revolution is happening now and entrepreneurs who are investing in digital technologies are those who are going to win and remain competitive. 

The good news, it’s not too late to act. Canadian SMEs are on par with their peers in the U.S. But Canadian businesses need to act now!

A great way to start is to use BDC’s Digital maturity assessment tool to see where they stand And then start working to improve to get your business to advanced.