According to a new study, Canadian small businesses’ continued push into the digital realm could do wonders for Canada’s economy.
The increased digitization within Canadian small businesses can add CA$70 billion to the country’s GDP by 2024, according to the findings of a recent Cisco commissioned study conducted by IDC. The 2020 Small Business Digital Maturity Study says 70 per cent of survey respondents representing Canadian small businesses surveyed are accelerating the digitization of their business because of the pandemic, while 97 per cent said their business has become more technology-dependent due to the pandemic.
The study also says that 67 per cent of Canadian SMBs are only in stage two of IDC’s Digital Maturity Framework, the Digital Observer Stage, where “digital efforts have started but remain tactile and in bite-sized initiatives.”
“Small businesses in Canada lag behind the UK, the U.S. and Germany in terms of digital maturity,” said Lissa Ricci, head of small business at Cisco Canada, in the report. “While the majority of small businesses are aware of the importance of digitization, they haven’t taken the important steps to embed digital technologies in their businesses. What the research tells us is that Canadian businesses that were more advanced in their digitalization journeys prior to COVID-19 are now showing the highest rate of survival, through business agility and resilience.”
Seventeen per cent of respondents said their top priorities include delivering improved customer experiences and improving operations and delivery. In comparison, 16 per cent say their focus is on improving finance viability or predictability.
Daniel-Zoe Jimenez, assistant vice-president, head of digital transformation and SMB research, at IDC, said digitization is a matter of survival.
“While the research shows many small businesses are making progress, they should increase focus on digitizing processes and operations through the use of digital technologies to ensure business continuity and future resiliency,” he said.
The findings of the study also reveal that the top technology solutions investments small businesses will make in the next 18 months include 34 per cent in solutions to help employees work remotely and/or automate core processes, 30 per cent in improving processes automation and digitalization to be less dependent on human intervention and 28 per cent in digital technologies that allow them to sell/improve online sales.
However, the investment is largely being held up due to challenges, including not knowing where to start, cultural resistance to change, and a lack of budget or management commitment. Fifty-three per cent of Canadian businesses know they need technology to stay relevant in the current economic environment but “don’t know where to start,” a Salesforce survey had revealed.
For small businesses learning how to adapt to the current climate and wondering where to start, Cisco and IDC recommend developing a three-year technology roadmap to build resiliency. As part of this roadmap, Cisco and IDC suggest prioritizing the critical business processes to automate and evaluating the right technologies to invest while focusing on empowering remote employees/workforce, building a secure e-commerce platform and a robust cybersecurity network.
Small businesses need to leverage financing and remanufactured equipment to help with cash flow and budget requirements and to find the right technology partner for a project.
The eight markets included in the survey were Canada, Brazil, Chile, Germany, France, Mexico, United Kingdom, and the USA.