In Canada as well as other places in the developed world, there is a strong shift towards reliance on digital technologies to streamline business practices.However, there is a significant lag in Canadian small and medium enterprises (SMEs) to adopt these technologies.
Although Canada’s SMEs (defined as less than 500 employees) comprise 99.8% of all registered Canadian businesses, they do not represent innovation in the same proportion. Only 38 percent of small businesses (1-99 employees) and 56 percent of medium-sized businesses (100-499 employees) reported recent innovations in their product, process, organization, or marketing processes. Productivity in Canada also lags behind others (see this analysis from the National Resource Council) and is contributing to the innovation gap of SMEs in Canada.
The Conference Board of Canada published a report entitled Adopting Digital Technologies: The Path for SMEs to discuss the importance of digital technologies in boosting innovation and productivity. They offer six best practices that were the result of interviews with small business owners who reflected on lessons learned after going through the process of technology adoption for their business. The following is an overview of the report’s findings.
Competitiveness, productivity, innovation, and digital technologies
Digital technologies must be adopted to maximize productivity and innovation in Canadian SMEs. The report cites that Canada currently lags in competiveness, dropping 5 places from 2009 to 2012 on the Global Competitiveness Index (GCI), and ranking 14th of 144 countries. Competitiveness is directly related to productivity, which in essence is doing more with less energy. Being productive keeps businesses cost-efficient, and adapting different ways to solve a problem is essential to productivity. In this manner, productivity naturally leads to innovation, which is something new that adds value to the process or product. Innovative approaches to solving problems are dramatically enhanced when digital technologies are used as a vehicle for innovation. This can be in the form of any information and communications technology (ICT), including website management, social media, software applications, or computer equipment. As you can see, all of these concepts – competitiveness, productivity, innovation and digital technologies – are interrelated in establishing a successful business in Canada.
Biggest hurdles for Canadian SMEs in technology adoption
The report highlighted barriers that SMEs encountered, some of which are perceived issues that can be addressed by educating business owners on the facts. A few of the barriers are:
- Time – Although this is an actual barrier, the time required to implement new technologies must be seen as an investment into future productivity.
- Money – Some of the SMEs that were interviewed in the report confessed that they were more likely to hire another employee than implement new technology to increase productivity, which leads them further away from the path to progress with technology.
- Fear and resistance – It is very natural for many people to have an aversion to technology, and business owners are no different. They reported feeling afraid of technology and resistant to changing established business practices.
- Confusion and difficulty in understanding – Because it can be difficult to capture all of the long-term benefits of technology adoption for your business in the present moment, it can be difficult for business owners to wrap their minds around the bigger picture.
Best practices for implementing digital techonology in your SME
- Know business processes and document them
Although foundational understanding of current business habits is easy to overlook, it is necessary to understand where gaps can be improved with technology in the SME workflow. It may become evident that adjustments should be made to simplify tasks, but the bottom line is that without documentation of a starting point, it is difficult down the road to understand how technology is benefiting the business. As decisions are made with the implementation of technology, note the logic behind each decision to save time and confusion in the future.
- Organizational buy-in is essential
From the highest position to the on-the-ground employees, everyone needs to be on board with the decision. Respondents noted that having the CEO involved and backing the technology implementation from the beginning was essential to overcoming resistance further in the process.
- Identify and enlist key positions
While it is important to get everyone on board with the decision, identifying key players on your team to spearhead the project management is key. They act as the liaison between an outside consultant and the business, and ensure that the technology implementation is completed in a timely manner.
- Consult the right expertise
Assessing an organization and knowing how technology can be implemented requires specialized skills that should not be underestimated. Finding the right consultant for you is important, and personal. For the integration to be cohesive, take into consideration personality traits, geographical location, and their relationship with past clients. Don’t be afraid to ask for references!
- Keep your goals in focus
Don’t lose sight of the end goal with the technology adoption process. When complications arise, it’s easy to lose focus on the final product, but if you keep your goals written down and nearby, it can help you get through the tough times.
- Plan carefully and stick to it
Once you get a plan in place with a consultant or with an internal team, stick to the plan. Resistance to change and unforeseen obstacles are some of the many ways that timelines can decrease on the priority list. However, by abiding with best practices (in particular #2 and #5), these obstacles can be overcome and keep you on the right track towards adoption.
Alright, so now you know the importance of adopting digital technology to improve your business and maximize innovation and you have a great list of best practices to guide the process. But what’s next? We will be continuing to offer quality resources to guide you in the use of digital technologies throughout the coming weeks.
Up next in the Adopting Digital Technology series:
Low-Cost Strategies for Getting Online, a guest blog from Women's Enterprise Centre
Full citation of report:
Dimick, Sarah. Adopting Digital Technologies: The Path for SMEs. Ottawa: The Conference Board of Canada, 2014.
The report can be accessed at www.e-library.ca and requires a free registration and log-in authentication to view and download.
PHOTO CREDIT: business button close computer control hardware , created on January 20, 2009 by PublicDomainPictures. Image made available via Pixabay under Creative Commons 1.0 Universal Public Domain License. Last viewed on July 7, 2014.
PHOTO CREDIT: street start beginning intention plant stop, created on January 17, 2006 by geralt. Image made available via Pixabay under Creative Commons 1.0 Universal Public Domain License. Last viewed on July 7, 2014.