Canadian firms trail in digital advances: study
TORONTO • New research from IDC Canada finds that Canadian executives need to embrace digital transformation and risk-taking to remain globally competitive, and the rate of adoption varies widely when it comes to major tech trends.
Some sectors of the economy, notably retail, are at risk of falling behind, IDC Canada found, with 77 per cent of retailers having no strategy for innovation.
“Building Success in the Digital Economy” is based on interviews 31 representatives from Canadian enterprises with revenue of more than $500 million, supplemented by other insights from IDC Canada, a Toronto-based firm specializing in market intelligence in the technology sector.
The study was sponsored by SAP Canada.
Tony Olvet, vice-president of research at IDC, said they found in case studies that the real front-runners in digital transformation stand apart because they all have people inside the company who evangelize technological adoption, and those people need to have the sway to make things happen.
“There were individuals, not necessarily at the very top, but key players within the organization that are able to connect the dots and facilitate innovation in different business units,” Olvet said.
“They’re learning from those early implementations and also bringing those to other parts of the business, so digital front-runners are effectively building out their capabilities once they’ve done those proof-of-concepts.”
The report suggests that individual companies need to pick a strategy when it comes to how they think about digital technologies.
“Organizations will need to choose between weathering the storm, developing digital transformation competencies and becoming a disrupter, and becoming a fast follower of disrupters,” the report says.
But Olvet was more blunt, and he used the retail sector as an example, where Amazon is eating into just about every competitor. Olvet said it’s important to be aware of the international competition, but it’s at least as important to be aware of shifting customer demands
“I think the message is that you cannot be complacent,” he said.
“Even though Amazon is not a Canadian-based organization, it just shows the international flavour of digital disruption.”
Across the “Big 5” digital transformation technologies — Cloud, IoT, big data analytics, artificial intelligence and blockchain — the common denominator is data.
Across virtually every sector of the economy, businesses are finding more value and insights in their data to improve profitability, and especially when it comes to industrial applications, more and more that’s taking form of internet-connected sensors that collect data on manufacturing, infrastructure, and more.
But the IDC Canada report found that only 32 per cent of Canadian enterprises see IoT as an important for maintaining a competitive advantage.
“I would say we still have a bit of a conservative streak in us, in that we are dipping our toe in the water,” said Glenn Sawyer, director of IoT digital transformation with SAP Canada. “I don’t think we have adopted the technology as aggressively as the U.S. has, or in Europe.”
Sawyer said he worked on a project where a construction company wanted to use internet-connected sensors to figure out how to predict downtime on equipment, and do more proactive maintenance to prevent disruptions and save money.
So they set about their work, and found that in fact the company was doing oil changes too often on some of its vehicles, and in fact they could get 40 per cent more use out of a vehicle between oil changes.
“It’s not the cost of the oil change, it’s the cost of taking that asset out of commission,” he said.