A relative lack of competition compared to other geos is cited as a key reason why Canada is a laggard in the embrace of digital transformation.
Dell Technologies has released a new study of corporate attitudes towards digital transformation. While there were bright sports globally, the overall results were far from cheery. For Canadian companies, however, the results were even worse, as Canada finished near the bottom of the 16 countries studied.
The research was actually commissioned by EMC before the acquisition by Dell closed, and was conducted by Vanson Bourne, an independent research company. Four thousand business leaders were interviewed across 16 countries, from mid-size to large enterprises, drawn from 12 industries. The interviews were conducted online.
The global numbers indicated that businesses realize the disruptive nature of digital transformation. 78 per cent of businesses believe digital start-ups will pose a threat to their organization, and nearly half – 48 per cent – said they don’t know what their industry will look like in three years as a result. 73 per cent of companies agree that a centralized technology strategy needs to be a priority to advance digital transformation, and 66 say they plan to invest in IT infrastructure and digital skills leadership. 72 per cent say they are expanding the size of their software development capabilities and plan to invest in Converged Infrastructure, as well as things like Flash, Data Lakes and Internet of Things technologies over the next few years.
On the other hand, just five per cent of businesses globally can be classed as ‘Digital Leaders,’ according to the study. 73 per cent admit that digital transformation could be more widespread. Moreover, only 23 per cent of IT budgets will be tied to digital transformation efforts over the next three years.
“These numbers show it really is about all about the velocity by which technology is changing, and how fast you have to transform your business in order to remain relevant,” said Carolyn Rollins, Director US & Canada Commercial Regional Marketing, Dell Canada.
“There has always been a complacency about the digital transformation investment, but companies do realize they need more data and analytics to assess what is happening,” Rollins noted. “Businesses really need to look at transformation because in the global economy, they have to compete on a much broader range, with new competitors popping up all the time. The fact that 48 per cent say they don’t know what their industry will look like in three years, and that 78 per cent consider digital startups a threat, show this. The smallest companies assessed here are mid-market, so for companies of that size showing concern about digital startups shows the velocity.”
The Canadian data, on the other hand, indicates a lag compared to the global numbers. Canada came in thirteenth of the sixteen countries studied – near the bottom. 35 per cent of Canadians said they have experienced significant industry disruption over the last three years. The global number, in comparison, is 52 per cent. Similarly, 48 per cent of Canadian businesses have witnessed new competitors in their markets, compared to 62 per cent globally.
“We don’t experience the same kind of competition in Canada,” Rollins said. “There’s less of an incentive for businesses to up their game because they don’t feel the same competitive pressure. In addition, the devaluation of the Canadian dollar has caused more of a focus on the core issue of trying to survive.”
The same gap exists with respect to more specific metrics. 72 per cent of Canadian companies admit to not acting on real time data, while the global number is 64 per cent. In Canada, 21 per cent of companies say they innovate in an agile well, meaning the ability to develop applications in days rather than weeks. That compares with 28 per cent globally.
Rollins admitted at first she was surprised at Canada’s underperformance in these data.
“My first reaction was that can’t be possible,” she said. “We’ve been fairly early adopters on most things, but these numbers indicate who we really are. I went from shocked, to understanding why we are where we are. This is definitely an opportunity to step up our game from a global perspective.”
Rollins acknowledged that IT companies like Dell need to do more here.
“We need to really work with Canadian companies to help them,” she said. “The message we want to get out with acquisition of EMC is that Dell Technologies is now an organization that can help them take companies fully through all aspects of their digital transformation. There’s smart ways to do this. They don’t have to replace everything they have.”