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Digital transformation

One in five small businesses doesn’t have a digital transformation strategy in place. Here’s why it’s important to you, and your business, to have one

The quest to get small business owners on the path to a digital future has sometimes been something of an uphill battle, despite the obvious benefits that come with making the switch.

Traditionally, small business owners have cited a number of reasons for ‘keeping things the way they are’, including the cost of purchasing new equipment, training staff how to use it and the old chestnut: ‘But we’ve always done things this way, and it works just fine…’

However, getting an edge and maintaining an edge is crucial, as any small business owner knows, as the race to compete with local and international business is becoming harder and harder to win.

A recent study commissioned by Canon and conducted by IDC, a premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets, has revealed that despite the clear benefits, small businesses are lagging behind the times.

Stats Don’t Lie
The IDC-Canon Transformation Study 2016 revealed a number of areas where small business owners have the potential to improve their business practices, and shows that while 82 per cent of Australian businesses have started, or are well on their way through their digital transformation journey or have at least started, the remaining 18 per cent have no digital transformation strategy or are evaluating one.

That means that one in five Australian small businesses are running the very real risk of being left behind and losing market edge to competitors. Furthermore, while eight out of ten businesses that took part in the study believe they are on the path to digital transformation, when they were asked how businesses work with print and document processes, “only 14 per cent have completely digitised business processes, 57 per cent have low to moderate digital transformation in their document environments, and 28 per cent still have completely paper based document processes” the study says.

IDC Research Director Adam Dodds said the study shows the perception and the reality of where businesses are at is different.

“Whilst the study shows businesses have started down the path, the results indicate they’re not as advanced as they think they are and could use a digital reality check,” he said. “Businesses need to have a strategy for a digital world not a digital strategy. It’s critical for that strategy to start with the customer and to align the business to customer needs. That way the business evolves with the customer.”

“We predict by 2020, one third of top market share leaders will be significantly disrupted by competitors using new technologies,” Dodds continued. “They are the driving force behind digital transformation and in order to stay relevant and competitive organisations must be willing to transform, or go out of business. The rising cost of operations, new business models and changing customer buying patterns are all factors in the disruptive state of affairs right now.”

The study also shows that 59 per cent of businesses are “at the point where data from digital sources exceeds that from paper-based sources at 41 per cent”, according to the study the gap will widen over the next five years. Canon also says that digital sources will increase to 78 per cent and paper-based will decrease to 22 per cent by 2020.

The Study
The IDC-Canon Transformation Study 2016 set out to “examine which document-based processes and workflows are seen as critical to transform, re-engineer and automate in the small business sphere”, and produced some very interesting results.

According to the study, there is an “extremely strong focus on back office, administrative and operational processes for improving efficiency”, with a particular focus on financial processes such as accounts payable and receivable, which are seen to be the most critical to transform.

The study says that these processes are “viewed as ‘low hanging fruit’, because they are both document and resource intensive and readily digitally transformed”.

Additionally, when it comes to the needs of the IT Decision Makers within a company, the study says that the clear favourite in terms of outcomes is “improved decision-making”, with 89 per cent of businesses citing this.

“The key here is about improving the visibility of business information to inform decision-making processes. Efficiency dominated the other top factors being increased speed, reduced human error and reduced cost,” Mr Dodds said.

Better For Everyone
The study also looked into the effect of digital transformation on employees, which is often seen as something of a roadblock for small business owners. Changes to processes can take time to adapt to, or require specific training – which can bring with it an extra burden of cost.

However, the study found that 78 per cent of respondents said they were “interested in improving employee experience”, which was higher than wanting to improve customer experience at 55 per cent.

Canon Australia Head of Customer Marketing Nitya Padman believes the strong result on employee experience is because businesses realise they need to transform their processes and workflows if they’re going to attract and retain young talent.

“Employees are a critical part of the transformation process, if employees aren’t on board it’s very hard to change processes and practices,” Ms Padman said. “The study shows 47 per cent of businesses feel change management is a barrier to digital transformation and successful change hinges on employee experience.”

“Trends in the study also point to differences between small to medium sized businesses and larger businesses,” she continued. “Small to medium sized businesses are heavily reliant on IT to help them stay agile, counter costs and improve productivity. Their needs are immediate and they’re more readily able to transform to create more efficient workflows and improve ways of interacting with customers.

“In short, smaller businesses are punching above their weight and moving ahead in the digital race,” Ms Padman said.

But it’s not just the smaller players in the market that can benefit from making the decision to transform their business – larger companies can also get great results by changing how they operate. However, it’s the smaller businesses that possess greater agility that have an advantage in this area.

“A big motivator for larger businesses to transform is the rising cost of doing business,” Ms Padman says. “Larger organisations are heavily impacted by legacy systems. This is a major deterrent to progressing at a faster pace along the digital transformation journey.”

“What is clear is whatever size the business it’s critical to understand and be realistic about where you’re at in the digital transformation journey or risk getting left behind,” she concludes.

Are you on the right path?
The Canon IDC study asked a diverse range of businesses where they were on their digital transformation journey what it found was “what they think is not what they do”:

  • 82% of businesses said they were highly dependent on IT/had started or are well into their digital transformation journey. However in reality, the same survey reveals their immaturity in terms of their document process status.
  • 28% of businesses still worked with completely paper based processes
  • 57% of the businesses were working at various stages of paper and digital workflows
  • 14% said they had completely digitised workflows.


  • 20% of businesses under 250 seats are hard task masters putting IT to work in creating new opportunities and allowing them to enter new market spaces etc. compared to less than half that number for larger 250+ organisations
  • 20% of businesses under 250 seats use ICT to help change their business, create new workflows and customer touch points/operating models similar to expectations of their counterparts in the 250+ seat size
  • 10% of businesses under 250 seats say they expect ICT to disrupt and help them re-think/re-do/re-invent to stay relevant, a significantly higher percentage compared to the expectations of organisations 250+ seat size
  • 20% of businesses under 250 seats are content using ICT just as a business tool, similar to expectations of their larger counterparts in the 250+ seat size

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