Owners of SMEs in Quebec often question whether digitization will lead to business results, arguing that growth is achieved by increasing sales.
They are absolutely right. New digital tools need to empower sales and operations teams and facilitate collaboration. And management teams need to see a clear return on investment, as well as benefits that address the labor shortage in a concrete manner.
The results of the recent Quebec Industrial Barometer survey conducted by the STIQ raise a major dilemma: Yes, digitization does pay off, but it can be difficult and costly to achieve.
The study’s finding show that the more SME integrate digital technologies, the better their business results. Nevertheless, the findings also identify some major barriers to digitization:
We dove deeper into the results of the 13th Edition of the Barometer, which collected responses from some 500 SMEs across Quebec. Here are our three main takeaways regarding the digitization of SMEs.
The labor shortage will continue to curb the growth of SMEs over the next few years.
Rising wages are putting further pressure on companies already facing rising input costs. More than ever, sales teams will need to be efficient and have access to powerful digital tools.
The Barometer survey measured 10 different digital technologies being integrating by manufacturing SMEs. The results show that the degree of integration varies greatly from one technology to another.
The survey also found that few SMEs have integrated two key technologies for modern and efficient B2B sales management, namely PRM and CPQ software.
According to the STIQ survey, only 10% of SMEs use product configurator software.
Product configuration software – also called Configure, Price, Quote (CPQ) software – lets you accurately configure interactive bids autonomously, in just minutes.
There are often a multitude of variables that can suddenly change in the sales process. That means creating and approving bids can become a bottleneck to closing sales.
Understandably, companies don’t want to change their processes if it will result in pricing errors, unapproved discounts, or promises to customers of product configurations that aren’t feasible in production.
Interactive quotes can make selling easier by allowing sales reps and channel partners to quickly and easily put together highly professional and visual customized quotes that showcase the brand and its products. They also allow for real-time tracking and electronic signatures.
When a CPQ is properly deployed and used, the results can be impressive:
According to the STIQ survey, only 22% of SMEs use customer or supplier management software.
Partner Relationship Management (PRM) software lets partners access your data (products, pricing, etc.) in real time. That means faster approvals, faster closing and by extension, more sales.
SMEs that sell through a B2B network of resellers, distributors, or dealers have a significant information management challenge on their hands. The channel partner network has to master the product offer and be able to access real-time pricing data. Giving resellers access to a digital tool that lets them sell configurable products autonomously can be a game-changer.
PRM software also gives SME managers a tool for measuring the performance of the channel network in real time. This makes it easier for them to control the representation of their product offering. They can even share reports and dashboards with partners to help them track performance indicators or better seize on upselling or cross-selling opportunities.
PRM software is a modern day tool for managing a channel ecosystem in a consistent, predictable and productive manner. It’s a powerful tool for any SME looking to expand its marketing strategies outside of Quebec.
According to the results of the STIQ Barometer, the largest SMEs (100 to 500 employees) proportionally invest more in digital technologies than the smallest (10 to 19 employees). This gap between the smallest and largest companies has not narrowed since 2019.
The reason? It appears that the digital solutions being offered to SMEs are often too complex, too expensive, and too time consuming to implement. Smaller SMEs cannot afford to slow down their growth or tie up scarce resources in a protracted digital transformation project. They simply don’t have the bandwidth or flexibility.
“The software better come with an arm’s length of benefits, because it’s a costly initiative. We’re talking the same price range, whether it’s for a small company or a large one. Making Industry 4.0 profitable is a lot harder for me than it is for a large company.”
– Serge Fraser, Optimoule (STIQ, 2019)
The sheer magnitude and duration of a technology implementation can be overwhelming for many management teams, which often don’t know where to start or how to proceed. The moral of the story is that technological tools that come without support usually remain on the shelf.
Management teams also worry that consultants will propose solutions that don’t fully meet the company’s specific needs. In sales, the solution has to be adopted by a diverse group of stakeholders. You can’t just impose a “new software” and expect everyone to learn to use it productively.
Another crippling fear of management teams? The company will end up with a “white elephant”: a large-scale, high-profile initiative that brings more costs than benefits, and that becomes a nightmare to operate or maintain.
The STIQ report shows that SMEs are hungry for new technologies that can help them grow.
42% of the companies surveyed have implemented new technological tools for business development.
The report also makes the benefits of investing in digital transformation clear to see. Firms that have integrated or that plan to integrate multiple digital technologies (six or more) outperform those that have integrated or that plan to integrate none or only one (see graph 28).
Firms that integrate multiple technology tools report:
That being said, 48% of SMEs say the difficulty of evaluating ROI is a barrier to digitization.
Companies are skeptical about the profitability of digitization.
“Companies question the profitability of investing in digitization. We’re investing in tools without any idea what the return will be.”
– Julie Bouffard, Groupe PMI
While revenue growth is important, profitable revenue growth is even more so. SMEs that invest in technology to drive sales growth and optimize operations can generate a return if the technology directly leads to:
Accelerating the growth of an SME requires simplification – particularly when it comes to B2B sales management. The chosen technology tool has to facilitate the relationship between sales and operations, and between the company and its channel network.
At Centralio, we make sure your digitization directly supports your growth, efficiency, suer experience, and automation objectives.
Bottom line: If you want to make sure employees use new digital tools, these tools have to make processes more efficient and they have to open the door to accelerated growth. Because that’s the ultimate goal.
Digital tools must allow sales to grow profitably without creating more costly problems internally.
The results of the STIQ Barometer confirm that Quebec SMEs are eager to embrace digital technology. The ball is now in the court of technology partners, who have to be able to clearly show SMEs that they can reduce risk of digitization by simplifying the implementation of digital solutions and by linking them to concrete business results.
Centralio is the B2B sales platform for manufacturing companies looking to accelerate growth. It gives small and medium-sized businesses the powerful but user-friendly cloud-based tools they need to improve online configuration, pricing and quoting (CPQ) as well as sales force and partner relationship management (PRM) – all from a centralized location.