Canadian SMEs Use of Technology

Business technology is simple and relatively inexpensive, yet Canadian companies refuse to get on with it. There are many examples of smart Canadian SMEs using technology in innovative ways—see the sidebar for a few inspiring stories—but here’s the problem: there aren’t enough of these great stories. Studies continue to indicate that Canadian SMEs, on the whole, are not adopting ICTs as quickly or effectively as they should. As Backbone reported last year, Canadian industry groups, vendors and government bodies have been working to address this trend for a number of years, trying to boost SME investment in the digital economy.

“One of the biggest barriers preventing SME investment in technology is knowledge,” said Bernard Courtois, past president and CEO of the Information Technology Association of Canada (ITAC). Most small business owners are busy running their companies and unless they happen to have a go-getter on staff who knows how to install and implement new technology, the tendency, it seems, is to avoid ICTs altogether.

As a result, the federal government and groups like ITAC have been working to educate SMEs. “The solution will need to be a bottom-up one where we work directly with individual SMEs to get them to understand what they can do with technology,” Courtois said.

One government-funded program in development involves partnering with colleges and industry associations to help bridge the knowledge gap by offering specific solutions and information pertaining to particular industries. “A small business owner will likely listen if you say, ‘A business like yours is already doing this, here’s how,’” Courtois said.

The rise in cloud computing is also expected to make ICT adoption more appealing to small businesses over the next few years. With less of an upfront investment, cloud-based programs will be more affordable and less daunting. “This won’t show up in the numbers for some time, but we will start to notice this behavioural change,” Courtois said.

With solutions from e-commerce to automated supply chain and inventory management to data and information gathering to sustainability and energy savings, technology is increasing productivity across a variety of sectors.

Not even online yet

According to a recent Angus Reid study commissioned by Google Canada, more than one-third of Canadian small businesses have no online presence whatsoever. “Eighty per cent of the Canadian population is online and using search to find businesses and services; if a company isn’t there, then that’s an opportunity lost,” said Andrew Swartz, a spokesperson at Google Canada.

Small businesses are slow to establish an online presence, Swartz said, because of the perception that it takes too much time and is too expensive. In attempting to address these barriers, Google recently launched Get Your Business Online, a tool that helps users register a .ca domain name and build a simple Web site for free. “Obviously having more businesses online is a good thing for Google, but we see this as an opportunity to drive the Canadian economy as well.” Unlike in the U.S., where businesses were quicker to adopt the Web than most consumers, Canada has seen the reverse trend. “Canadians are online in overwhelming numbers, but the online ecosystem remains untapped by Canadian businesses,” Swartz said.

Businesses that are leveraging the power of the Web are seeing results—and many are surprised by how simple it is to get a site up and running. “We’ve been operating our bed and breakfast for 18 years and back then the Internet wasn’t even part of the equation,” said Jessie Pflug, co-owner of Stouffer Mill Bed & Breakfast in Ontario’s Haliburton Highlands. When BBCanada.com, the first Canadian B&B Web site, launched in 1995, the Pflugs were the 315th business to subscribe (the site now has more than 12,000 subscribers). The Pflugs leveraged this online directory to draw attention to their three-bedroom property and created their own site. Recently, they had their Web site redesigned using the WordPress platform, which allows them to control and update their own content.

“Before we had a Web site it was hard to attract European guests,” said Don Pflug. “Now we get an e-mail from Germany, they book three nights for a few months down the road and we don’t talk to them until they arrive.” Thanks to their dynamic Web presence and use of Facebook, the Pflugs have had guests from Israel, Russia, China, Thailand and Korea—all of whom found the B&B online.

Beyond the Web

Bricks-and-mortar businesses are using technology to integrate point-of-sale (POS) systems with inventory and online stores to save time and ensure accuracy. An example of this can be seen in Cookworks, a Vancouver retailer of kitchen and cooking appliances with two physical locations and a robust online store. The company uses the services of Vancouver based Jammicron, a Web design and e-commerce provider, to leverage hosted solutions. “Jammicron automatically uploads data directly from our POS system to our Web site, so if something is on sale in the store it shows up the same way online,” said Cookworks owner and president Dave Werner. The POS system also allows Werner to gather data about his customers and their preferences; other software then transforms this into valuable information and analytics about his customers.

“Even small coffee shops can benefit from transforming the data they naturally gather throughout the day into information,” said Elaine Mah, business marketing manager with Intel Canada. Using basic Excel spreadsheets, business owners can generate actionable information such as customer traffic patterns and best-selling products. “This is much more effective than basing decisions on your gut feeling alone, and allows small businesses to get value out of the technology they already have in place.”

New opportunities

Technology is not only benefitting those already in business, but also opening doors to new business opportunities. Executive coaches are using Skype and YouTube to advise clients across the globe and offer video seminars; creative entrepreneurs are growing extensive networks (i.e. new moms, cooking aficionados, cat lovers, etc.) and generating content and selling ads targeted at their specific needs; bloggers are earning revenue though Google AdSense while writing about their interests and passions; and online stores are being generated to sell handmade crafts, clothing and accessories. Individuals with limited tech knowledge are leveraging the opportunities available through the Web to create profitable ventures.

As more SMEs in Canada begin to realize increased productivity as a result of adopting ICTs, there is a hope that others will notice the trend and begin to follow suit.

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Many small Canadian businesses do use technology aggressively

For example, White Meadows Farms, a fourth-generation family farm in St. Catherine’s, Ont., uses its online store to sell maple syrup across the globe, including to Europe, Australia and Japan. Nearly half of the site’s traffic is generated through Google AdWords.

And there’s Philip & Henry Productions, one of the largest networks of performing magicians in North America. Philip Murad uses the Web to market his services, book and manage performances, and train magicians using videos, all from his small office in Vaughan, Ont. About 70 per cent of his business is generated via the Internet, and he tracks every aspect of his Internet marketing efforts using Google Analytics and similar tools.

Or consider Pemco, founded in 1946, a steel distribution and fabrication business with a head office in Hamilton, Ont., and locations throughout the province. This medium-sized business was an early adopter of information technology, converting to an enterprise resource planning (ERP) system in 1986. Today the company uses its ERP to manage and track inventory and accounts receivable, and enter and process sales and purchase orders, all in an integrated fashion. It also uses advanced information management systems to develop detailed reports, and a GPS-enabled logistics program to oversee its trucks.


How to maximize your site's potential

Judy Ranieri, president of MiBec, a boutique Web design firm specializing in affordable Web sites for entrepreneurs and small businesses, suggests the following best practices when designing your business’ online presence.

> get online: your customers are expecting to find you there

> keep your site simple: incorporate white space and ensure the site is easy to navigate

> have a specific call to action on your homepage: let visitors know what to do when they get there (i.e. contact you, buy your products, read your portfolio)

> keep content fresh and updated: static sites are a thing of the past; consider a platform like WordPress that allows you to update content easily

> drive traffic to your site: use social media (i.e. Twitter, Facebook) to link to your site, comment on blog posts, write your own blog and include your URL in your e-mail signature

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Photo: Yves Lacombe