Report: Canadian businesses need more IBS strategies

In a report that it released last week, the Canadian e-Business Initiative (CeBI) said that although we are on par with other countries in many respects, the percentage of Canadians unable to implement an Internet business solution (IBS) is too high.

The study, entitled Net Impact Study Canada: The International Experience, is a continuation of a report released in November 2002 entitled Net Impact Canada: The SME Experience. According to CeBI, the first study reported on how small- and medium-sized Canadian enterprises (SMEs) were using IBS to improve their business processes.

The first report found that 50.2 per cent of Canadian SMEs were using or implementing IBS and a further 20.3 per cent intended to adopt IBS over the next three years. This same report also found that 28.4 per cent of Canadian SMEs had no intention of implementing an IBS.

The second Net impact study takes the findings from the first report and compares Canadian business practices with those in the U.S. and three leading European Union (EU) countries: the United Kingdom, France and Germany.

According to CeBI, the study concentrated on firms having between 50 and 500 full-time employees. A random sample was taken from five broad industry sectors: manufacturing; financial services; retail, wholesale and distribution; communications and Internet service providers (ISPs); and public service.

Ron McClean, professor and director of academic computing and technology at the Schulich School of Business at York University and director of Net Impact Study Canada: The International Experience said that Canada ‘s IBS non-adopter rate, a key focus of both studies, is in between that of the U.S. and the EU.

“Twenty per cent of U.S. firms are refusing [to implement IBS] and 30 per cent of EU firms are refusing. We are right in the middle of the pack. If anything we are probably on par with the Europeans but we are definitely lagging to the U.S.,” McClean said.

Pierre-Paul Allard, CeBI co-chairperson and president of Cisco Systems Canada Co. in Toronto said that this 28.4 per cent of IBS non-adopters have to be shown the benefits of IBS or they are running the risk of having their organizations fail.

“If you are a lagger and if you are the third that is not implementing, you are putting your businesses at risk because you are competing with businesses that are using and leveraging these technologies,” Allard said. “It would be very much like a business trying to operate without a phone today. [IBSs] have to become part and parcel with the business and in managing the business and looking at productivity as a key element of competitiveness on a worldwide scale.”

The report revealed Canada’s IBS strengths to be top cross country Internet infrastructure, a high level of support for e-business from the public sector and a greater use of IBS from its public sector than both the U.S. and EU.

Dr. Lorna Marsden, team leader for Net Impact Study Canada: The International Experience and president of York University said that Canada’s public and financial sectors could be used as examples to under-performing areas.

“We have the foundations for a very strong e-business performance. Wide spread infrastructure, strong government support…our gaps are surmountable,” Marsden said. “We have considerable advantages we need to take advantage of, but we can’t be complacent, and that’s the real threat here. We lagged, we’ve got to realize that, we’ve got to look at how we can continue to realize gains.”

McClean said that the number one barrier preventing adoption by that 28.4 per cent is cost. “It’s simply too expensive,” he said.

Allard said that instead of focussing on the cost of IBS, CeBI want SMEs to focus on the return on investment (ROI) with these solutions.

“We focus on the benefits of implementation. Benefits in terms of increased productivity which result in reduced costs, increased revenue streams and increased market. Through the study we found that for an average company within Canada implementing and taking advantage of both cost reductions and increases in revenues…profits for those companies went up 154 per cent on an annual basis,” Allard said.

Allard added that the non-adopters are the most important focus for the CeBI because he believes that implementing IBS strategies is what is going to allow Canada to continue to compete on a global stage against companies with far larger pocket books.

“It’s about all economies understanding the benefits of implementation and transformation of their business. Changing them by leveraging the strength of the Internet and implementing Internet business solutions in an e-business fashion…changing everything that they do using the technology as a key leverage point to increase productivity and reduce their costs and increase revenues,” Allard said.

The CeBI also released Fast Forward 4.0: Growing Canada’s Digital Economy on Thursday. The highlight of this study is Canada’s e-report card, which rates Canada’s overall performance in e-business readiness, growth and acceleration and investment and image.

The e-report card highlights include: consumers online are progressing rapidly; businesses online, venture investment, SME adoption and tax and regulatory industries are progressing; privacy and security practices, e-business talent and e-business branding are in a paused mode and e-business supply is falling behind.

Nancy Hughes Anthony, co-chairperson CeBI, and president and CEO of the Canadian Chamber of Commerce said that although there is a good overall e-business environment in Canada, there is definitely continued work needed by government, business and academia in very key areas such as privacy and security issues and e-talent.

“Clearly, qualified personnel are key to enable small businesses to implement strategies to transform their business practices, and we do see that many Canadian colleges and universities produce excellent graduates in the IT field. But then we hear from SMEs who continue to report that there is a lack of skilled labour necessary for them to engage in their business,” Hughes Anthony said.

She added that branding is a key building block that needs to be strengthened in Canada, especially from the point of view of increasing investment in Canadian firms.

“We feel Canada needs to do more to brand itself, not only as the great land of natural resources and beautiful geography and scenery, but we need to be known for our technological progress and our ability to do business,” Hughes Anthony said.

CeBI is a private sector-led initiative that aims to further Canada’s e-business success by focussing on productivity, leadership and innovation. Net Impact Study Canada: The International Experience was sponsored and conducted by CeBI’s Benchmarking and Metrics team and conducted in collaboration with Industry Canada, Cisco Systems Canada, the Schulich School of Business at York University, Momentum Research Group and IDC Canada.

All CeBI reports can be found online at