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In 2022, what is there to say about digital transformation in our businesses?
A picture of Quebec and Ontario companies
Last December, in partnership with Léger, we surveyed 700 employees and managers at companies in Quebec and Ontario to paint a comparative portrait of the trend in companies’ digital transformation projects and of how these projects are received and interpreted within their own company.
In 2021, the pandemic seemed to be accelerating digital transformation for businesses; but in 2022, we are finding that this may have amounted to a simple technology upgrade to enable people to work together remotely.
This second survey is an opportunity to validate some of our findings from the previous one with the same population – and find out whether employees take the same reading of their company’s issues as their managers do. We did find some gaps in perception. However, both agreed that their company does not have the full capacity that digital can provide for communications and marketing, operations, sales and production.
The issues on our companies’ minds
The companies identified several issues that are barriers to digital transformation. The labour shortage is the key barrier to digital transformation. Statistics Canada reported in its December 2021 Labour Force Survey that unemployment was at its lowest point since the start of the pandemic (5.8%). This lack of a qualified workforce is affecting their plans, and is one of the main challenges they’re trying to overcome with a transformation project.
Cybersecurity is not far behind – no surprise given that 43% of large companies with 250 or more employees (the same population as our survey) were hit by a cyberattack in 2020, according to Statistics Canada. And 72% of survey respondents say that their company has, or plans to, develop a cybersecurity strategy.
The connection is still seldom made between digital transformation and today’s core issues of sustainable development and climate change. Just 20% of employees thought the challenge could be met through their digital transformation. In addition, the majority of companies – 64% – give little or no airtime to climate issues and digital sobriety.
How is it different from the 2021 survey?
With this comparative study, we identified various convergences and divergences between the 2021 and 2022 editions of our survey in partnership with Léger. This second survey’s unique angle is based on the comparison of employees’ and managers’ perceptions.
- Portrait of the digital transformation within the companies
Whether or not companies have an investment plan and a digital transformation strategy are two pieces of data that we used to paint a picture of in-house digital transformation. In 2021, 76% of companies said they had an investment plan, and 68% said they had a plan in place for their transformation. In 2022, we see that 46% of companies have an investment plan and 60% have a transformation plan. These two indicators are down by 27% and 8%, respectively.
- Optimizing digital technology and how it is applied
To draw this picture more precisely, we asked managers if they thought their company was capitalizing as much as it could on digital capacity in four sectors: operations, production, communications and sales.
We are seeing a higher use rate for these four sectors compared to the 2021 survey, but nowhere has it reached a majority. Production and operations are the sectors showing the most room for improvement.
- Progress in the digital transformation
Data collected in the 2021 survey gave us the impression that Covid-19 had acted as an accelerator in the digital transformation projects of Quebec and Ontario companies. Conversely, the same question was asked again this year, and the numbers speak for themselves.
- In 2021, 46% of companies believed they were ahead of the competition in their digital transformation after Covid-19.
- In 2022, only 30% believe they are ahead of the competition in their digital transformation after Covid-19.
That’s a difference of 16 fewer percentage points. Many companies (44%) don’t think they are either ahead or behind since the pandemic.
Employees and managers: perceptions aligned or askew?
- What is a digital transformation?
We think the digital transformation concept is frequently misunderstood. With this survey, we measured managers’ and employees’ understanding to see what they associated it with.
Generally, for many people, digital transformation means setting up a technological solution. For a majority of employees surveyed, “digital transformation” refers to technology infrastructures (45%), automation (41%), or digital applications (also 41%), but is never viewed as a whole.
While the technology aspect is a major component of digital transformation, the transformation path goes beyond that. It is an agile and cross-cutting path that offers a dynamic dimension to transformations.
- Are technical skills and lack of motivation barriers to digital transformation projects?
Managers have identified lack of technical skills and lack of motivation as the key barriers to their digital transformation projects. Yet employees do show interest in being involved in developing requirements, as they are motivated to receive training and guidance for their company’s transformation.
And 56% say they are motivated when they have to use new technology. This number is even higher for those aged 18-34: 83% say they are motivated to use new technology.
Still, employees acknowledge that lack of skills is a barrier to the transformation project (70%). They also stress the lack of managerial skills (57%) and the lack of financial resources (58%).
Why tackle a digital transformation?
Because digital transformation lets you grow while maintaining your competitive edge. Not transforming can cost you market opportunities and put you at risk. Digital transformation is an opportunity to update your operations and processes, acting as a lever against various outside forces.
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