Technological development makes it possible to collect a wide range of useful data. Thanks to artificial intelligence (AI), businesses can capitalize on a focussed and relevant analysis of this information.

The answer to tangible and complex business issues can be found in corporate data. Analytical solutions to problems are a means of optimizing both finances and productivity.

Improved productivity

The productivity of onsite resources can be increased by including algorithms in the decision-making processes. In the manufacturing sector, for example, algorithms make the advanced detection of breakdowns in the production chain possible or can be used for the automated sorting of compliant products.

These solutions rely on data provided by industrial sensors that are currently in place or by low-cost devices, such as cameras or specific sensors that can be installed after the fact. Other applications, such as predictive maintenance, make it possible to boost the efficiency of physical and financial resources used in a manufacturing environment.

Clients in the financial and professional services sectors use algorithms to automate low added-value processes. For example, character recognition can be used to automate data entry.

Algorithmic analyses of financial market results, news and annual reports make it possible for a portfolio management team to prioritize its research work. In the logistics and distribution sector, analysing changes in inventory levels and client demands helps organizations use their storage space more efficiently to reduce inventory shortages and customer dissatisfaction.

Income growth

The data produced can be used to develop solutions that assist departments making strategic and tactical decisions to generate new income. Improved knowledge about clients and their behaviour can be used, for example, to develop initiatives to get their attention and thus meet their needs.

Our AI expertise is leveraged by manufacturing entities to improve their knowledge of clients and detect business opportunities by analyzing past activities and the history of interactions with clients. Analytics are then used to pinpoint where irritants are generated in the client experience or to detect opportunities for cross-sales or supplementary services.

Additionally, thanks to transaction histories and external data cross-checking, clients can be targeted individually during their life cycle. Predictive models can then be used to increase the conversion rate for acquisitions and cross-sales, foster client engagement and reduce attrition rates.

Depending on the available data, these models will identify clients who require special attention. If you know which clients have a high risk of leaving the organizations in the coming weeks, what could be better than preparing a retention offer and acting before they make their final decision?

With this income protection initiative, supported by the analytical component, retention efforts can be invested in the most strategic areas. Similarly, predictive models for product and service cross-sales can be developed to target clients with a strong propensity to convert and thus increase revenues.

Improved client experience

AI can also be applied to improve the client experience. In recent years, the digitized client relationship has significantly changed client expectations in terms of service time, quality and accessibility. Clients want products and services more quickly, they want businesses to be attentive to their needs at all times and they want quality at a lower cost.

In the manufacturing sector, an optimized production line can then reduce production times by anticipating equipment or resource issues, reduce client wait times by anticipating demand and optimizing procurement and improve quality by automating parts of the quality assurance process and controlling input factors. Naturally, similar applications can be implemented in other industries.

AI allows a business to exploit the quantity of data it generates in order to optimize and meet specific business needs. Although it can be used in various situations, it’s important to use it, first and foremost, to support the entity’s mission and bottom line, that is, increase revenues, reduce costs and improve the client experience. Integrating it into a business strategy calls for vigilance.

Our artificial intelligence experts can help!

Did you know?

There are scientific research and experimental development investment tax credits available. The scope of these programs may have been curtailed in recent budgets, but they are still one of the most generous sources of financial assistance in the country. In some cases, combined Canada/Quebec credits can be as much as 70% of expenses.

PME Innovation and technologie - RCGT

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Online Tax Strategies, April 2018: Netflix Tax in Quebec

Effective January 1, 2019: certain non residents of Quebec in the E-commerce sector will be required to register for QST

Quebec Finance Minister Carlos J. Leitão delivered his 2018-2019 Quebec budget speech on March 27, 2018. The new measures proposed include extending the obligation to register for and collect Quebec Sales Tax (“QST”) to certain foreign suppliers in the e-commerce sector.

Currently, there are no specific rules under the QST system for online sale transactions and, accordingly, the general rules apply. As a result, non-resident suppliers who only make e-commerce sales are not required to collect QST if they do not carry on a business in Quebec.

Generally, the new measures will require these non-residents to register for and collect QST on transactions with specified Quebec designated consumers, that is, recipients who usually reside in Quebec and are QST non-registrants. The concept has commonly been called the “Netflix tax”.

The new requirement will apply to non-resident suppliers, whether or not they are located in Canada. The new measures will also apply to suppliers of digital property and service distribution platforms. The proposed measures are summarized herein.

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Louis Roy
Partner and president of Catallaxy | CPA | Digital and technology consulting

The Canadian Revenue Agency treats cryptocurrencies as commodities for Canadian tax purposes.

This poses a problem for cryptocurrencies which must be valued at each trade. Unlike standard commodities, their price is volatile with markets differing around the planet.

Under the Income Tax Act, cryptocurrencies present new challenges in reporting. In addition, due to the nature of foreign currency exchanges, there are legal quagmires surrounding the purchase of crypto assets abroad. While cryptocurrencies are generally taxed as capital gains, businesses profiting from their trade may see gains taxed as business income. Demonstrating this distinction may require expertise, particularly in the case of masternode maintenance.

Cryptocurrencies and tax strategies

You are considered to be running a business if:

  • You have a history of trades;
  • Those are rapid purchases;
  • You commit an important part of your time to the analysis of the market;
  • You do the research;
  • You finance your transactions.

We will highlight available tax strategies for you, such as incorporation.

The various requirements can be challenging to identify. For instance, taxpayers are required to file Form T1135 with CRA if they own specified foreign property that in the aggregate cost more than $100,000.

In the case of crypto assets, when these are held by third-parties in a foreign state, they may subject to that form. Failure to file results in a minimum automatic penalty of $2,500 for each annual failure to file.

Our tax experts and lawyers will help work through your obligations.

28 Mar 2018  |  Written by :

Louis Roy is a partner at Raymond Chabot Grant Thornton. He is your expert in assurance for the...

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Olivier-Don Truong
Senior Manager | Transformation 4.0 | M.Sc.A. | Management consulting

Over time, strong growth periods have always been characterized by major revolutions, particularly in the manufacturing industry.

Whether it’s called manufacturing 4.0, industry 4.0, digital transformation or smart manufacturing, the most recent industrial revolution provides Quebec businesses with a multitude of opportunities… until 5.0 makes its appearance. Industry 4.0 is not an end in and of itself, it’s an evolution to increase competitiveness and maintain added value in the marketplace.

Considered to be the fourth industrial revolution, following mechanization, mass production in the 19th century and production automation in the 20th century, industry 4.0 integrates digital technologies into the manufacturing process.

Undertaking the digital shift can provide numerous benefits to businesses, from improved process agility and data usage to cost reductions. It may even become a necessity to remain competitive and maintain business relationships with clients.

Entrepreneurs who want to undertake this shift are often hindered from doing so because of myths or concerns they’ve heard that impact how they perceive such a project. Here are some of them.

Myth no. 1: integrating 4.0 is an intimidating task

What you hear:
Many of the entrepreneurs we meet tell us they’re uncertain about undertaking the digital shift because, in their minds, it’s a colossal task. Despite its advantages, the process seems arduous because of the major changes involved, the significant investments in time and money required in the short term and because the overall transformation process is misunderstood.

What you should know:
The biggest mistake you can make in a digital shift is wanting to do it all at once, as this often leads to failure. The transformation must be carefully prepared, with each step progressively planned. Conducting an in-depth analysis of the company with an industry 4.0 audit and reviewing the objectives provide a clearer understanding of the projects to be implemented in an industry 4.0 transformation.

This analysis will also help define a project hierarchy to capitalize on the results and impact of each step and ensure greater control by spreading costs over time. This action plan will maximize the return on the investments in the medium term.

What you should do:

Our experts can assist all types of businesses (transport, services, manufacturing, etc.) in their digital transformation and they are now accredited by the Ministère de l’Économie et de l’innovation (MEI) as part of the program Audit industrie 4.0. Investissement Québec acts as the agent for this program and grants are available for businesses for all industries, including cooperatives and social economy enterprises, to enable them to begin the process and to benefit from the support of accredited experts.

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Myth no.2: Industry 4.0 only applies to technology

What you hear:
While the foundation of the fourth industrial revolution may be the connectivity of data and objects, technology is not the only consideration in such a transformation.

What you should know:
The digital shift impacts a business’s entire value chain progressively and has major repercussions on many factors:

  • Service delivery and product manufacturing processes;
  • Cross-border tax;
  • Commodity taxes;
  • Client and supplier relationship
    management;
  • Innovation and technological
    development financing;
  • Performance indicators;
  • Business financing;
  • Business processes;
  • Skill sets required;
  • Etc.

What you should do:
As with any industrial transformation, the digital transformation must be part of a strategically thought-out corporate project and rigorous deployment and monitoring process. Industry 4.0 applies to management, tax and financing as well as technology.

Myth no. 3: Industry 4.0 involves artificial intelligence

What you hear:
In recent months, industry 4.0 and artificial intelligence (AI) have been talked about in various media and may even be mistaken for each other. On a scale of maturity, AI is the highest use of data within an organization that serves to automate decisions and processes, among others.

What you should know:
It’s important to understand that you don’t necessarily need to use AI to reap the benefits of industry 4.0. There are various ways to exploit data, depending on operating maturity, that will provide significant added value. These include:

  • Descriptive analysis: observing what has happened;
  • Diagnostic analysis: understanding what has happened;
  • Predictive analysis: predicting what will happen.

What you should do:
An analysis of your data will help determine the value to be derived from applying these data to optimize your activities.

Myth no. 4: The 4.0 revolution is the answer to labour shortage

What you hear:
Some business owners undertake this process in the belief that automating certain processes will provide the same results with fewer resources and help resolve the labour shortage problem.

What you should know:
Automation will certainly change processes and procedures and may lead to some job cuts. However, it will not make jobs per se disappear—rather, it will change the nature of the work. Tomorrow’s worker will have a different profile. New positions will be created and new skills developed. Businesses will have a number of challenges to meet. The organizational structure will have to be reviewed to reflect new needs and employees trained so they can grow in their roles. Considering that people often resist change, an additional challenge will be to properly manage the shift to industry 4.0 so that key employees at the heart of the transformation are engaged and stay on.

What you should do:
Despite these challenges, industry 4.0 creates jobs with considerable added value to be performed by more competent employees. You need to take the time to assess the project’s repercussions for employees and manage the change proactively.

In short, sooner or later, you’ll need to look into the repercussions of industry 4.0 on your industry and business. How you undertake the process is up to you.

The experts at Raymond Chabot Grant Thornton can provide support for various aspects: reviewing your business processes, selecting an enterprise resource planning (ERP) system or using advanced analytics for your data, so that you can undertake the industry 4.0 shift while optimizing resource engagement and the return on invested capital.

 

19 Mar 2018  |  Written by :

Olivier-Don Truong is a management consulting expert at Raymond Chabot Grant Thornton.

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