Updated on April 27, 2023

If implemented properly, digital and technology solutions can improve your business performance, even in the short term.

Of course, performance is a complex issue and it may be useful to review your business strategy and support your decisions with the right data, by analysing your break-even point. However, one of the lasting solutions is automation.

Automating administrative processes and repetitive tasks and better exploiting data can reduce operating costs over the long term and improve responsiveness, productivity and performance.

Step by step

SMEs, like the larger organizations, have as much to gain from this digital shift. The transformation must be gradual and well thought out from the very start in order to achieve the most significant short-and long-term improvements .

Proper planning and reflection are the key to digital initiatives. It is recommended that organizations work in phases and start by determining the most important ones for their ongoing operations and competitiveness.

The results of a digital initiative must be measurable in the short term but also be integrated into a long-term vision to ensure that the organization’s real needs and objectives are being met.

Automating repetitive tasks and optimizing processes

Automating administrative processes (or Robotic Process Automation (RPA)) and some repetitive tasks must be phased in based on your organization’s situation. Over the short-and long-term, automation will:

• Increase processing capacity and throughput;
• Avoid bottlenecks and manual errors, which, although sometimes minor, can have a domino effect with costly results;
• Free up employees for more added-value and creative tasks.

Improve the interconnectivity

A process automation platform helps improve the interconnectivity of your various applications. Integrating technology into processes increases your monitoring capabilities by giving you the ability to leverage your data.

Identify the most successful scenarios

An automated solution that incorporates machine learning can help you quickly detect processing anomalies, extract items from an invoice even in multiple document structures, and identify the most successful sales forecasting scenarios.

Manage complex workflows

With the right digital transformation, you can better coordinate between your different departments and manage information and sometimes very complex workflows.

Lower costs, improved productivity

This will increase production and decision-making speed based on accurate data. The risk of errors is greatly reduced. You lose less time during operations, resulting in lower costs and greatly improved productivity.

Optimize your financial performance

When your applications interact with each other, your operational and financial data are interconnected and provide more accurate and timely insight, allowing you to optimize your resources.

With cross-organizational data, performance can be analyzed by product, by client or even by order, allowing you to adjust your business strategy and resources to focus on areas with the greatest benefit.

Making cash management easier

The pandemic has weakened the finances of some companies, and many have become aware of the importance of their organizational structure and the technology used to maintain sufficient liquidity and optimize their management. Several platforms are available to meet these needs. An adapted management platform has many advantages. It can:

• Reduce the risk and complexity of integrating and validating your cash position;
• Provide up-to-date financial and operational information;
• Facilitate support for different payment standards;
• Promote connectivity between your organization and all of your partners;
• Shorten payment and collection cycles;
• Make it easier to generate reports and cash flow analyses;
• Help forecast and analyze cash flow more accurately;
• Test multiple scenarios for decision-making.

Something for every industry

Companies in all sectors can benefit from technology and digital transformation at their scale to meet their business objectives. Examples include:

Manufacturing

Optimize production by defining the best sequencing according to the capacity of the organization’s human and material resources.

Construction

Maximize asset and project management at each step, from project development to delivery.

Agriculture

Use drones to forecast and increase yields and reduce production costs.

Tourism

Create efficient and attractive online service platforms and immersive experiences by using artificial intelligence and the Internet of things (IoT).

We suggest that you take this questionnaire in order to properly assess your needs. You will know which aspect to focus on first and be able to measure your level of preparedness by comparing your progress with that of other organizations in your sector.

Of course, at any time, you can contact our team of experts who can assist you in your analysis and developing your action plan.

Updated on April 26, 2023

Scores of organizations are seeing their ambitions hampered by the labour shortage. For many of them, technology could save the day.

While hiring immigrant workers and rethinking business models may partially address this shortage issue, technology should also be considered as a way to successfully deal with it.

What are the benefits of a digital transformation in a labor shortage environment? Here are some of them:

• Automate tasks
• Encourage mobility and communication
• Be more attractive to talent
• Optimize ongoing training

Automate tasks and robotize administrative processes

Actually, many organizations are forced to curtail their activities due to a severe lack of available workers.

Some sectors have even experienced a significant increase in demand, but organizations are struggling to capitalize on opportunities or sustain growth.

However, automating certain tasks could free up resources to use their skills elsewhere in an enhanced role.

This can include automating certain production steps, such as a specialized packaging machine that improves order processing time, or automated robots that can transport materials or meal trays or make it easier to weed farmland.

Options also include robotic process automation (RPA), which reduces the risk of errors, saves time and increases the efficiency of your activities in addition to creating a more motivating environment for your employees.

Fostering mobility and communication

Worker habits have changed, and people want to continue to enjoy the benefits of teleworking and mobility. In order to retain and attract talent, your organization has to build flexibility into the way it operates and optimize its workers’ quality of life.

This type of flexibility and the widespread use of hybrid work model require a high-performance infrastructure and technological tools that allow managers and teams to perform their duties remotely, efficiently and securely. These tools must also make communication easier and promote teamwork.

In addition, the right tools help extend the hiring boundaries by facilitating cross-border recruitment.

Being more appealing to talent

Technology in an integral part of the daily life of the latest generation of employees. Tools that meet their requirements for mobility, security, communication and collaboration are among the strengths that will make your organization more attractive.

Employees expect flexibility to improve their quality of life, but they also want to work safely and efficiently. Your ability to hire may be impaired if your technology in not up to par and prevents your talent from taking action and implementing their initiatives.

Ongoing employee training

Digital and technological progress is not static. In order to continue to evolve and remain competitive, you may need to adapt your organization’s culture to be open to innovation and foster the continuous improvement of your practices.

This requires a business strategy that includes a change management process and access to continuous training to optimize the use of technology and properly approach the transformation and how it will impact your teams.

In general, organizations are increasingly involved in updating knowledge and transferring skills. The market is evolving at a rapid pace and it is always more profitable to mobilize existing teams rather than continuously recruit.

It is to your advantage to train employees who are already familiar with your organization to adapt their skills to the changing needs. Perfecting your digital tools can contribute to a successful outcome, especially with:

• Predictive training according to different fields of interest;
• Integrated documentation to make it easier to access procedures;
• Augmented reality to maximize technical training.

Step-by-step approach

To successfully evolve, your organization must assess its needs and move forward in stages, according to its capabilities and objectives. This requires a strategic plan. You should focus on the short-term solutions that are most profitable for you, without losing sight of your long-term objectives.

We suggest that you take this questionnaire in order to properly assess your needs. You will know which aspect to focus on first and be able to measure your level of preparedness by comparing your progress with that of other organizations in your sector.

Of course, at any time, you can contact our team of experts who can assist you in your analysis and developing your action plan.

Funds are available for your corporate projects, but given rising interest rates, is it the right time to invest?

Did you put your investment projects on hold in the first year of the pandemic? Did you postpone discussions about the sale of your business by a year? Did you have to quickly invest in technologies to adapt to the new reality? Would you like to resume your projects, but the current state of inflation is raising new concerns?

If you’re nodding your head, slightly discouraged, you’re not alone. Each organization is unique and you need to take the time to analyze your situation.

Unprecedented increase in 30 years

Inflation is rampant, with increases we haven’t seen in 30 years of 6.8% over a 12-month period (April 2021 to April 2022), especially in oil prices, which have also risen, mainly due to the armed conflict in the Ukraine.

The global stock market has had a difficult start to the year with its main indexes declining (notably -12% for the S&P 500, -8.5% for the Dow Jones and -23% for the NASDAQ), despite a slight increase since the end of May.

With many government assistance programs ending and a growing shortage of skilled labour, business leaders are being held back in their productivity and growth.

The World Bank is talking increasingly about the risk of global stagflation, and we need to be cautious in our forecasts.

Financing is available

The good news is that there’s still a lot of money in the market currently. While many companies sped up their plans in the second year of the pandemic and have already put their projects into motion, many investment funds still have plenty of cash to lend and institutions are willing to participate in the economic recovery.

As for the banks, they set aside large cash reserves at the beginning of the pandemic to deal with possible client defaults, but these reserves were, in fact, little used. This in itself is excellent news, as it means that our companies have fared better than expected. The reserved funds are now available for businesses.

The prime guideline of different government bodies is to support the economic recovery, which is being done through various programs, or by increased flexibility in credit decisions. In short, funds sources are there for entrepreneurs who wish to move forward.

Interest rates as a risk factor

However, rising interest rates (current and future) are a factor to consider in your calculations and strategy. The Bank of Canada has raised its prime rate by 0.25% (March 2022), 0.5% (April 2022) and 0.5% a second time (June 2022) to 1.5%. There is no danger at the moment, as the Bank of Canada’s pre-pandemic prime rate was 1.75%. So, we are almost back to that level. But it’s not over yet.

Since the economic crisis of 2008-2009, the average posted five-year fixed bank rates (the favourite rate of Canadians) have fluctuated around 5%. Since bank data on this topic was not available before 1970, it’s safe to say that we have not seen such a level in over 50 years.

The Bank of Canada announced quite clearly that increases were coming in the next few months in an attempt to slow down inflation. This will most likely be – opinions vary among the economists of the major banks – from 0.5% to 1.5%. The Bank of Canada recently warned that an increase of 0.75% in July was not excluded. It’s a safe bet that inflation will have to be considerably milder before it stops.

In this context, Canada’s major banks decided to raise their prime rate from 2.45% as of March 2020 to 3.2% in April 2022. By comparison, the only other time this benchmark rate has been lower was in 2009 in the midst of the economic crisis, when it was 2.25%.

Don’t panic, the rates are still what we would generally call “low”. The longer-lived among us will remember the period in the early 1980’s when rates were between 15% and 25%. Let’s just say that the rate of return calculations are not the same for an investment project in this context.

Please understand that we are very far from this level, but it’s still important to plan for your project’s financing so that the variable interest rates do not become an important risk factor.

Which rate structure should you choose for your business?

Unfortunately, the answer to this question will always be: “It depends”, especially:

• If one of the pledged assets will potentially be sold in the short term;
• If you have a significant margin in your cash flow from operations to potentially absorb a short-term rate increase;
• On your level of risk tolerance;
• On your interest in entering into new negotiations with your financial partner next year.

These factors are the same as in a low interest rate situation, as we have experienced in the last 13 years.

However, you should be aware that costs are rising, which means that the overall cost of your project increases and that your internal rate of return calculation will be affected.

If you’re a buyer, this will lower the price you are willing to pay to conclude the transaction.
On the other hand, if you are a seller, you must be aware that the market rates may have an impact on your business’s valuation and that buyers will have this in mind during their considerations.

Depending on their financial situation, buyers will also potentially see their borrowing capacity reduced and, consequently, the price they are able to offer you. Perhaps they will still want to go ahead and honour the price agreed upon, but will ask you to be more involved (e.g., by a larger balance of sale).

The right decision will always be the one that fits in with your short-, medium- and long-term goals. It’s important to assess your situation and make sure that you don’t jeopardize your operations’ sustainability.

Different choices based on project nature

Remember that you’re an entrepreneur, not a trader on the financial market. Forget about complex structures involving interest rate swaps and the like. If you don’t fully understand the ins and outs of what is being proposed, choose another solution. However, if you have the right guidance to understand this type of structure, there may be some interesting opportunities.

Furthermore, the transaction circumstances may have an impact on the rate you are offered, or choose. For example, the acquisition of a building is currently very easy to finance and you will probably opt for the lowest rate offered to you.

However, perhaps a lack of excess cash flows will lead you to opt for a loan-to-value ratio of 100% or more, which will result in a higher interest rate.

Let’s take another example, the type of project that puts the most stress on an organization’s financial structure: an acquisition. If you’re acquiring a business, it’s probably best to go with a lenient and flexible financing structure, which is likely to have a higher interest rate. If the context is right, the additional cost of the higher interest rate will probably be worth it for the reduced operational risk it provides.

Financing a project: a complex process

Financing a project requires careful consideration and analysis of your needs. To ensure that you make the best decision for your business, an expert’s support can be a valuable asset. He or she will be able to advise you on the best course of action and assist you in the search for financing and negotiating with financial partners.