Business Insights 2012: On-the-ground in BC Highlights from the Business Insights® Survey

Private Company Services
www.pwc.com/ca/private
Business Insights 2012:
On-the-ground in BC
Highlights from the Business Insights® Survey
of Canadian Private Companies 2012
Tahir Ayub
Canadian Private Company
Services Leader
604 806 7502
John Bunting
BC Private Company
Services Leader
604 806 7797
Leo Smyth
Fraser Valley Private Company
Services Leader
604 495 8941
The 2012 Business Insights Survey reveals that Canadian private companies are
feeling confident in their ability to navigate through the uncertainties of today’s
economy. They are focusing their attention internally on areas within their
organizations that are under their control. Over the last few years, private
companies have cut costs, improved efficiencies and now more than threequarters (77%) of privately-held companies expect their business to get better
over the next 12 months. And yes, they are aware of the external uncertainties.
Top three concerns for the coming year are the economy, competition/
discounting and labour. Still, the overwhelming majority plan to grow and four
out of five leaders report their company’s performance over the last year was
excellent relative to their competitors,
In the next 12 months, which one of the
their business plan and/or budget.
following strategies is your company
Canada’s private companies seem to
striving for?
Percentage of respondents
have taken the lessons from the past
and built on them, developing a deep
self-confidence through their resilience
Growth and expansion
81
81
and knowing they will not allow
Survival 8 1
uncertainty, change and volatility to
Consolidation 6 11
stop them from taking charge of their
National
BC
own future.
For a copy of the 2012 Business Insights report,
visit www.pwc.com/ca/businessinsights
On-the-ground observations: BC
Throughout the year, John Bunting, British Columbia Private Company
Services Leader, PwC and Leo Smyth, Fraser Valley Private Company
Services Leader, PwC work closely with private companies who are striving
to build on their previous successes while faced with a volatile global
economy and increased competitive pressure that has become the new reality
in today’s marketplace. Through their day-to-day interactions, they gather a
wealth of insights from Canadian business leaders on best practices, as well
as the issues and challenges their companies are facing.
Here, they share some of their on-the-ground observations:
The challenges of a flat economy
Leveraging technology
Forty percent of private companies
surveyed in British Columbia (BC) rated
the economy as one of the top issues that
influenced their business over the past
twelve months, which doesn’t come as a
surprise to Bunting. “The city’s economy
has been relatively flat. It’s a low-growth
economy right now,” he says. “There are
pockets of opportunity, but nothing
substantial overall.”
BC’s private companies managed to cut
costs and improve efficiencies over the last
four years, despite difficult economic times,
just as their counterparts across the country
did. Much of this was done through
technology. Now, the vast majority of
private companies in the province are
determined to take it to the next level. Of
the companies surveyed across Canada, BC
respondents were most likely to upgrade
their enterprise resource planning (ERP)
systems in the next one to three years (88%)
relative to those in Ontario (60%) and
Quebec (59%). “Companies are continuing
to look at what they can do to become more
efficient and to find ways to have greater
access to quality information—technology
and improved process can provide this,”
says Bunting.
According to Smyth: “The economy is even
flatter outside of Vancouver. For many, it’s
still pretty tough out there.”
Despite this, nearly six-in-ten participants in
BC rated their performance as excellent
relative to their business plan. “I think
companies remain optimistic. They are
growing, but at the same time they are more
realistic and have somewhat lowered their
expectations for growth,” says Smyth. “The
economy is seen as a significant risk factor.
That’s the realism. But the companies I see
are confident in their abilities to execute,
and that’s a good thing.”
Looking back, apart from demand or
issues relating to general sales, what
would you say have been the top three
issues or problems that influenced your
company over the past 12 months?
Percentage of respondents
Economy/lack of activity
33
40
Competition/discounting
33
35
Profitability/margins
24
27
National
PwC Business Insights Survey 2012
This is part of an exciting and promising
evolution over the last decade, as Smyth
has observed among the companies and
CEOs he works with. “Ten years ago, most
CEOs didn’t really have an understanding
of what was going on in IT. It was a budget
item. They might have had a Director of IT,
but didn’t really know what was going on
within the department, although they
were spending a lot of money on it. It was a
real source of stress for many leaders,” he
says. “What I’ve seen since the recession is
that the need to become more efficient has
driven the necessity for better processes
and better quality information. IT is now
recognized by more CEOs and owners as a
strategic resource.”
The power of best practices
As companies in BC continue to face the
challenges introduced by the wave of
uncertainty and the flat provincial
economy, both Bunting and Smyth see
companies arming themselves with best
practices that are fundamental to success.
“Whenever they can expose themselves to
peer-to-peer comparisons, many companies
learn quite a bit,” says Smyth. “Our clients
gain a real benefit when we expose them to
best practices. In this environment, once
you have the fundamental processes and
systems in place within your own
organization to measure against your
targets, you have to get out of your building.
You need some kind of peer network or
industry comparison.”
Mergers and acquisitions (M&As) continue
to be a strategy used by many larger
companies who are looking to overcome a
number of issues that arise during
challenging economic times, including
growth, innovation and talent. “If you’re a
mature company in a flat economy and you
want to grow, how do you do it?” says
Bunting. “You have to come up with a
better mouse trap than somebody else or
you have to go buy it. We are seeing some
companies with strong balance sheets
using acquisitions not only to fuel growth,
but as a way to acquire innovation and
attract top talent.”
Looking forward
BC companies continue to face the
challenges of a flat economy, but they are
focused on improving their internal
systems to thrive and grow. Confident in
their abilities to execute, companies are
turning to technology, taking it to the next
level and seeing where they can become
more efficient with the support of
leadership pushing it forward. The fact is,
BC’s private companies are determined to
be in charge of their own destiny.
BC
© 2012 PricewaterhouseCoopers LLP