French ETIs and digital: where are we now? Three questions to Gilles Babinet

Let's accelerate the digital transformation of growth SMEs and TWAs! It is not size that counts ... Between large and small companies, there is a whole economic fabric: Intermediate Size Enterprises (ISEs) and Growth Small and Medium Enterprises (SMEs). These organizations create jobs, generate wealth, innovate, are rooted in the regions, open subsidiaries abroad... but they quickly suffer from the administrative, regulatory and fiscal blockages and rigidities of the French entrepreneurial ecosystem. And it is because they carry within them the resources vital to our economy that the Institut Montaigne has chosen to devote a report to them. It is also because these companies are the barometer of the difficulties of the French economy.

In this rcontribution "ETI: Intermediate size, big potential."The Montaigne Institute, in partnership with METI, has made digital technology one of the five priority areas for action to develop our entrepreneurial fabric. But where are we today?

 

Eresponses from EY and Apax Partners, which in February 2018 published their second "ETI Digital Maturity Barometer."Based on a survey of 151 French ETIs carried out by the CSA Institute in October 2017, this barometer provides an overview of the digital maturity of ETIs in France. Gilles Babinet, a contributor to the Institut Montaigne on digital issues, has agreed to decipher the main results.

 

"In 2017, the awareness is real and half of the business leaders have decided to take live the project of digital transformation of their company. The landscape of French TIEs that this study draws up is particularly striking in its heterogeneity. The leading group is mainly made up of larger TPEs and those in the mass distribution sector. All sectors taken together, however, 94% of the business leaders surveyed consider digital to be a powerful lever for value creation. » comments Eddie Misrahi, President of Apax Partners.

 

For Pierre Jouanne, Partner EY, "The results of this second edition of the barometer make us optimistic about the ability of French ETIs to take advantage of digital. Managers have become aware that the digital transformation is a global business project that goes beyond the IT department. This change of mindset should open up new horizons for French ETIs, with a positive impact on the entire economic fabric. »

 

What are the key lessons of this barometer, and what changes can be identified compared to last year?

 

Gilles Babinet The main teaching is awareness. Everything seems to show that companies now understand that digital is not a "function" that is added to the company's expertise, but rather a factor of profound transformation. Only 6 % companies attach little or no importance to digital transformation. In itself, this is a fact important enough to be highlighted. However, what is also striking is the heterogeneity of the responses. The situations are extremely varied and this is only slightly dependent on the size of the companies. Some important observations then emerge. User experience and cybersecurity are concerns for the majority of companies (respectively 56 % and 55 % of ETI managers have increased their investments in these areas, according to the barometer). This is reassuring in the sense that user experience was a concept that was simply unknown to most companies a few years ago. On the other hand, cybersecurity was only a secondary concern just a year ago. While the awareness is there, there is still a long way to go from the cut to the lips: the human and financial investments to be made are significant and are crucial to regain competitiveness.

 

How to explain the "digital backwardness" of some French ETIs compared to others, and the overall backwardness of ETIs compared to large groups?

 

GB We must be aware that France left late in this battle of digital transformation. Until recently, successive governments paid only secondary attention to these notions. Now, when 57 % of GDP is the result of public spending, one can imagine the immense ripple effect that public authorities could generate by taking a closer look at it.

So far, and due to this lack of government interest in these issues, there has been little transformation of companies. One could add to this that the fiscal pressure on TIEs, which are more taxed than large groups and less able to have investment capacity, has not helped. Finally, an incidental factor is the poor command of English by the employees of these companies.

 

What would be the solutions to bridge this gap and enable ETIs to accelerate their digital transformation?

 

GB Some essential measures seem to be envisaged, such as disseminating good practices through public procurement: for example, by moving to electronic invoicing, the administration is pushing for the modernisation of the financial services of the ETIs if they want to obtain public procurement contracts. Above all, however, a substantial effort must be made in terms of human capital: our education system is insufficiently digitally oriented and, as a result, the basic skills within companies are, according to the DESI, less well mastered in France than elsewhere. Within this framework, the reform of vocational training is obviously an imperative.

 

Interviewed by theMontaigne Institute