Bank Otkritie: Business Digitalization Index of Small and Medium Enterprises

5 Key Index Parameters
45 p.p. of 100 possible was the level of the BDI Index in September 2019

Objective of project

 
  • Assess the readiness of SMEs in Moscow and Russian regions for a digital business model
  • Calculate the Business Digitalization Index by using 5 key assessment parameters
  • Identify benefits and barriers of digital business transformation for entrepreneurs

Partners

 

Bank Otkritie is one of the top 10 largest banks in Russia and is a systemically important financial institution. It has been operating in the financial market since 1993 in the following business areas: corporate, investment, retail, small and medium business, and also Private banking. Otkritie today is a financial group that has great potential for further business growth. The group includes leading companies in key segments of the financial market: insurance company Rosgosstrakh (insurance), NPF Lukoil-Garant (pension industry), Otkritie Broker (brokerage services).

Research methods

A representative nationwide survey of small and medium-sized business (including individual entrepreneurs) was conducted by NAFI in September 2019. 580 executives of enterprises were interviewed in 8 federal districts of Russia.

Overview

 

Business Digitalization Index 

It was calculated to assess the level of readiness of business for digital economy. The Business Digitization Index (BDI) integrates five private indexes:

Data transmission and storage channels: this indicator shows whether the company uses various digital information transmission and storage channels (cloud technology, corporate mail, instant messengers, automation systems, etc.)

Integration of digital technologies: the parameter measures the level of implementation of technologies into work (artificial intelligence, Internet of things, 3D printing, use of online documents, etc.)

Use of the Internet for sales: the indicator reflects various activities that enterprises do by using Internet channels (a site page, a page on social networks, promotion channels, etc.)

Information security: the parameter measures the readiness of entrepreneurs to resist potential digital threats in process of doing business

Digital training: the indicator shows the level of readiness of the company’s leadership to train personnel in the field of digital technologies, as well as experience of such courses and trainings

The Small and Medium Business Digitalization Index (BDI) was 45 percentage points out of 100 possible in September 2019. This indicator shows that small and medium-sized business in Russia is not sufficiently aware of advantages of implementing digital technologies, as well as possibilities of work processes improving by using digitalization. The BDI Index is different for different companies: it was 42 points for IP and 49 points for legal entities.


Data and storage channels

As a channel for transmitting and storing information entrepreneurs most frequently use corporate mail (48% of respondents). Systems for automating are also quite in demand (43%).

Digital Integration

The vast majority of companies (92%) use the Internet to do business. The most popular digital technologies for doing business are mobile applications (50%) and  technologies that connected with the Internet of things (26%).
About half of companies share documents (for example, Google Docs): 6% use only them, 40% combine the use of online and offline documents.

Three quarters of companies (73%) use electronic document management, only 12% completely switched to it.

Using the Internet in sales

Most companies have their own sites (54%). Ads on online maps (Yandex.Maps, 2GIS, Google Maps) is a fairly common practice: 87% of companies are represented on them. Pages on social networks have 43% of Russian companies. VK.com is the most popular in the regions (80%, on average in Russia - 74%), for Moscow it is Instagram (79%, on average in Russia - 57%) and Facebook (66%, on average in Russia - 34%) . 79% of companies use messengers to work with clients.

The most frequently used promotion channels are Internet advertising (46%) and offline channels (37%).


Company Information Security

One third of companies have an approved information security policy (34%). Among legal entities, this indicator is higher and reaches 41%. 45% of companies respect privacy policy.

A quarter of all companies (23%) do not use information security tools (anti-virus software, firewalls, network attack monitoring centers) in their work. Antivirus programs are the most popular way to ensure information security.


Digital learning

28% of companies organized training of use of digital technologies for employees. More than a third of all company representatives (39%) do not have a need to train employees to use new tools and specialized programs for business, every fourth representative (24%) believes that all employees need digital technology courses.

The share of companies that have specialists working with digital technologies is small (12%).  Internet marketers work in 9% of companies,  web analytics in 8% and web developers in 7%.

Remote work is quite popular among SME representatives: all employees work remotely in 4% of companies, and some employees work remotely in 40% of organizations.

Key Benefits and Barriers to Digitalization

The main barriers to digitalization, according to entrepreneurs, are the disinterest of company leaders in switching to the digital format (21%) and budget restrictions for implementation of digital technologies (20%). At the same time, entrepreneurs see the advantages of digitalization, such as convenience of process control (34%) and an increase in speed of work (33%).

Data presentation

The results of the study were presented at All-Russian Forum of Entrepreneurs XV Congress of Leaders" OPORA RUSSIA in Yekaterinburg on October 17, 2019. 

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