Impact analysis of digital maturity on the financial performance of Belgian companies: Case analysis of SMEs in Wallonia

Details

Supervisors

Schuiling, Isabelle

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

The objective of this thesis was to analyze the impact of the digital maturity of Belgian companies on their financial performance. In order to analyze this impact, the research carried out in this thesis focused on the case of Walloon companies. The theoretical part of this thesis focused on two main concepts: the concept of digitalization and the concept of financial performance for companies. Through the study of the concept of digitalization, it was observed that digitalization can take place in all departments of a company through multiple digital tools and products. In order to explore the concept of financial performance, several financial KPIs used to measure the performance of a company were listed including profitability, liquidity, solvency, efficiency and valuation KPIs. The practical part was realized in partnership with the “Agence du Numérique” which gave me access to part of their database of DigiScore results developed in order to assess the digital maturity of Walloon companies. In total, 274 Walloon companies were studied in this thesis. For each company, four financial KPIs (Operating result, EBITDA, Gross profit and Net profit) were collected for a period of time (2017, 2018 and 2019) in order to calculate an average annual growth over 3 years of the financial performance. When analyzing the results, the most repeated and significant trend is a significant negative growth in financial performance for companies with a DigiScore below 20 points. The average annual growth over the last 3 years for the digital starters, taking into account the 4 financial KPIs, is up to -84,92%. The average annual growth is even up to -105,55% for the gross profit and -127,21% for the net profit. The second major trend observed is a significant positive growth in financial performance for companies with a DigiScore above 80 points. However, the sample size for this category was not large enough to be considered as representative. The other categories, even if they have a negative growth, follow quite closely the average growth of the whole sample. Same trends can be observed when performing an analysis by sector and company size. the construction and distribution sectors seem to be more strongly affected by a score below 20 points with a respective average annual growth over 3 years of -106,75% and -137,73% (taking into account the 4 financial KPIs). Similarly, companies with 20 to 49 employees and those with 100 to 199 employees also seem to be more strongly affected by a score below 20 points with a respective average annual growth over 3 years of -118,94% and -94,35%.