While many people have easily adapted and incorporated technology in their everyday lives, Australia’s small to medium enterprises (SME) sector is still testing the waters when it comes to digital technologies, says mid-tier accounting and business advisory firm, Bentleys.
According to the latest results of The Voice of Australian Business survey, a bi-annual national survey of SMEs across all industries and regions, businesses were evenly divided with respect to seeing digital disruption as a threat or opportunity – 25 per cent saw it as an opportunity and 29 per cent as a threat.
Michael Ruggiero, managing partner of Bentleys SA, said the split between those who see it as a threat compared to an opportunity could point to a lack of understanding around how to embrace these technologies in a practical way, which is causing a reluctance to engage.
“We are seeing that SMEs that are proactively embracing digital technologies, particularly in the manufacturing and agribusiness sectors, are reaping the opportunities in how it can effectively improve or even change their business model and operations completely. However, according to our research, that is only a quarter of businesses. Given the rate of development of digital technologies, it’s somewhat surprising this figure isn’t higher.
“The ones who are seeing it as threat are worried it will disrupt their traditional way of approaching their business – essentially upsetting the applecart. However, when integrated properly digital technologies should create efficiencies that not only improve the bottom line but free up time for business owners to spend on more important activities such as deepening customer relationships and gathering data that creates more meaningful client interactions or better products and services,” said Mr Ruggiero.
As the new financial year begins, Mr Ruggiero believes SME owners should review their current situation and consider how digital technologies can provide improvement. For those looking to refresh and refine current practices, and who might be a little hesitant, he recommends:
- Seeking advice from a professional: Only 26 per cent of SME owners are currently using external consultants to make business decisions, but in reality, accountants and external advisors are an extremely valuable source of information when it comes to new technologies and how to practically implement them. Engaging with them and asking for help can offer peace of mind.
- Tap into your professional network: find out first hand from other SME owners the types of technologies they are using and what they like or don’t like, what challenges they encountered when implementing and how they overcame them. Peer-to-peer learning can be one of the best sources of information.
- Do your due diligence: every business is different and has different needs. Think about the areas of your business operations where you spend most of your time and how digital technologies may be able to help you. There are several options available so make sure you land on the best option for your business. Take time to undertake proper research – there is an abundance of useful information available online – specifically look at reviews and if possible ask the technology providers for a run-through of the product or at the very least an outline of its features. Don’t forget to consider the costs in buying and setting up new technologies to ensure it’s a viable option that fits within your budget.
“Modernising your current business operations and processes by integrating digital technologies will help SMEs gain an advantage when it comes to speed, cost and the ease of doing business. But ultimately, it’s about ensuring your business is operating as effectively and efficiently as possible, keeping it competitive, while also positioning it for future growth. Embracing digital disruption isn’t about up hauling your entire business model or operations. Rather it’s about using technologies in a smart way to complement and boost your current practices.”
Other key findings about SMEs and digital disruption from the survey include:
- Small businesses were most positive about digital disruption, with 18 per cent seeing it as a significant opportunity, compared to only eight per cent of medium businesses and six per cent of micro businesses.
- 16 per cent of medium businesses foresee greater difficulty in adapting to technological change due to the larger size of the systems that would need to change, followed by six per cent of small businesses and 10 per cent of micro businesses.
- More than half of the businesses surveyed (60 per cent) said they use technology to cut time spent on administration, followed by marketing (53 per cent,) remote access (50 per cent) and improving cash flow (43 per cent).
- The survey also revealed medium businesses were more enthusiastic about potential benefits in automated invoicing (56 per cent,) recruitment (55 per cent,) and reducing staff costs (49 per cent).
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