COVID-19, complexity and competition driving upswing in SME digitalisation
The experience of COVID-19, the ease of doing business, and the risk of falling behind others in their industry has driven an increased uptake of digital tools by New Zealand SMEs, according to the latest research by business management platform, MYOB.
The latest MYOB Technology Snapshot also revealed that three-in-five SMEs are conducting more than 50% of their business using digital tools, technology and software, while just 18% have less than a quarter of their business digitised. The key operational areas being digitised include accounting and finances (66%), staff communication (52%), and administration and customer services (45%).
MYOB SME senior sales manager Krissy Sadler-Bridge, says it is promising to see local SMEs recognise the positive impact digital adoption can have on their business operations and that many are moving rapidly to take advantage of the latest digital solutions.
"Across a broad spectrum of business from productivity and efficiency, to improved communication with customers and employees, to getting paid more quickly we know first-hand that digitisation can have a profound and positive impact on New Zealand's SMEs," she says.
"In fact, if the past 12 months has showed us anything, its that technology plays a critical role in the survival and success of business.
While the impact of COVID-19 on business has been the primary driver of this increased uplift of digital solutions, what's both interesting and encouraging is that we are seeing more SMEs are moving to digitise operations after recognising benefits like the ability to reduce business complexity (41%) or having had the experience of falling behind industry peers who had digitised (26%). Competition is also a massive catalyst for change and these insights prove just how strong-a push this can be.
While a significant proportion of SMEs have embraced digital technology 21% even plan to digitise all of their business and 18% plan to digitise around half of their business just over a quarter (26%) do not currently plan to change or improve the digitalisation of their business.
According to the findings, cost (41%) remains the biggest barrier to businesses adopting new technology, followed by the time to implement (23%), the need for staff training (22%) and a lack of knowledge (21%).
However, more than a third (38%) of those who didnt plan to improve the digitalisation of their business would be incentivised to do so by the availability of free support and training, and a similar proportion (37%) of this group said the same of Government subsidies or rebates covering a portion of the cost of new digital solutions.
"While a number of SMEs don't currently plan to increase digitisation in their business, the findings reiterate the importance and value of programmes like the Governments Digital Boost initiative," says Sadler-Bridge.
"We have seen that in addition to cost, growing our SMEs knowledge and in turn, confidence, around the use of and opportunities provided by digital solutions, is key to helping them see past the barriers and move forward with implementing new technology, she says.
"We will undoubtedly continue to see a strong call for Government tax incentives to drive more digital adoption, however, easily accessible support and training programmes like that which is available as part of Digital Boost are a valuable tool for SMEs keen to explore digitalisation opportunities.
Business owners are often tight on time and resource, Sadler-Bridge says while it is encouraging to see 47% offering digital training to their teams in some capacity, platforms that offer information and education around the use of digital tools, and in an environment where they can learn at their own pace, are a great incentive for more SMEs to take hold of the digitalisation opportunities in front of them.
Frances Valintine, chief executive of The Mind Lab, adds, "MBIEs commitment to creating the DigitalBoost.co.nz free learning platform is a true game-changer for small businesses who are trying to grow their customer base, lower their marketing costs and create more automated systems.
"Digitalisation is often put into the too hard camp, whereas the reality is if business owners take a step-by-step approach to learning how to implement digital tools, they will quickly find the benefits are significant and the learning curve is not as difficult as it is often perceived to be."
MYOB's findings revealed that almost a quarter (24%) of SMEs have an internal team dedicated to running regular digital training sessions for employees, while almost the same number (23%) use external providers to help upskill their teams.
"Businesses have been through a lot over this last year, and COVID-19 has brought a lot of evolving technology trends such as remote working, online sales and digital staff and customer communication to the fore," says Sadler-Bridge.
"While many of the changes made by our local SMEs have been borne out of necessity, whats extremely positive is that were seeing an increased appetite to digitise and the follow-through on this will certainly result in more New Zealand small businesses becoming more efficient, more productive and more resilient setting them up to boost economic output and enabling strong, competitive performance in the future."