Australian and New Zealand small and medium-sized businesses are benefiting from the rapid digital change, according to a recent survey, which found that digital solutions generated new opportunities for businesses and helped them in accelerating growth.
According to a poll conducted by management software solution SAP Concur, businesses that adopted digital solutions gained a significant competitive advantage over the past two years.
When compared to other businesses, these companies showed:
- A 17.8% increase in productivity (compared to 1.3%)
- Profitability increased by 20.6% (compared to 0.3%)
- The cash-to-cash cycle is 17% faster (relative to the previous year)
Consumer behaviour shifted when the pandemic shut down the country, and e-commerce became the default option for businesses of all sizes to interact with customers.
Fabian Calle, managing director of small and medium business, SAP Concur Australia and New Zealand, said: “The digital economy will deliver many cost and efficiency gains for SMBs as they enter the new financial year.
“For example, automating financial processes using digital tools opens up new opportunities for real-time customer insights while streamlining business operations.
“Also, businesses that use digital solutions are generally more resilient and adaptable to market impacts, as was seen during COVID-19 restrictions.
“SMBs now have the chance to fully embrace the digital economy to realise the efficiency gains, cost savings, and customer insights that digital tools provide.
“SMBs that are further down the track with digital transformation are now gaining a competitive edge through real-time data insights that help them achieve a much stronger connection with their customers to drive business growth.”
The perks of using digital technologies to help SMBs connect with their customers have been widely recognised for many years, but the broad societal shift to a digital economy has resulted in most consumers, businesses, and government agencies doing more business online in the last year.
Jeremy Powers, Regional Vice President for Australia and New Zealand regions at MongoDB, said that the pandemic demonstrated the power of innovation, which can help businesses adjust to changing trends.
“Before the epidemic, Australian businesses, large and small, who invested in innovation were the ones that successfully reacted, adapted, and generated new opportunities.
“WooliesX is a great example.
“The organisation came into the pandemic with an established approach and commitment to innovation that meant it was able to thrive and find new ways to deliver customer value, including rolling out a new e-receipt solution.
“On the other hand, we’ve seen companies rush to invest in digital capabilities just to survive the day-to-day, without committing to an innovative long-term strategy.”
“You can’t buy competitive advantage, and you have to build it, and for many companies, that means real technical innovation.
“As more Australian businesses rely on technology to deliver their products and quickly adapt to changing market conditions, innovation can’t be a box-ticking exercise.
“Businesses who have fallen into the trap of faux-innovation are increasingly in danger of getting caught short.
SAP Concur has identified three ways that SMBs can adapt to optimise benefits from the digital economy in the new financial year.
Enhance the connection with customers:
“Many organisations have accelerated digital transformation to sustain business operations. Now is the time for businesses to fully realise the benefits of real-time data insights delivered through automated financial solutions,” says Mr Calle.
“For example, with live financial data, SMBs can quickly and easily identify and target customers based on their previous interactions with the business.
“This helps the business determine its best-selling products and services at any point and develop complementary services based on buyer behaviour.
“Automated digital tools help businesses more effectively keep pace with constantly changing customer needs and the growing demand for personalised products and services.”
Reduce the cost and risk of manual processes:
“Labour-intensive manual processes can be the biggest ongoing business cost and risk for SMBs. Spreadsheet-based travel, invoicing, and expense management processes, for example, take up valuable employee and management time that could be better spent on revenue-generating activities.
“These processes also have a high risk of error and fraud, which costs the company money. Additionally, non-compliant expense claims can cause regulatory or taxation issues for the business.
“Digital tools streamline the travel, invoicing, and expense management process so that only compliant claims are accepted, which reduces regulatory and fraud risk for the business while saving administrative costs.”
Improve productivity and overall business performance:
“The best way for SMBs to drive growth in an ongoing volatile market is through improving business efficiencies to support the increased productivity of high-value tasks.
“Access to real-time data lets SMBs quickly identify productivity bottlenecks and opportunities to improve efficiencies and overall business performance.
“SMBs that use digital tools to drive efficiencies are generally faster to respond to customer and market demands, which gives them a competitive edge.
“Government agencies and large enterprises are increasingly adopting solutions such as e-invoicing to gain better operational efficiencies.
“Savvy SMBs that do business with government agencies also invest in e-invoicing solutions, so businesses that choose to maintain manually intensive processes could soon be left behind.”