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Business innovation: establishing an online presence

When we hear the words “business innovation” most of us immediately think of global technology innovators such as IBM and Apple. However, small businesses are often at the forefront of innovation as they develop new ways to tackle business challenges. Innovation should be everyone’s business. Online is a great place to start. Here’s why.

Intense global competition, rapid advances in technology and a fluctuating business environment demand agility—and with it innovation—from small and large enterprises alike.

The term ‘agility’ means adapting to change, embracing innovation and engaging with customers to create new value and integrating with the global market; things Australian small businesses already do very well. In fact, Australian small-to-medium enterprises (SMEs) are often world leaders in developing new ways to overcome challenges and evolve to meet the demands of an extremely competitive market.

While innovation encompasses more than investments in technology, implementation of information and communication technology (ICT) plays a critical role in improving business agility, particularly for SMEs. ICT can be likened to the engine room of innovation, helping SMEs to both create business opportunities and combat pressures from competition. The right technological solutions can help SMEs to cut costs, improve efficiencies and boost their bottom lines. Incremental improvements to internal processes, advancing product development through faster communication with customers, and product promotion and distribution through an online presence, can be the difference between success and failure in a competitive market.

Even slight changes help
For small businesses, slight improvements to processes, such as emailing invoices instead of printing them, can lead to significant bottom line benefits. Consider this: an organisation that uses paper takes on average 7.4 days to move a purchase from request to approval. Done electronically, the same process takes only takes 1.5 days. What could that sort of efficiency mean to your business? Companies across Australia in traditionally low technology industries are embracing ICT as a way to maintain resilience, sustain innovation and strengthen customer relationships. Take the salon and day spa market, for instance. While not particularly techno-savvy, business owners in this industry rely on the ability to collect business information and improve communication with customers.

Leading salon software

Australia is home to the world’s leading salon and spa management software, which was developed by a small team of Brisbane programmers and salon owners who identified a need for easy-to-use software to support small business. In 1993, Shortcuts Software launched the first salon management system to integrate with the Windows operating system, delivering a software package that is now used in 10,000 salons and spas worldwide. Shortcuts Software now has a suite of products that computerise the day-to-day operations of a hairdressing or beauty salon, with a fully integrated appointment book linking client information and the point of sale, advanced stock and services management, as well as client management capabilities to support loyalty programs.

When Shortcuts Software was acknowledged at Australia’s leading ICT awards the iAwards in 2003 for the “most outstanding product innovation by an SME,” the team had little idea their product would one day be sold in more than 45 countries, in nine languages, and with more than 130 staff located around the world.

Expand your reach

Access and adoption of ICT can help small businesses not only to attain and maintain their traditional edge, but also enable them to expand across customer bases, products and geographies to increase market share and global reach. Despite this, Australian small businesses still demonstrate some resistance to e-commerce. While many businesses have static presences—essentially brochureware—only half of Australia’s SMEs are open for business online.

According to the 2008 Sensis Business Index, 97 percent of SMEs now own a computer, and 94 percent are connected to the internet. The single most important reason for accessing the internet (as identified by 98 percent of all internet-connected SMEs) remains email for communication with clients, customers and suppliers. The second most important use of the internet is to search for information about products and services (89 percent), while the third highest usage is to obtain reference or research data (84 percent).

E-commerce opportunity

And here’s where the opportunity for small business lies. While the proportion of small businesses with a website continues to increase (up three percent in 2008 to 54 percent), only half of SME businesses are taking orders online (54 percent). This is perhaps unsurprising. While people are clearly comfortable researching a product or service online, they still like to make their purchases in bricks and mortar stores.

But unlike bricks and mortar, which is limited to a relatively small geographical location, e-commerce facilities can cross countries and continents to help you tap into global markets. What’s more, you can provide your customers with a new level of confidence and security, while maintaining your competitive advantage. People’s trust in online procurement is steadily growing. Sensis’ 2008 Business Index indicates that more people are placing orders for products and services online than ever before. And some 17 percent of SMEs who used ecommerce to sell made the majority of their sales online.

A critical factor in the decision of SMEs to commit to an e-commerce strategy—or any other business strategy—is the investment recovery timeframe. Almost two-thirds of e-commerce businesses surveyed last year (64 percent) indicated they had already recovered their investment in e-commerce. The message is clear: while differentiating your business online may have been a risk in the past, in the current economic climate it’s an opportunity that can’t be ignored.

—Ian Birks is Chief Executive Officer of the Australian Information Industry Association (www.AIIA.com.au).

CASE STUDY
Taking their products to the world

Since its inception in 2004, GoDo.com.au has grown to become Australia’s leading real time online booking service for activities, with a vast range of more than 2,000 activities from over 800 providers including fighter flights, cookery classes, motor racing and belly dancing.

Innovative software enables activity suppliers to upload their product details and availability in real time, giving them instant access to global tourism markets, while also providing customers with almost unlimited choice in adventures and experiences. In 2007, GoDo.com.au was presented with two iAwards (best ICT solution in the Tourism & Hospitality industry and contribution to Australia’s local ICT industry).

“Winning at the 2007 iAwards was a turning point in our global aspirations,” says CEO, Naomi Simson. “We knew that we had a fantastic technology, and we knew that we had dreams to take it beyond Australia and New Zealand. Winning the iAwards gave us the confidence to pursue overseas opportunities.”

Since the iAwards, GoDo’s team has achieved 70 percent growth year on year, and now works with 89 distribution partners, including ninemsn, Virginblue, Lonely Planet and Lastminute.com.au. In late 2008, Simson was named national winner for innovation at the Telstra Business Women’s Awards.

“Winning iAwards gave our company a badge of authority that our innovation must be good,” Simson explains.

The Australian Information Industry Association (AIIA) hosts the iAwards—Australia’s leading ICT industry awards designed to showcase and launch Australia’s next national and global technology success stories—each year. This year, the iAwards will be held in Melbourne on 27 May.

More information is available at www.iawards.com.au

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