You would be surprised how many businesses today avoid technology – especially with the irrefutable proof that it can add to not just the ease, but success, of running a company, with companies proving more profitable after being forced to adopt digitisation during the pandemic. But in light of the recent Federal Budget, the government has been urged to help more.
Last week, MYOB released results from new research which shows that 466,062 small and medium-sized businesses have been left behind by digitisation. Most of these businesses noted that they were deterred by adopting digital tools for fears that the cost would outweigh the benefits.
Helen Lea, chief employee experience officer at MYOB, told Accountants Daily, “Our new research tells us that 24 per cent of SMEs are worried new technology is too expensive and a further 24 per cent (say they) don’t have the time to set it up.”
Lea also remarked on the success of businesses who were forced to digitise during the pandemic.
“Of these businesses (who digitised), 39 per cent found themselves to be more productive and 34 per cent were more profitable,” she said. Furthermore, eighty-five per cent said they were able to keep their business running thanks to newly implemented digital tools.
The research showed that one in five of the businesses surveyed, which make up about 20 per cent of a 2.29 million-strong sector, have yet to engage with “critical” digital tools for day-to-day tasks like compliance and supplier management.
“Our research supports this: 27 per cent of respondents shared that an incentive, such as a tax deduction, would help them get started.”
The federal budget revealed on Tuesday last week included a $1.2 billion digital spend, $500 million of which was allocated to the overhaul of government digitisation efforts, and only $28 million to bolstering digitisation efforts across the small business sector.
It is a package which was described by industry leaders as falling far short of what was required.
Dr. Jane Rennie, general manager of external affairs at CPA Australia, told Accountant’s Daily that, “Investing in Regtech without helping businesses digitalise is a bit like trying to turn half a light bulb on and keep the other half off.”
“It won’t work, it’s short-sighted and really quite disappointing.”
Regtech, or RegTech, consists of a group of companies that use cloud computing technology through software-as-a-service (SaaS) to help businesses comply with regulations efficiently and less expensively. Regtech is also known as regulatory technology.
Of the 1,000 businesses surveyed, 40 per cent of businesses reported using digital cloud-based software for work in progress (WIP) management, while 38 per cent used it for staff management, and another 37 per cent used it for growth opportunities, like marketing.
It also found that only 26 per cent of the small business leaders surveyed reported taking to social media to engage with their customers.
“We are recommending to the government that they consider a refundable rebate on new Software as a service (SaaS) subscriptions for SMEs with 0–199 employees, with a tiered incentive structure to promote end-to-end digitisation of businesses,” Lea explained. “This change alone we predict is worth $10.5 billion to our economy in the short term.”
“If you combine this with the annual saving of $23.5 billion afforded by a mandatory introduction of B2B e-invoicing, adoption of which could also be motivated by this SaaS incentive, it’s a pretty compelling case for putting our trust in small businesses as Australia’s economy recovers and grows.”
Walker Hill’s Take:
Choosing when and how to invest in your business can be one of the biggest challenges that small business owners face. But, there is a reason Walker Hill are fans of digitising for the ease and security of their clients and staff.
Just over two years ago, Walker Hill made the investment in moving to a cloud- based work environment. In short, adopting a cloud-based environment was the best way forward- and the best way to make IT infrastructure count. Cloud adoption has grown by over 300% and is predicted to be what businesses spend 80% of their IT budget on this year. We recommend any SME’s to seek out multiple quotes and, if necessary, invest in an industry-specialised Internet Technology Provider who can set up, train, implement and support your business through digital technology. The result is that you can do more in less time. Trust us, it is worth it.