In 2015, PwC launched a report, Small Business:Digital Growth, showing if Australian small businesses embraced internet and mobile technologies, they could produce an extra 49 per cent of private sector output over the next decade. The modelling showed South Australia could earn a $2.7 billion boost to the economy, with more than 47,000 businesses set to gain from digital strategies.
Fast forward a few years and the Australian small business sector might be more aware of the need for digital transformation, but adoption rates are still painfully slow.
SMEs need to future-proof their businesses – fast
Last month, a Deloitte’s report – 2017 Global Human Capital Trends – found only 9 per cent of Australian companies say they understand how to build a future-ready organisation equipped for digital disruption.
This finding should be a wake-up call for South Australia. Unless we provide more effective support to help lift digital performance in our small and medium businesses (SMEs) we may come unstuck – and it’s jobs and growth at stake.
‘State of the Nation 2016 – Small Business Digital Engagement in Australia’ (by tech start-up NetStripes) found Australian small businesses that engaged with digital technology grew 20 per cent faster per annum – and they also hired, on average, two more people per year.
Where can we turn for help?
Adapting to change is certainly a challenge, especially for business owners who are not digital natives, but that shouldn’t stop them.
SMEs should to look at developing digital champions within the business who can assist to drive change and then help others adapt. Attracting and retaining the right talent will also be important and that means a long-term investment in training and staff development.
Performance management models probably need to change too, to keep up with an environment of constant change. A coaching model might be more appropriate with regular dialogue, compared to once a year reviews. Professional development opportunities will also be more essential than ever.
“Learning for life” needs to become a motto we put into action in workplaces because the pace of change demands it.
Being prepared to seek advice is important in this environment too. SMEs would also do well to remember there’s help available through various industry and government programs, including ebizSA, aimed at getting business owners up to speed.
But so much more could be done.
Other countries lead the way – SA should get on-board
For inspiration, the South Australian government should look to Singapore, a powerhouse of small business activity.
In January, Singapore announced a A$75 million “Go Digital” campaign targeted squarely at SMEs and aimed at increasing productivity through digital transformation strategies.
The program addresses specific sectors, including retail and food services, and includes targeted advice and assistance for each stage of growth provided through specific SME Technology Hubs, as well as extensive funding support and grants.
Singapore’s model includes helping to connect SMEs with existing technology to boost productivity. And that’s important, because many SME owners are short on time, aren’t across all digital developments, and still think price is still a major barrier.
For example, cloud and app services which assist in streamlining financial processes, collaborating with a mobile workforce and capturing intelligence on how a business is performing, are now highly affordable options for smaller businesses because they use subscription-based pricing models.
Digital is not a threat, it’s an opportunity
Some might be afraid of the pace of change and worry that digital technologies will put them out of business. But that won’t happen if we adapt and use the opportunities presented – the real threat is if we don’t.
I’ve seen this happen first hand. Accounting, investment and financial advisory services were one of the first industries to be faced with potential game-changers like robo-advice and DIY online accounting apps. But the industry has since learnt that these technologies provide us with tools, but they don’t replace the need for our services.
In fact, they help us to thrive, allowing professionals to add value to clients through automation of processes, freeing us to concentrate on the provision of strategic advice and an expanded suite of offerings.
Disruptive technologies like robo-advice can actually help grow financial services firms by making people more aware of multiple investment options. In the end, people still need someone to talk to who can understand them and their emotional needs so they can tailor solutions that fit.
The fact is customers are very quick to adopt new technologies that provide a benefit.
Just think of recent disruptions like mobile banking and how Uber used digital services to transform the transport industry and now restaurants with Uber Eats.
We need to keep up and, if we do, disruptions like these can create new opportunities.
Being open to possibilities is the first step. Getting more SMEs on-board the digital train will only bring rewards, not just for business but for the state.
Tania Tonkin is a business advisory specialist. She is a director at South Australian accounting and financial planning firm dmca.
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