Much is made of the impact digital technology is having on the business world – but how much value can artificial intelligence (AI), blockchain and machine learning really add for small business operators?
At all levels of the enterprise – from small through to corporations – ways of doing, thinking and being in business now employ digital technology. A 2017 report by Deloitte Access Economics, based on a national survey of over 1500 small businesses, found SMBs with advanced levels of digital engagement are 50 per cent more likely to be growing revenue and earn 60 per cent more revenue per employee.
Previous Deloitte research found Australian SMBs that have advanced levels of digital engagement are over eight times more likely to be creating jobs, with an average of 12 additional jobs than the previous year; seven times more likely to be exported, and over 14 times more likely to be innovating by offering new products or services.
Deloitte says SMBs expected face-to-face sales to decrease from 45 per cent in 2015/16 to 37 per cent in 2020/21. In fact, this predicted decline has already largely occurred three years early, with face-to-face interactions now making up 39 per cent of SMB sales.
But employing digital technology does not simply mean plugging in a laptop and setting up a website.
SMB operators have to be able to organise, identify, analyse and ultimately use data to inform business strategies; and apply sophisticated thinking to find simpler answers hiding underneath layers of complex, interwoven webs of data. For small businesses to avoid being outsmarted by their competitors, they need to seek out ways to implement cloud-based software and other digital solutions. It is believed that if a business adopts artificial intelligence and machine learning it will lead to greater competitive advantage. Being an expert in data analysis or even hiring someone that is a qualified data scientist will result in higher ROI because the integration of AI in the business process ensures more accurate decision-making.
With digital technology enabling faster communication, buying power and increasing options for customers – who can now simply click a few buttons – businesses that have the advanced technical and mathematical skills to unpick complexities and make sense of the numbers, will swim instead of sink.
Australia Post research recently found Aussie shoppers will be just as likely to open their wallets online as they will in-store in a decade’s time. By 2030, it is expected that one-in-two purchases will be made digitally.
In a survey of almost one thousand small and mid-size Australian businesses across retail, manufacturing, logistics, financial services, education, health, and utilities found that almost half (49 per cent) expect online retail to reach parity with bricks-and-mortar retail sales in 2030.
But for all the advantages afforded by digital tech for SMB, there are new threats to doing business safely. The latest BDO and AusCERT Cyber Security Survey report gives an overview of the cyber security risks and realities faced by the Australian private and public sectors in 2018/2019 — finding 64 per cent of data breaches were caused by malicious or criminal attacks, while 33 per cent could be attributed to human error.
Data loss and the theft of confidential information incidents rose by 78.68 per cent compared to 2017. Data breaches experienced through third-party providers and suppliers also rose by 74.30 per cent.
In the digital age of business, SMBs that have the technical skillsets to prevent, curb or respond to cyber threats, are less likely to suffer detrimental attacks on their business.
Finally, a report on AI & The Future of Work by Credit Suisse Research Institute [CSRI] finds while technological change will not lead to the end of work, it will certainly displace people from occupations and sectors.
CSRI says the more data that is used, the more valuable a business becomes since getting relevant data in quantity is always difficult and expensive. This is why Google Maps becomes more accurate as more people use it: the underlying algorithms have more data to work with, so the apps become even more accurate.
From increased revenue to more accurate decision-making, it’s clear there are endless ways digital can transform SMB.