Despite an investment of $2.2 billion each year on digital solutions by Australia’s SMEs, a new report says three in five of them are finding some of these tools are actually hindering them in improving business operations.
Research from business management platform MYOB reveals that 59 per cent of the 1500 SMEs surveyed say they are currently experiencing “bad digitisation” wherein their business and people management software apps and tools are not seamlessly integrated with each other, resulting in a decreased efficiency in operations.
“To put it in perspective, Australian households spend around $660 each year on streaming subscriptions like Netflix and Kayo, while our data shows the average SME spends 25 per cent more than this on software subscriptions,” Daniel West, Chief Sales and Support Officer at MYOB, said.
“The digital systems that businesses use…are not integrating together properly and it’s costing businesses dearly. With rising inflation rates, minimum wage increase pressures and ABS data showing over a third of businesses expect to increase their prices over the coming months, businesses need to be smart with their spending,” West added. “They cannot afford to waste money on services that are not truly helping them.”
Over a quarter, 27 per cent, of the SMEs surveyed have experienced costs blowing out because of disconnected digital tools. MYOB estimated that around $1.4 billion is being wasted by Australian businesses each year on unused digital tools. Meanwhile, 42 per cent admit they have given up using some digital business solutions due to their inefficiencies, but are still paying for them. When asked why they still pay despite no longer using these tools, the top reasons included that it was too much hassle to change, or because there is a lack of better alternatives to switch to.
“It’s subscription overload for businesses,” West said. “Many consumers are cancelling subscriptions amidst rising cost of living pressures, and it’s an optimum time for businesses to also assess their subscription overheads, especially if some are sitting there unused. Choosing tools that offer multiple services in the one place or ensuring they only pay for the features they really need, could help businesses alleviate the financial and productivity costs they’re facing.”
The report also noted that 12 per cent believe that getting rid of software applications they seldom use could save them between $100 and $200 each month, while nine per cent estimate it could be a $200 to $400 monthly saving.
The research also revealed SMEs are currently wasting the equivalent of one working day each week (seven hours) on average carrying out tasks caused by a lack of integration between their digital tools, and 91 per cent are found to be wasting valuable time on manual tasks or having to duplicate jobs, such as entering information from one system to another (53 per cent), checking for consistency across the platforms (39 per cent), and editing or fixing errors after information is transferred between systems (21 per cent).
“As an industry, software companies like ours need to take this “bad digitisation” burden off businesses and work on creating better-connected systems,” West said. “Nothing should hold back ambitious businesses, and we recognise we need to do something about it.
“What has become evident from our research is that local SMEs are really struggling to find systems that truly integrate with each other, or the one solution that offers all the capabilities they need all in the one place,” West concluded.
