Australia’s small businesses sit amongst the most digitally savvy in the Asia Pacific region according to new research by Cisco. Despite ranking highly on the Asia Pacific Small Business Digital Maturity Index, Australian businesses mainly fell into the ‘digital observer’, category rather than digital natives.
Australia ranked fourth across 14 countries from across the region. SMBs in Singapore, Japan and New Zealand were ranked the top three that are the most digitally mature.
The Index details the digital maturity of Australian SMBs, with stages ranking from least to most mature earning the monikers: digital indifference, digital observer, digital challenger, and digital native, respectively.
Based on an independent survey of 1,340 respondents, the digital maturity of SMBs were evaluated across four business dimensions: the application of technology, digital transformation strategy and organisation, processes and governance and lastly, the capability to source, manage and retain the right talent to enable their digital transformation.
The survey found many small business owners (43 per cent) are simply fighting to keep pace with the rapid pace of transformation. While 39 per cent of those surveyed did not even have a digital strategy in place.
With SMBs accounting for 97 per cent of all businesses in Australia, the sector is critical to the country’s overall economic growth. Cisco’s Vice President, Commercial and Small Business in Asia Pacific, Japan and Greater China (APJC), Bastiaan Toeset, said Digital Transformation is no longer just a vision for businesses. It is the reality.
“The disrupting factor is quite high. SMBs are the backbone of every economy in our part of world. They employ the majority of the workforce and drive innovation. But being disrupted is a concern for SMBs – it’s an uncomfortable place to be in within a very competitive environment,” says Toeset at the launch of the report at Cisco Live.
“An increasing number of companies across Asia Pacific are adopting technology, or gearing up to do so, and going digital. SMBs, especially, are looking to harness the power of technology to overcome key challenges, unlock new avenues of growth and scale rapidly when required. Technology is also a great equaliser for SMBs as it empowers them to compete effectively with larger competitors.”
Among the top three technologies that SMBs are investing in, 14.8 per cent choose cloud solutions. Security is also front of mind for SMB investment (16.5 per cent).
Toeset suggested SMBs uptake of cloud services was predictable as it provided business owners with an agile, flexible option. Yet according to Toeset, all clouds are not created equal.
There is also a concern as there is not one cloud – it’s a public-private hybrid – and once you start to invest in the cloud you have to also consider security.”
Certainly, SMBs are far from immune to cyber threats. In fact, the statistics are alarming.
“Actually, they are more vulnerable,” says Toeset. “50 per cent of SMBs that have been breached are out of business in 6 months.”
Yet Toeset says this is not the most significant concern for the nation’s SMBs.
“As companies grow and tech advances, companies are looking to upgrade their infrastructure. Yet 17 per cent of those surveyed said they have a lack of digital skills to help them make the transition. If you don’t know who can do it for you – it’s a significant roadblock. Small businesses are not necessarily having all the insights they need to operationalise their businesses moving forward.”
Cisco’s SMB Segment Leader in Australia and New Zealand, Nykaj Nair, said the transformation journey for SMBs has only just begun and there is an opportunity for Australia to lead the way.
“To do this, we need to build on the momentum and address some of the key challenges the sector faces.
“As technology adoption continues to gather pace, companies are generating vast amount of data. The key differentiator between companies that are successful and those that fall behind will be their ability to analyse data and provide insights to various teams to take specific actions to address key challenges and leverage growth opportunities. This is where the true power of digital transformation for companies can be truly realised,” Nair said.