OKI Data Australia, a global manufacturer of business printers, multi-function devices and wide format solutions, has released its 2018 OKI SME Business Efficiency Survey.
The fourth in an annual series, the survey examines the ways in which Australia’s two million small and medium sized businesses are working to expand and become more efficient. The results also illustrate how perceptions have changed over the past 12 months.
Responses were collected from 798 SMEs across all Australian states and territories. Recipients answered questions on a range of topics, including the business efficiency initiatives they were pursuing and whether technology was helping or hindering their efforts. The survey found 83% of Australian SMEs considered they were operating cost effectively. This is only a slight variation on last year, when 82% of businesses reported being in a similar position.
Failure to harness the power of technology prevents many SMEs from running their ships as tightly as they’d like to. Forty-eight per cent of those which believed they were operating inefficiently cited IT and business systems as an underlying cause and 30% cited web site and e-commerce costs. By contrast, lack of efficiency around operational costs (26%), supply chain (20%) and leasing (10%) was of significantly less concern to this cohort. Conversely, around two thirds of the SMEs which considered themselves to be running efficiently attributed their ability to do so to ‘efficient IT purchases’. Investments in digital marketing and ecommerce initiatives were both cited as efficiency drivers by 28% of SMEs.
“The survey results this year continue to tell a tale of two companies,” said Antonio Leone Marketing Manager ANZ at OKI Data Australia. “There’s a clear distinction between Australian SMEs which have identified the opportunities digital technology can deliver and strived to embrace them and SMEs which haven’t and feel they are falling down on the efficiency front as a result.”
The latter group was more likely to find IT staffing costs a burden, while for efficient organisations it was not usually an issue, according to Leone.
“One of the benefits of efficient technology is that it doesn’t need excessive resources to manage it – IT employees are effectively viewed as assets who can generate additional revenue, not components of a cost centre that are needed to keep complex technology running,” Leone said.
The survey showed there was a strong understanding that efficiency was desirable, if not imperative, for enterprises operating in the competitive SME landscape. Of the SMEs which don’t believe they are operating efficiently, the desire to improve appeared to be enormous. Close to 90% of respondents in this cohort stated cost efficiency was a critical component when selecting suppliers; a higher percentage than was recorded among organisations which believed were already operating efficiently.
“The historical data we’ve gathered suggests SMEs view efficiency as a long-term investment and an ongoing concern,” Leone said. “Regardless of whether they believe themselves to be running efficiently or not, SMEs look to partner with, and purchase from, organisations which are able to make a positive contribution to this cause.
Outlays are not – and need not be – large. This year’s survey found 67% of SMEs spent $5000 or less on technology to improve their efficiency in 2018; up from 59% in 2017.
A further 21% of SMEs spent between $5000 and $15,000, while just 3% spent more than $100,000. This finding illustrates the fact that investing in efficiency need not be a multi-year, multi-million dollar matter. Rather, SMEs which spend small amounts regularly and strategically can achieve significant results, according to Leone.
“Replacing aging technology with more modern, efficient technologies is a great opportunity for SMEs with limited resources to improve their business positions,” Leone said.
Savings realised from efficiencies were being invested in a range of ways, the survey found. Around a third of SMEs reported simply saving the money, while 24% invested some of it in further efficiency-based initiatives. Some 19% were putting the freed-up funds towards expanding their product and service offerings while 8% had hired additional help.
“Replacing aging systems, equipment and infrastructure with more modern, efficient technologies is a great opportunity for SMEs with limited resources to improve their business position,” Leone said. “It’s exciting to see the variety of ways in which Australian SMEs are choosing to do this. We’re looking forward to seeing how their efforts in this area are reflected in next year’s survey results.”