A new survey by Commonwealth Bank has found many SMEs are failing to adopt new technology that could help grow their business.
The research revealed 80% of small business respondents are not adopting potentially beneficial technology, with almost half (48%) conceding they are reluctant to do so due to a lack of understanding of how the technology works and the potential benefits.
According to the survey, while 55% of respondents have access to customer information that can feed into digital technology, small businesses are unsure about how data can enhance their business performance, with almost two-thirds (62%) not looking to use it at all.
Karen Last, Commonwealth Bank’s general manager of small business, says it is imperative small business owners understand how data analytics can help them make better-informed decisions.
“A significant number of small businesses are reluctant to implement data analytics due to cost, or they believe it has limited value, or belongs in the ‘too-hard’ basket. These are all preconceptions which must be addressed so the benefits for small businesses can be realised.”
A 2012 survey by Deloitte found one quarter of businesses said analytics significantly improved competitive positioning.
“Ultimately, analytics is valued if it can be proven that it helps a company become tangibly better – financially or operationally. And indeed, most survey respondents –55% – reported that analytics has ‘significantly’ or ‘fairly’ improved the organisation’s competitive position,” the Deloitte report noted.
In addition to the uptake of technology, the Commonwealth Bank survey also uncovered stress factors for small business owners, with cash flow a key pain point.
Half of respondents admitted they had not paid themselves a wage one or more times in the past year due to cash flow challenges, with credit cards found to be the most common tool to manage cash flow, followed by sending invoices to customers on time (37%) or dipping into personal funds (32%).
However, Last highlights that understanding and using funding options such as car and equipment finance, lines of credit, overdrafts, and loans can take a lot of pressure off small businesses and provide greater certainty.
“Relying on credit cards isn’t always the most cost effective option for the short or longer term. Overdraft facilities can be set up online within 10 minutes and don’t have to be used until necessary.”
And the failure to adopt potentially time- and money-saving digital and analytic technologies could be impacting the personal wellbeing and development of small business owners, with 44% saying they do not spend enough time on personal wellbeing and development – despite one in two claiming looking after themselves is crucial to ensuring productivity.
“The unfortunate irony is that when implemented effectively, these technologies can enable individuals to gain back precious time to invest in their wellbeing; which in-turn fuels improved performance, productivity and creativity,” says behavioural scientist, Dr Johann Ponnampalam.
“These results suggest that small business owners need a nudge to adopt these time saving technologies.”