Banking News

SMEs Must Not Fall Behind Digital Transformation Wave

SMEs Must Not Fall Behind Digital Transformation Wave

(14 September 2020 – Australia) PwC Australia research shows Australian enterprises digital transformation efforts, left on the ‘back burner’ for too long, may now be ‘firing up’ in response to the COVID-19 pandemic’s remote working necessities however much more needs to be done.

Small businesses must keep up with evolving customer and staff expectations by accelerating digitalisation efforts. A new report by PwC Australia outlines four key factors necessary for successful digital transformation including:

  • Thinking Digital - Digital mindset, digital culture: Creating a complete digital experience
  • The Technology – Technical implementation that simply works
  • Cyber Secure - Secure and compliant by design cybersecurity
  • ‘Data, Data, Data’ – Data reliance

“When faced with disruption and the need to leap into a more digital world, Australian businesses responded quickly. More than anything else, it showed that when needed, the ability to digitalise was there. Hopefully that experience, though mitigated by circumstances beyond their control, will provide the impetus for organisations to keep prioritising their digital progress” the report published by PwC Partners Danielle Malone, Scott Evans, Matt Benwell and Vanessa Symons stated.

The DBS Digital Treasury Index found seven in ten companies in the Asia-Pacific (APAC) region risked being left behind by a lack of digital strategy and execution plan in July 2019, preceding the coronavirus pandemic.

“More and more, companies have come to understand that digital transformation involves a complete transformation across their organisation, from front-end sales engagement to back-end operations. And this requires the involvement of every part of the company’s organisation. We are seeing more and more CFOs and Treasurers being called upon to drive this change because they have broad oversight and in-depth understanding of key business drivers and organisational challenges” stated DBS Group Head of Global Transaction Services, John Laurens. 

In H1 2020, more than one in four small businesses reported closing and one in three cut jobs according to research conducted by the World Bank, the Organisation for Economic Co-operation and Development (OECD) and Facebook. To adapt to this ‘new normal’ of transformed business operations, many firms have implemented digital transformation technology.

The study was based on responses from 2,000 small businesses from eight global markets and found by increasing digitalisation efforts, the global economy would experience a 42 percent faster rate of growth and expand economic activity by 5.5 percent.

The three most commonly reported challenges associated with digital transformation were digital skills and talent shortage as well as insufficient budgets and previous budgetary commitments. ‘Cultural resistance to change’ was also listed as a top limiting factor.

Respondents felt that digital technologies will play an increasingly fundamental part of their operations moving forward. By 2021, about half of respondents expected more than 30 percent of their business to be digital. More than one third of businesses surveyed are investing in solutions to enable remote work, and 33 percent "will invest in digital technologies to improve online sales." Additionally, 32 percent of respondents are investing in "talent and the right skills" and another 32 percent plan on developing digital business strategy.

"The COVID-19 pandemic has exacerbated the digital divide that was already present in the small business market, and it is forcing companies to accelerate their digitalisation” said IDS Head of Digital Transformation & SMB Research at IDC, Daniel-Zoe Jimenez.

"Small businesses are realizing that digitalization is no longer an option, but a matter of survival. While the research shows many small businesses are making progress, they should increase focus on digitalizing processes and operations through the use of digital technologies to ensure business continuity and future resiliency” Jimenez added.

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