The rapid rise of the digital economy during the past year has created new opportunities.
Australian and New Zealand small and medium sized businesses (SMBs) can improve their resiliency and profitability, provided they can effectively harness the right tools and processes.
Digital tools have been widely available to help SMBs connect with their customers for many years; however, in the past year, the broad societal shift to a digital economy has meant that most consumers, businesses, and government agencies are now doing more business online. This rapid digital transformation is helping boost business value for SMBs, with a recent SAP Concur survey showing that digital tools helped businesses improve profitability by 20.6 per cent, boost productivity by 17.8 per cent, and achieve a 17 per cent faster cash-to-cash cycle.
Businesses that use digital tools can also benefit from real-time customer insights, streamlined operations, and automated financial processes. This can save valuable time and resources for SMBs, many of which are constantly trying to do more with less.
There are three important ways businesses can benefit from digital systems and move towards futureproofing their businesses in the new financial year.
1. Build a stronger customer connection
Digital transformation has often been employed behind-the-scenes to streamline processes and reduce unnecessary manual work to decrease costs. Many organisations have overlooked another key benefit that automated solutions can deliver: data analytics and insights. By analysing real-time data, organisations can gain a deeper understanding of their customers’ behaviours and preferences. They can use trends to predict future behaviour and even influence customer decisions. This helps the business to promote best-selling products and develop complementary services to increase revenue streams.
As customers increasingly demand personalised products and services, and an individualised experience with the brands they do business with, this ability to analyse and act on live data is invaluable.
2. Reduce costs and risks by eliminating manual processes
Wages and salaries tend to be the biggest cost centres for businesses of any size, and SMBs are no different. Manual processes take up valuable human resources and introduce significant risk into the business. The time employees spend on managing processes that could otherwise be automated, such as travel, expense, and invoice management, would be more valuable if it were spent on value-adding initiatives.
Errors that inevitably creep into manual processes can also be reduced when these processes are automated. These errors don’t just incur workers’ time to rectify; they can come with additional penalties such as regulatory or taxation issues, depending on the error. Digital tools streamline the travel, invoicing, and expense management process so that only compliant claims are accepted, which reduces regulatory issues, as well as fraud risk for the business while saving administrative costs.
3. Increase productivity and improve business performance
Any incremental improvement in business efficiency can contribute to an overall boost in organisational performance. In a competitive landscape, every small advantage counts. The more productive an organisation is, with less time devoted to procedural, manual tasks, the more time staff members can spend on high-value tasks that contribute to profitability. Access to real-time data lets SMBs determine which activities are low-value versus high-value and, therefore, where staff members should focus their time and energy.
Invoicing is a key example of this. Too many organisations manage invoices manually, which takes up time and resources and is subject to error. Automating this process via e-invoicing reduces cost and risk. Government agencies and large enterprises are already adopting e-invoicing to gain better operational efficiencies. Savvy SMBs that do business with government agencies are also investing in e-invoicing solutions to gain a competitive edge.
Organisations that automate in the right areas, such as invoicing, can advance past their competitors while those that remain wedded to manual processes may be left behind.
Businesses now have the chance to fully embrace the digital economy to realise the efficiency gains, cost savings, and customer insights that digital tools provide. Those are further down the track with digital transformation are now gaining a competitive edge through real-time data insights that help them achieve a much stronger connection with their customers to drive business profitability.
Choosing the right tools can make businesses more efficient, cash-positive, and customer-centric. All of these elements together are key to achieving sustainable growth. SMBs that have recognised this and are optimising their tools and processes are already reaping the benefits.
It’s important to note that not all digital technology is created equal. SMBs won’t automatically start to see benefits just because they introduce digital technology. It’s important to use the right technology from a trusted provider, with solutions aligned to organisational challenges and opportunities. By adopting the right solutions to address the most important areas of the business, organisations can improve their agility and reliance, as they work to future-proof the company.