Unlocking the value of SME IT investments
Ready or not, businesses had to become more agile and flexible than ever before, empowering their workforces to operate anywhere. Nowhere has this shift been more evident than in small to medium enterprises (SMEs), where the pace of change and technology adoption has been so significant that digital transformation has rapidly evolved into digital acceleration across industries.
"We know many small and medium businesses across Australia were severely impacted by the pandemic, with technology and connectivity becoming a lifeline for their operations," says Brendan Donohoe, Executive General Manager of Business at nbn co ltd.
According to a recent nbn-commissioned survey of 269,000 SMEs conducted by analyst firm Telsyte1, more than three quarters of SMEs have invested in technology that works best with high-speed connectivity.
The extensive study surveyed Australian SMEs with 5 to 199 employees across a wide array of industries including professional services, retail, construction, logistics, healthcare, hospitality, manufacturing and education. It identified video conferencing, employee devices, cloud and cybersecurity as the top areas for planned IT investment for Australian SMEs.
Aligning IT investments to your business objectives
Telsyte asked participants in the survey to share the level of impact different technologies had on their financial and non-financial key performance indicators (KPIs).
Financial KPIs refer to cost savings, revenue, profit margin, sales and tax-related impact, while non-financial KPIs relate to non-revenue or cost related factors, such as customer or employee satisfaction, relationships, productivity, quality of products and brand reputation.
It should come as no surprise that video conferencing was deemed the most financially impactful IT investment, with 81 percent of respondents saying it provided a good or substantial impact on financial KPIs. This was closely followed by Cloud IaaS (76 percent), data management technologies (70 percent), employee devices (66 percent) and VoIP (60 percent).
Furthermore, the survey found almost three quarters of SMEs invested to boost their connectivity due to the pandemic. Investments included more data, mobile connectivity and additional links for offices.
Connectivity sets the foundation for what tech solutions can be put to work and can give businesses the confidence and capability to adapt and do things differently.
The demand for greater connectivity has been reflected in activity on the nbn™ network. The changes brought on by COVID-19 saw data demand on the network skyrocket to its highest ever peak in 20202. Data from business applications such as video conferencing activity increased by more than 300 percent and remote access and VPN usage jumped to almost 250 percent compared to pre-COVID times2.
Agility and an ability to adopt new technology quickly have long been thought of as an advantage for SMEs, as they're often less encumbered by legacy infrastructure and applications that can slow down adoption for larger enterprises.
However, while the majority of SMEs with a digital transformation strategy had those plans fast-tracked by the COVID-19 pandemic, more than a third of SME leaders (38 percent) surveyed by Telsyte didn't think they were adopting technology strategically.
That means these businesses may not be maximising the value of their technology investments.
"I think a lot of organisations have been in survival mode and haven't had the time or the resources to look at a comprehensive digital strategy," Telsyte Managing Director Foad Fadaghi told a recent nbn webinar entitled "Balancing digital acceleration: opportunities and challenges for SMBs".
"But what's encouraging is that of those that have been doing it, over 80 percent have fast tracked a lot of their digital strategy adoption and over half indicated that they've fast tracked it by more than six months. So there are SMEs out there that are really at the forefront of adopting technology as well."
Top future IT investment areas for SMEs
The study found that SME leaders will continue to digitise the way they work, with workplace modernisation (53 percent), business intelligence (47 percent) and data management (46 percent) highlighted as their top IT investment areas for the future.
SMEs are also well placed for workplace modernisation given that the report also found that 57 percent of their businesses workforce are made up of 'digital natives' - a segment characterised by the technology on which they've been raised, and the digital solutions they expect to see and use daily.
Foad believes that the emphasis on digitising business processes where possible is driven by today's state of work, where remote and hybrid models demand digital solutions to function.
"SME leaders are learning from competitors and understanding the solutions that can help them streamline operations and employee engagement," he says.
The interest in data management and business intelligence reflects the want for deeper insights from business data. Speaking during the webinar, Jon Evans, CEO of managed service provider Enablis, says he believes the SMEs that have built the foundation of their digital strategies around cloud, cyber security and ongoing modernisation are best placed to leverage that data to inform business decisions.*
"The exciting thing, I think, is that there is a really good chance now for SMEs who may not have invested much strategically in IT, to leapfrog a lot of the legacy IT that is no longer needed and end up in this new world that is so much simpler, cleaner and more agile," he says.
Finally, the investment focus on employee-driven technology highlights not only the importance in updating devices as employees increasingly work away from the office, but the operational processes and underlying infrastructure that go into supporting them.
One of the challenges that many SMEs have faced during the pandemic is a skills shortage, a point that was exacerbated by border closures. But Telsyte's Foad believes that this is an area where SMEs can learn from larger businesses and utilise technology to tap into the pool of talent available in geographically diverse locations.
"I think there's a lot of opportunities for small businesses that think outside of the box and utilise this technology," he adds.
Laying the digital foundation
SMEs are not slowing down their IT investment as they look to reinforce business continuity and uncover a competitive edge. With more leaders willing to experiment with new technologies, they will require a digital foundation that can enable the agility to test new solutions and add quickly to their business-as-usual toolset.
"Our small and medium business community is the backbone of the Australian economy so it's vital we find ways to help these businesses lift their digital capability and make informed, strategic decisions when it comes to their technology investments," nbn's Brendan Donohoe says.
By engaging with an nbn™ accredited adviser early,^ businesses can explore various options and considerations that may help land a digital foundation that is modern, flexible and capable of supporting business transformation now and into the future#.
1. Telsyte Australian Digital Workplace Study 2021
2. nbn usage data. Figures represent nbn™ network activity changes from pre-COVID to November 2020. Cited in Adaptation in action: changing for a post-COVID world
* The views expressed in this article are general in nature and are not intended to constitute advice for your particular circumstances. You should make your own enquiries as to what technology and connectivity options are best for your business.
^ business nbn™ accredited advisers have undertaken a short course on the nbn™ broadband access network. nbn™ does not sponsor, endorse or guarantee any advice given or representations made (including any recommendations to purchase goods and services or purchase telecommunication services over the nbn™ access network from a phone or internet service provider) and does not guarantee the accuracy of that advice or representation.
# Your experience, including the speeds actually achieved over the nbn™ network, depends on the nbn™ access network technology and configuration over which services are delivered to your premises, whether you are using the internet during the busy period, and some factors outside nbn's control (like your equipment quality, software, broadband plan and how your service provider designs its network).