MYOB Business Monitor: Over 1/3 of SMEs miss out on digital economy benefits

24 Oct 2013

  • Over 1/2 don’t have their own online site – social or traditional
  • Tech-savvy operators enjoy big business benefits
  • SME top pain points have less impact on online-savvy operators

At least one third of small to medium businesses are reducing their performance potential by overlooking significant opportunities offered by the digital economy, according to new research into online technology usage.

The latest MYOB Business Monitor Report, a survey of 1,022 Australian SME owners and managers by research firm Colmar Brunton, found less than four in 10 (38%) have a business website - unchanged on six months prior.

12% of these operators also have a business social media site, and a further 8% have a social media site only - a new question for this survey wave. The proportion using social media in some way for business rose to 33% - up on 21%.

Only 16% said they use cloud computing in business - also unchanged on six months prior. Accounting software usage was relatively stable at 64% from 67%.

Tellingly, business operators who utilise online technologies were more likely to see a revenue rise in the 12 months to August this year. Those with both a business website and a social media site (12%) were at least 63% more likely to see revenue rise than those who didn’t have one of these sites. This leading edge was followed by SMEs using cloud computing, who were 59% more likely to see an annual revenue rise than non-cloud users.

Business Division General Manager James Scollay says there is tremendous scope for Australian business operators to boost their financial performance, strengthen customer acquisition and retention, enjoy work environment flexibility and improve business productivity by using online technologies.

“Businesses that use online technologies are increasingly outperforming their less tech savvy competitors,” he said. “That’s why it’s vital for government and business leaders to work together with our business community, sharing knowledge about the benefits of embracing the online world and supporting them on their journey. Even the simplest insights can make the world of difference to a business.

“Half our respondents don’t have an online presence. Our research found those using a website and social media in business say these efforts produce more customer enquiries or leads and greater sales conversions. Those using cloud technology say it reduces IT costs, allows access to more technology and enhances their ability to work remotely. That’s why we encourage businesses of all shapes and sizes to make their business life easier by reading up about the benefits of implementing technologies such as a website and social media presence, online accounting software and so on. The internet has a range of forums, blogs and video tutorials on these topics.

“One third of SMEs are missing out on many benefits – a proportion that is way too high in this digital age. They are in danger of being left behind other businesses that have taken the online leap.”

Tech-savvy operators enjoy big business benefits Further supporting the digital cause, SMEs embracing online technology had a more positive revenue outlook. 39% of those who run both a website and social media site for their business were expecting a revenue rise in the next 12 months, versus 22% of those without these sites. 31% using cloud were expecting a rise, versus 24% of non-users. Similarly, 31% of those with business website were expecting a revenue rise, versus 21%. And 26% of accounting software users were expecting a revenue rise, versus 21% without accounting software.

SMEs who use cloud computing, use a business website, and/or use accounting software said they had more work/sales than usual in their short-term pipeline compared to those who don’t use these tools. And although work-life balance satisfaction was similar for SMEs with or without an online presence, and with or without accounting software, cloud users were slightly more likely to be satisfied than non-users (57% versus 50%).

Top pain points have less impact on online-savvy operators The MYOB Business Monitor found fuel prices was the top pressure point for SMEs overall, and has been since March 2011, while cash flow and price margins and/or profitability tied for second. Business operators who embrace online technologies felt less pressure from fuel prices and cash flow but felt more pressure from prices margins and/or profitability compared to their peers.

SMEs’ top five reasons to use the cloud Of the 16% of respondents that use cloud computing for business, the most popular reasons for cloud use were reduced IT costs, more access to technology and greater ability to work remotely (25% each). 23% cited increased productivity, and 23% said they used it because it allowed them to stay up to date with software and technology.

MYOB Business Monitor technology usage findings: industry, state, business tenure, business size & age group

Industry – greatest and least overall cloud, website and social media usage Respondents in manufacturing and wholesale had the highest proportion of operators with a website, at 54%, while the agribusiness sector had the lowest proportion, at 17%. The finance and insurance sector had the highest proportion of operators using cloud computing for business (36%), compared to agribusiness (4%). SMEs in finance and insurance led social media usage (52%%), while the lowest proportion was in agribusiness (19%). More than three quarters of agribusiness operators said they did not have an online presence (76%).

State – greatest and least overall cloud, website and social media usage South Australian SMEs led website usage (46%), while those in New South Wales, Victoria and Queensland had the lowest proportion (38%). South Australians had the highest proportion using cloud for business (18%) while Victorians and Queenslanders had the lowest (15%). South Australians and Western Australians led social media usage (37% each), while New South Welshmen brought up the rear (33%). Queenslanders and Western Australians were most likely to not have an online presence at all (53% each).

Business tenure – greatest and least overall cloud, website and social media usage Start-ups and establishing businesses were more online-enabled - 19% of each were using cloud computing for business. In contrast, only 8% of established businesses were using cloud. Start-ups were also more likely to have a business website (43%) while establishing businesses were more likely to use social media (44%). Operators in established businesses were least likely to have a business website (28%), and least likely to use social media (23%). Established businesses were more likely to not have an online presence (64%).

Age group – greatest and least overall cloud, website and social media usage In terms of generations, business operators in Generation Y were unsurprisingly savvier when it came to cloud computing usage (34%), and using social media for business (47%). Baby Boomers were least likely to use cloud (7%) and operators aged 65+ years were least likely to use social media (19%). Generation X operators had the highest proportion of business website users (44%), while Baby Boomers and those aged 65+ years had the lowest proportion (33% each). The latter age group was more likely to not have an online presence (62%).

Business size – greatest and least overall cloud, website and social media usage Business operators in medium-sized businesses were more likely to have a business website (75%), use social media (57%) and to use cloud computing (20%). Sole traders had the lowest proportion with a business website (31%) and small business operators had the lowest proportion of social media users (30%). Micro businesses had the lowest proportion of cloud users (11%), while sole traders were more likely to not have an online presence (55%).

For MYOB product information, research results, business tips, discussions, client service and more visit the MYOB Australia website, or its The Pulse Blog, LinkedIn, Twitter, Facebook and YouTube.

Download:  MYOB Business Monitor - State Of The Digital Nation Infographic 2013 (JPG 3MB)

-ENDS-

For further comment or to arrange an interview please contact:

Kristy Sheppard

MYOB Public Relations & Corporate Affairs Manager

P: 02 9089 9068 / M: 0407 450 860 /

E: kristy.sheppard@myob.com

Symon Madry

Haystac Public Affairs Account Director

P: 02 8094 7779 / M: 0409 919 508 /

E: myob@haystac.com.au

About the MYOB Business Monitor

Established in 2004, the MYOB Business Monitor is a national survey of small and medium business owners and managers, commissioned to independent market research firm Colmar Brunton. The most recent study ran in July and August 2013, surveying 1,022 operators from sole traders to mid-sized companies, representing the major industry sectors. The Monitor researches business performance and attitudes around areas such as profitability, cash flow, pipeline work, technology usage and government. Note: the weighting of MYOB client and non-client respondents is reflective of overall market proportions. This media release details the survey findings for the 300 importers and exporters in the respondent pool.

About MYOB Australia

Established in 1991, MYOB is Australia's largest business management solutions provider. It makes life easier for approx. 1.2 million businesses across Australia and New Zealand, by simplifying accounting, payroll, tax, practice management, CRM, websites, job costing, inventory and more. MYOB provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and now spends more than AU$30 million annually on research and development. In 2013, MYOB expanded its offerings with the acquisition of accounting solutions provider BankLink. For more information, visit myob.com.au.