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A survey by the accounting software company has found that 40 per cent of SMEs that digitised more operations in the past year enhanced productivity.
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Digitisation a boon for productivity in cost-of-living crisis: MYOB
25 June 2024
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More SMEs should invest in IT systems as digitisation can help ease cost-of-living pressures for small and medium enterprises and boost productivity, according to MYOB.
The accounting software company’s bi-annual business monitor, released today, found around 40 per cent of SMEs that digitised more of their operations in the past year increased their productivity to combat economic headwinds.
But only around one in 10 respondents (11 per cent) said they planned to increase their investment in IT systems and processes in the coming year.
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“Despite the benefits it brings to the bottom line, cost remains a barrier,” general manager Emma Fawcett said.
The top investments SMEs considered were prices and margins on products and services sold (30 per cent) and the amount they paid employees (24 per cent).
“The investments reflect the environment, with SMEs looking to adjust their margins where they can. Employee numbers will hold steady for most,” Fawcett said.
External headwinds cited most frequently by the 1,000 SME owners and operators MYOB surveyed between March and April included fuel pricing (41 per cent) and the cost of utilities (38 per cent).
Interest rates also weighed on the business performance for 30 per cent of respondents, and MYOB said the average productivity rating was 6.2 out of 10.
“The nation’s 2.5+ million SMEs have shown resilience throughout the last few years, and with further difficulties anticipated as the economy stabilises it will be important to review their business productivity to ensure they are setting themselves up for security and growth,” Fawcett said.
Over one-third of SMEs surveyed believed skills and training programs would boost employee productivity.
Others also pinned their hopes on government grants to improve skills and training (31 per cent) or grants to help businesses improve access to and use of technology (29 per cent).
But Fawcett said it was important to look for internal solutions to boost output rather than solely seeking government support, with digitisation the most effective route despite the initial outlay.
“Digital capabilities are closely linked to productivity, helping SMEs save time, money and improve accuracy in their business operations, as well as drive economic growth in uncertain times,” she said.
“This challenging period is not yet over for the nation’s SMEs, so any emphasis they can put on driving productivity and boosting their performance will hold them in good stead. As contributors to 99 per cent of the nation’s GDP it will also help build a stronger economic outlook.”
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