By
January 17, 2022
It’s common knowledge the New Zealand economy is made up mainly of small businesses with latest research confirming that with 90% of those surveyed employing 5 or less people.
The report by Better for Business also confirmed the diversity of our SME economy, with the exception of real estate accounting for 20% of total SMEs, there was no clear skews to any industries in particular.
While the revenue these SMEs generate may not be in the same league as large, listed companies, if we’re to improve our productivity as a nation, it’s clearly in our best interests as a nation to get our all our businesses operating more efficiently.
To do that requires a greater use of digital, tools and cloud-based apps and services.
Because at the moment, according to the survey, small businesses “move to the Cloud” is currently mainly limited to video call services and running finances through Xero, MYOB or another accounting platform.
But when it comes to collaboration (39%) payroll (39%) and inventory management (20%) there’s still plenty of businesses yet to harness the opportunity Cloud services provide.
And it’s not just about the Cloud either, alarmingly 49% of businesses surveyed didn’t actually have an online presence.
With less than half of the businesses surveyed believing they would benefit from greater digitalisation, what is feeding these attitudes and what can be done about it?
Security concerns
Of the businesses surveyed in the report 32% agreed concerns about information fraud and security was holding them back from becoming more reliant on digital tools.
It’s not that surprising given similar findings in other reports and some high profile cases of hacking and cybersecurity issues this year, may lead small business owners to ask “If the NZX and NIWA can get caught, what hope have the rest of us got?”
The reality is though those cases were very complex situations and for everyday business use, nearly all Cloud apps use secure, encrypted connections. That means data is encrypted on a computer before it's sent to the server – and also when it comes back again, so that nobody can listen in to what's being sent or received.
Xero and the New Zealand Law Society have some good information about this and there’s loads of advice from other sources too.
Lack of expertise
For some businesses, applying a digital lens to their operations, systems and processes can seem a little daunting. Phrases like “but I’m not very tech savvy”, “I’m not very good with IT stuff” or even attitudinal comments like “why change a system that’s worked for me and earned us good money for xx years” are all too common.
The report confirming this with 27% of businesses agreeing a lack of skills was holding them back from embarking any further on a digital transformation.
The fact is though, there are hundreds of IT one man/woman bands out there who help out small businesses all the time. A good place to start is the industry association IT Professionals.
There’s also plenty of training options on the platforms themselves for business owners to step themselves through the set-up of these Cloud based services.
Cost
Compared to other back-office costs such as printing, stationery etc, Cloud services or apps are relatively cost effective.
They work like a monthly subscription service like paying for Netflix or NZ Herald and can range from apps that are free to use to ones that cost up to $40 a month.
Given the productivity and efficiency gains they offer, it’s very good value really.
This website offers a great guide about cost for Cloud based services.
Poor connectivity / slow internet
A quarter of the businesses surveyed in the Better for Business Report said that bad internet was a barrier to them getting digital tools and Cloud services to help run their business
This, for us at Chorus, is a particularly concerning statistic. Given the world class broadband we now have in New Zealand with the recent rollout of fibre to over 85% of homes and businesses, poor connectivity can easily be overcome in most instances.
If you’re using a reasonable amount of data which most businesses are and are looking for consistent speeds any time of day, which most businesses are, getting fibre broadband is a no brainer. But that’s just the start as its worth considering a business fibre connection. These are broadband services Chorus designed specifically for business use with symmetrical speeds for both download and upload and wrap around services such as prioritised internet traffic.
Costing not much more than standard residential fibre connections you can learn more about business fibre here.
The Better for Business “Digital adoption, capability and adaptability” report offers a good benchmark for how we’re tracking in getting businesses to become more digital. With research showing Kiwi businesses on average, are about one-third less productive than international firms in the same industry, it’s clear we need to do more.
So if you’re a business owner, why not make the most of the fantastic connectivity we have available in New Zealand now and check out Digital Boost to see what you can do to accelerate your digital transformation.