Organisations are losing one and a half days per week per employee, on manual or repetitive tasks due to ineffective digital solutions, according to a study by software provider MYOB.
For a typical mid-market business with 100 employees, this equates to a cost of more than $2.7 million per business, per year.
With just over 100 mid-market businesses employing 100 people according to the Australian Bureau of Statistics, the productivity issue has a projected cumulative impact of nearly $300 million per year to the Australian economy
The trans-Tasman online survey with 420 respondents and seven interviews – Seizing Advantage: The technology pivot ANZ businesses must make – was conducted by Forrester Research for enterprise software provider MYOB.
The Forrester study found that there are three key challenges organisations believe are standing in the way of their ability to improve their business and people management solutions – a lack of leadership support (35 per cent), business inertia to change (34 per cent), and the high cost of technology (34 per cent).
With a challenge around prioritisation from business (31 per cent) adding to this, there is an even greater need for leadership to recognise how the lack of appropriate digital solutions in their organisations are wasting employees’ time, negatively impacting sales growth, creating extra costs and leading to poor customer experience, according to MYOB’s Valantis Vais.
Vais said: “Action must come from the top, and with a third of local firms saying that a lack of prioritisation in their business was holding them back, these findings demonstrate there’s not enough leadership to drive change.
“Employees can’t follow what they can’t see, and organisations need leaders with a clear vision and a desire for action to inspire this change.”
Vais said the new insights back up a recent report from the Australian Productivity Commission which showed economic growth per person over the past decade, has slipped to its slowest rate in 60 years.
“Mid-market businesses could become the other engine room of the Australian economy.
“By tackling this productivity problem, these businesses could be helping bring down Australia’s unemployment rate, drive wages growth and boost our nation’s GDP. However, rather than grab the opportunity in front of them and gain a competitive edge, many are lagging behind their international peers and missing out on a chance to grow or improve their bottom line – mainly because they’ve let inertia take hold.”
Alongside productivity woes, the new insights show business growth and bottom line are also taking a hit.
In fact, 50 per cent of decision-makers surveyed for the study, admitted that their manual systems have held them back from taking on larger customers.
The findings also showed that mid-market businesses believe more than a quarter (28 per cent) of their extra costs are being incurred because of inefficient or ineffective business and people management solutions.
Vais said: “Having spent years working with businesses of all sizes on their digital transformation, I am amazed at the attractiveness of the commercial case for mid-market businesses to change to more modern solutions.
“Businesses that realise the true cost of using outdated solutions and capture the potential, untapped value of implementing intelligent, technology-driven solutions, are the ones most likely to grow over the coming 12 to 18 months.”
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