18 Mar Does the Future of Australian SMBs Rely on Digital Transformation?
Hilditch, an international base oil, speciality chemicals, and fuel trading and domestic supply company, is one of many small and medium-sized businesses (SMBs) to have undertaken serious digital transformation during this time of global change. With the right tech partners, Hilditch has revolutionised its e-invoicing system and changed its business. Now that it has a strong foundation in place, its digital ecosystem is set to thrive.
Here’s what the experts have to say about why this is a successful model for businesses of every size.
Don’t Let Fear of Change Hinder Progress
Max Carter – change manager, Hilditch
Hilditch has been around for decades, and its success has been attributed to being able to naturally evolve and build systems and processes as it goes. It was no surprise, then, that the biggest barrier to change was the change itself, and the fear of change – a common fear across many organisations. Our vision was to be able to expand the business and tackle new commercial opportunities, but when looking at the technology that we had in place, it just wasn’t going to cut it.
The industry we work in is nuanced and fluctuates, with big lead times. Because of that, we had a bespoke ERP [enterprise resource planning] platform. It was fit for purpose, but it wasn’t fit for scale. We were manually producing invoices through the existing ERP, which were then being double handled by an accounting package. There were glaringly obvious efficiencies that could be made. We implemented e-invoicing and saw tangible improvements immediately. We’ve reduced our human error, our customer communication has improved and cashflow has increased.
Technology is not scary. It should be viewed as an enabler. For businesses that are also looking to make transformations, the most important thing is to fundamentally understand your vision for your business and appreciate how technology can enable you to get there. The key is to find a partner that can understand the challenges and hurdles and be able to coach or guide you through that change.
We’ve now opened the door to other digital possibilities. SAP has been an enabler as a foundation, and we now have so many different integrations and further enhancements that we can build on.
E-invoicing Is a Significant Stepping Stone to Future Digitisation
Chris Peck – executive general manager, public services Australia, SAP
SMBs are the largest job contributors in the Australian economy. If we look at increasing their capability, reach, and access, that will drive faster and more sustainable economic growth. From SAP’s perspective, 80% of our customers fit into the SMB space, and it has been a tough 18 months for those businesses. The pandemic has forced the majority of Australian SMBs to think differently in order to survive and we saw many of them taking the opportunity during Covid to accelerate those digital strategies.
E-invoicing is a key step forward in improving the way Australian businesses work together. Our research found that many who took on e-invoicing immediately went to: “What can I digitise next?” That’s the role of organisations like SAP – we can look at some of the quick wins, we can demystify the fear factor, and show the facts around what it takes to implement or onboard some of these technologies.
Many that have made the switch now realise the benefit of digitisation and are looking at other processes to lift their capability across the board. We’re seeing that nearly 50% of SMBs that went digital with e-invoicing are now looking at other areas in which to digitise, for example in payroll, forecasting, debt collection, and customer experience.
Although SMBs move into the realm of digitisation with a little bit of fear and trepidation – that’s the biggest challenge – our research found that 88% of the SMBs that made the jump said it was really easy in the end.
Digitally Ready SMBs Will Continue to Be the Backbone of Post-pandemic Australia
Bruce Billson, Australian small business and family enterprise ombudsman
Small businesses are a big deal in the Australian economy. About a third of the GDP of Australia comes from small business and just under half the private sector workforce gains its livelihoods through small business. There are 2.3m small businesses, making up 97% of all corporate entities operating in Australia.
Covid has presented new challenges, and small businesses are exceptionally talented at problem-solving, which has meant those new challenges and the solutions have provided new business opportunities. Digital engagement has been so important at this time. Many businesses that have navigated Covid well have found new ways of delighting customers and better ways of running their businesses because of a deeper engagement with digital tools.
Covid has been catalytic. It has accelerated people’s uptake of digital technologies. We’ve seen new ways of delighting customers, but some of the tools have been really helpful in streamlining the efficiency of running the business. That deeper digital engagement has also seen a greater interest in the digital space, cybersecurity, and how you can tap into resources that are there, and the ambitions around equipping the economy to be more digitally enabled.
One of those ways is around e-invoicing – being able to transfer your invoices through a digital platform. It’s a real part of the government’s digital agenda, to drive the economy in a more digitally enabled way, and that’s going to deliver benefits for the economy and for the businesses that are participating in it.
There’s been some terrific research commissioned by SAP that points to, for small and medium businesses, savings that can add up to tens of thousands of dollars over the course of the year. For a time-poor small business, those efficiency savings in time and cost, certainty and predictability, and the ability to be paid sooner mean it’s in everybody’s interest to get on board.