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Less than 10% of you are advanced on the tech front


Research from Deloitte shows that despite the benefits of more customers, revenue, jobs and innovation, many businesses simply do not understand the relevance of digital tools. Let's take a deeper look at the numbers and see where you're missing out. 

By John O'Mahony, Deloitte13 minute read

You’d think that taking up – or at the very least investigating – the latest and most effective digital technologies would be a given for those operating in the highly competitive small and medium business (SMB) sector.

But in spite of evidence that digital engagement can be the difference between success and treading water, almost half of all SMBs with lower levels of engagement don’t regard digital tools as relevant for their business.


What they’re missing out on, according to research Deloitte Access Economics recently completed for Google here in Australia, are significant benefits and bonuses across revenue growth, employment, export success and innovation.

Our Connected Small Businesses 2016 report, which provides an update of the findings of an earlier 2013 report, presents the concept of a four-step ‘digital ladder’ – covering basic, intermediate, high and advanced levels of digital engagement – and finds that nearly a quarter of SMBs are only operating at a basic level.

At the upper end, less than 10 per cent are operating at an advanced level, but compared to SMBs operating at a basic level these advanced businesses are:

 Five times more likely to be growing revenue;

 Eight times more likely to be creating jobs;

 Seven times more likely to be exporting;

 Fourteen times more likely to be innovating.

The ladder’s there to climb

Whether advising SMB clients or operating as SMBs themselves, accountants can certainly consider our findings. Benefits of digital engagement were found across all industries, business sizes and geographies.

For Google, we undertook a national survey of over 600 Australian SMBs and their levels of digital engagement, such as through their use of social media, e-commerce, websites, online marketing tools and data analytics. The level of business engagement was then compared with performance metrics such as revenue growth, job creation, exports and innovation to identify relationships between digital engagement and business performance.

We found that SMBs are becoming more digitally capable over time, with the average level of digital engagement having increased relative to our 2013 study. The digital landscape is certainly continuing to evolve as new technologies change existing markets, drive increased competition and shift consumer expectations. The goalposts, when it comes to being highly digitally engaged, continue to shift.

Our analysis has therefore identified a new digital engagement ladder with four levels:

 Basic (23 per cent of SMBs surveyed) – businesses that only have a business email address and use traditional methods of marketing (e.g. post, newspapers), and have no social media or website;

 Intermediate (34 per cent) – businesses that have a website and a listing on an online directory that they control. They may also be listed on an online marketplace or third-party e-commerce platform such as eBay, and use social media and basic online marketing (e.g. webpage ad banners);

 High (34 per cent) – businesses with a mobile-responsive website, which may also have e-commerce or booking capabilities. They make extensive use of social media and higher-level online marketing methods (e.g. search engine optimisation, automated email advertising);

 Advanced (9 per cent) – businesses that use data analytics to analyse customer information and inform decisions, and advanced online marketing tools such as search engine marketing, social media advertising and video advertising.

Keeping up with change a challenge

Although there are clear benefits of digital engagement for SMBs, a number of businesses also identified barriers and challenges associated with engaging with technology. Almost half of SMBs at lower levels of engagement don’t regard digital tools as relevant for their business, suggesting there is still work to be done in helping SMBs understand the value of using technology.

Other barriers to increased engagement include the perceived cost of adopting digital tools and the lack of skills to use them. In particular, a number of SMBs identified inadequate skills in both technical capabilities and in understanding how digital technologies can be applied to benefit their business as barriers to further engagement. Despite this, more than 25 per cent of these SMBs indicated that they had no plans to address their digital skills gaps.

While it can be a challenge for SMBs to keep up with digital change, ultimately, it’s important for businesses to keep improving in their use of existing and new digital tools to fully realise the benefits that new technologies and applications can offer – enabling businesses to increase accessibility, information availability and connectivity with their customers.

In the end…

Engaging with, investing in, and then keeping up with new technologies in an increasingly digital economy opens up significant opportunities for SMBs in terms of agility, competitive advantage, innovation and growth.

And understanding how Australian SMBs can effectively use digital technologies to improve their business outcomes can facilitate increased economic and jobs growth more broadly.

There can be a clear digital dividend for businesses that get this right, as well as a significant risk for those that don’t.

John O’Mahony, Access Economics partner, Deloitte

Less than 10% of you are advanced on the tech front
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