4 lessons from experts on digital transformation

Many small businesses feel intimidated by the idea of digital transformation, but the process need not be painful or expensive, say three enthusiastic early technology adopters from Australia and overseas.

The events of the past few months have meant that digital transformation has gone from advisable to non-negotiable. However, survey data reveals that small and medium-sized businesses in Australia perceive digital transformation as too difficult or too expensive, and lag their counterparts in Asia.This need not be the case, and early adopters of digital technology argue that the current environment presents an opportunity for ambitious change that can generate long-term returns.

By Nigel Bowen

One of the unexpected side-effects of the pandemic has been the rapid acceleration of the digital transformation journey for many businesses. However, there is great disparity between the starting points in the race to digitise between Australian small and medium-sized enterprises (SMEs) and their Asia-Pacific counterparts.

CPA Australia’s most recent Asia-Pacific Small Business Survey indicates that, pre-pandemic, SMEs in Asia were “much more likely to be undertaking activities associated with growth” than their counterparts in Australia and New Zealand. In particular, Asian SMEs were found to be much more focused on “new payment technologies, social media and improving customer satisfaction”.

In contrast, many Australian SMEs perceive investment in technology as too overwhelming, too expensive, or both. Yet this need not be the case. Three case studies of early and vigorous tech adopters, from Australia and overseas, show that investing in technology can generate returns on investment in spades.

Early adopters’ perspective

The term may only have entered the lexicon in recent years, but Murray Wyatt FCPA argues that Australian accountants have been “digitally transforming” for at least four decades. When Wyatt started at Morrows Group in 1981, he found himself elbow-deep in “microcomputers and floppy disks”. One of his first big projects involved helping a manufacturing client install a Wang Laboratories computer that automated basic bookkeeping tasks.

Wyatt, who is now the director and chairman of Morrows, believes both regulatory requirements and competitive pressures incentivise the majority of Australian firms to be early, or at least early majority, tech adopters.

“If the ATO [Australian Taxation Office] requires tax returns to be lodged electronically, then that forces even the stragglers to embrace the necessary technology,” he points out. “Even before the step change of COVID-19, firms that hadn’t embraced electronic document signing, videoconferencing and remote working were struggling to attract and retain good clients and staff,” he continues.

“Morrows switched to cloud-based platforms and software such as Microsoft 365 and Xero, and issued all our staff with Microsoft Surface Pros years ago. That meant it was business as usual when we closed the office and told our 150-strong team to work from home. Many of them will continue to work from home even after the shutdowns end.”

Wyatt argues that digital transformation has now gone from advisable to non-negotiable.

“At this juncture, any firm that isn’t adopting technology is going to end up with cost structures that render it uncompetitive,” he says.

“How is a firm renting three floors of a CBD [central business district] office building going to compete with a similar-sized firm that only rents one office in the same building and has its staff working remotely?”

Catching up just in time

Nowadays, Vickie Fan FCPA is something of a Hong Kong digital transformation celebrity. However, the star of the recent promotional video for Canon’s Therefore document management system (DMS) confesses she was late to the automation party. When Fan started her career in 1999, the only digital device she had unimpeded access to was a calculator.

Vickie Fan FCPA, managing partner of Fan, Chan & Co.

Vickie Fan FCPA, managing partner of Fan, Chan & Co.“There was a computer, but that had to be shared by many of us in the office,” she laughs. The digital transformation of Fan, Chan & Co. proceeded at a leisurely pace until 2018. That’s when Fan – by then the firm’s managing partner – went on a “SaaS splurge”.

“The firm had grown and systems that had, more or less, worked previously were breaking down,” she explains. “Take working with paper documents – the time and money chewed up in processing and storing those documents was bad enough. But what became intolerable was documents being misfiled. Even if 999 out of every 1000 documents are put in the right place, you have a major problem with that error rate once you’re dealing with tens of thousands of documents.”

In addition to Canon’s Therefore DMS, Fan has invested in Xero’s practice management software, as well as its MyWorkpapers paperless workpaper solution, all in the past 18 months. She is keeping an eye on artificial intelligence (AI) and blockchain products, but waiting until those technologies become more mature before making any buying decisions.

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