26 August 2024
Failure to embrace new tech is holding Australian businesses back
- Australian businesses trail their Asia-Pacific counterparts in AI adoption
- Focus on cybersecurity and data protection a positive for Aussie businesses
- CPA Australia urges Aussie businesses to develop digital strategies focused on improving productivity and the customer experience as quick as possible.
Australian businesses risk falling further behind their Asia-Pacific counterparts if they do not embrace suitable digital strategies and new technologies such as artificial intelligence (AI) as soon as possible.
CPA Australia’s 2024 Business Technology Report found that only 53 per cent of Australian businesses have a digital strategy, compared to 69 per cent of businesses based outside of Australia, including Mainland China, Hong Kong, Vietnam, Singapore and Malaysia.
Businesses that have such a digital strategy are much more likely to report their profit is increasing. Nearly seven in 10 businesses (69 per cent) with such a strategy reported their profitability increased in their most recent financial year. Of those that didn’t have such a strategy, only 35 per cent reported increased profitability.
The survey of 1,060 accounting and finance professionals also found that Australian businesses trail their Asia-Pacific counterparts when it comes to the uptake of AI. Just 22 per cent of Australian businesses have adopted AI to a moderate to significant extent, compared with 41 per cent across the other markets surveyed. One in three Aussie businesses (34 per cent) said they have never used AI, compared to just 22 per cent across the Asia-Pacific.
The survey also found that businesses that increased their investment in new technologies are more likely to report improved profits. For example, of the businesses using AI, 76 per cent said their profitability increased last financial year, compared to 34 per cent that didn’t use AI.
“The research demonstrates the importance of new technology to business success,” said CPA Australia’s Business Investment Lead, Gavan Ord. “Companies that embrace a range of new technologies are observably more likely to be profitable and efficient. It’s crucial for Australian businesses to embrace technologies that are appropriate for them as quickly as possible to ensure they keep pace in a tough business environment.
“While the number of Australian businesses using AI grows, it’s not yet a day-to-day tool for most. However, local businesses are clearly behind the game in exploring ways to use AI to improve their efficiency and overall performance. Embracing technologies – and finding out what they can and can’t do for your business – is crucial. AI won’t work for every business, but it could prove revolutionary for some.”
While Australian businesses trail their Asia-Pacific counterparts in AI adoption and having digital strategies, they perform well when it comes to cybersecurity and data protection.
More than two-thirds of Australian respondents (68 per cent) listed increased cybersecurity protection as their company’s top technology initiatives in the last year, compared to 51 per cent from the other markets. More than half (54 per cent) of Aussie survey respondents also declared their company’s cybersecurity proficiency to be above average or better, compared to 48 per cent from the other markets.
Meanwhile three-quarters (76 per cent) of Australian respondents said their business places a very high level of importance on ensuring the accuracy, security and privacy of the financial data they hold. This compares to 64 per cent from the other Asia-Pacific markets.
However, Australian businesses were found to be less concerned with using technology to help with certain ESG initiatives. Just 11 per cent of Aussie businesses use technology to monitor their energy usage, waste and emissions, compared to 18 per cent from across the Asia-Pacific. Similarly, just 10 per cent of local businesses use technology to assist them with sustainability performance reporting, but across other markets in the Asia-Pacific the number rises to 31 per cent. And only 9 per cent of Australian businesses use technology to identify sustainability-related risks and opportunities, compared to 33 per cent from the Asia-Pacific.
“Australian businesses can learn a lot from their Asia-Pacific counterparts,” added Mr Ord. “Being open to new technologies and new ways of operating is crucial to the success of any business. If you stand still for too long, the world can quickly pass you by – especially when it comes to technology.”
CPA Australia’s recommendations for Australian businesses:
- Develop and implement a digital strategy focused on improving productivity and the customer experience.
- Invest in technology that turns quality data into actionable insights, such as AI and data analytics software.
- Consider technology that can be used to meet sustainability goals, including technology that assists with ESG compliance.
- Identify opportunities to enhance operational efficiency, lower costs and/or improve the customer experience through AI.
- Prioritise and regularly review technology for its return on investment, relevance and effectiveness rather than following the hype cycle of new technologies.
About us:
About CPA Australia
CPA Australia is Australia’s leading professional accounting body and one of the largest in the world. We have more than 173,000 members in over 100 countries and regions. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
Contact details:
Simon Downes, External Affairs Lead, simon.downes@cpaaustralia.com.au or 0401 461 503
