Staying ahead in a competitive landscape
The cost of doing business in Australia is constantly rising. Factors such as taxation, geography, markets and commercial decisions all contribute to one of the toughest environments to do business, especially for Australian SMBs.
The Australian Government’s Relative Cost of Doing Business Study 2014 stated that there are some costs that are heavily influenced by government regulations such as those affecting trading hours, the supply of retail space, workplace relations, transportation and delivery of goods, utility charges and liquor licensing. These factors make the Australian market a much more costly place to do business than the US or UK.
The report found the retail sector contributes almost 5 per cent to Australia’s GDP and 9 per cent to total hours worked in the economy.
“Whether based in Australia or elsewhere, retailing is going through a major structural evolution. Various social, economic and demographic factors are affecting what consumers buy, where they buy, and how much they are willing to pay. Further, the uptake of e-commerce is providing consumers with the option to search for, compare and/or purchase goods from anywhere in Australia or internationally at their convenience,” the report said.
This situation is just as difficult for partners selling solutions to these businesses as it is for the retailers themselves. A customer's ability to acquire new capability through technological deployments is directly dependant on the success of their business.
The cost of doing business is a far more broad concern than for retailers. The reality is all local small businesses need to grapple with the challenge of dealing with high costs of real estate, tax and regulation, as well as a challenging jobs market for skilled experts and an escalating power bill.
Unfortunately for those on the front line and those attempting to equip them with the tools to succeed, there is not a lot of research that has gone into understanding the efficiency pain points of our local businesses.
In many cases, the challenges around costs are assumed, as detailed above, and so OKI Data has commissioned its first SME Business Efficiency Survey to better understand the depth and breadth of efficiency challenges that small businesses face in the local market, and further how these businesses are addressing the challenge.
Engine to our economy
OKI Data sales manager oceanic region, Greg Mikaelian, described the SMB and SME markets as both substantial and diverse.
“In many respects, they are the engine room of our economy,” he added.
The OKI study is not only designed to help small business gain a better understanding of the market in which it operates, but also to help channel partners better serve their customers through an increased understanding of the landscape.
The research found that while it would seem that while Australia’s SMEs do understand the need to drive efficiencies within their business, the market, as a whole, has a fair way to go on that particular journey.
According to the findings, most Australian SMEs – especially the smallest of businesses – believe that they are currently running lean, efficient businesses. Many reported they had recently undertaken efficiency initiatives and the impact that these initiatives have had has been mixed, but generally quite positive. In excess of one quarter of organisations that have undertaken an efficiency initiative having reported savings of at least 15 per cent on previous expenditure.
That money that has been saved has been largely filtered back into the organisation’s savings, improving their liquidity and bank balances. However, others are seeing it as an opportunity to reinvest into the business.
Mikaelian said that as a result of the study and other market analysis the company had conducted, OKI has identified the real estate, legal, construction, and graphic arts industries as key areas for partners to attack.
“Our products are designed, engineered and aimed for use in environments where output quality, performance and reliability are paramount,” he said.
“Further, we have products in our range that are suited for specialist verticals, complemented by software solutions to aid productivity and workflow.
He went on to explain that the partner community was vital to the wider success of the Australian SMB and SME sectors as a whole due to the community’s unique position and thus understanding of the needs of these businesses.
“The sophistication of a total solution that includes service and repair capabilities, is best offered by a B2B channel.”
One of the most significant findings in the report was evidence of a drive to push revenue back into innovation, so that the businesses can achieve greater competitive differentiation within their industries.
In spite of this, gains some businesses have enjoyed in driving efficiency through their operation, many Australian SMEs remain inefficient.
For some organisations there are regulatory hurdles and limited capital to invest that is inhibiting opportunity to undertake an efficiency initiative, but in other cases there is a lack of awareness with what opportunities there are to drive efficiencies through the business.
Mikaelian believes partners who can demonstrate the value of this type of reinvestment will add quantitative value to their customer’s businesses and as a result, their own.
Many organisations have just started their efficiency journey. Around three quarters of organisations who believe that they are already efficiently run see opportunities to drive greater efficiencies through the business yet.
Technology remains the greatest opportunity to find savings within the business. Both in terms of IT procurement and management, many of Australia’s small businesses continue to struggle to keep costs down with their expenditure into technology. Unlike other areas of their business, such as the supply chain or marketing, technology is a pure cost to the organisation, with no direct value returned to it.
“OKI offers a unique value proposition and brand promise thanks to standard three year warranty and LED technology for user peace of mind,” Mikaelian said.
“This, coupled with products that offer specialised application capabilities, and the non-existence of similar or equivalent retail products, that are more susceptible to price severe discounting, will increase channel partner profitability.”
Partnering for success
Organisations want the lowest cost of ownership of technology they can find, and for those organisations that can afford it; this means they are willing to invest in extended warranties and top-tier technology, especially when also supported by industry-leading maintenance support.
Mikaelian added that the OKI product range, channel structure and the company’s 'peace of mind' brand promise was in tune with what SMB/SME customers look for when investing in technology.
“Our channel program offers a transparent and tiered incentive system, as well as marketing support and training. In conjunction, these elements give our partners the confidence and ammunition they need to address and exceed the needs of SME/SMB customers.”
“Our partners have contributed significantly to our growth by helping us deploy more mid and high end products across various verticals. With a consultative and holistic approach when offering our products, our channel partners are able to secure opportunities that are more lucrative and longer term,” Mikaelian added.
“The benefits of our program which have supported our channel, will continue to fuel their success. Our training programs are ongoing and frequent, catering for new channel partners and staff, as well as ensuring both new and existing partners are always up to date.
He explained there were separate tiers in the program for both hardware and consumables as well as rebates paid on a quarterly basis.
“We also support our partners with store, building and vehicle signage.
“For lead generation, we also offer free trial program which is backed by a national awareness campaign across digital, out of home, social and broadcast media. Authorised partners will also be listed on our 'where to buy' online dealer locator,” he added.
For Australia’s IT industry in the SME space, value and technological superiority will be the key discussion point and opportunity in the years ahead, as the broader economy continues to pile financial pressure on our small businesses.
Mikaelian said the partner community could grow existing business models and add new revenue streams through offering technology customers could use in a variety of different ways that go beyond the traditional function of such devices.
Read more on how creativity and an office printer helped add value to CycleCraft Motorcycles’ business and empowered them to be more creative, flexible and generate incremental revenue.
Are Australian SMEs Running Efficiently?
This whitepaper outlines the depth and breadth of efficiency challenges that SMBs face in the domestic market and how they are addressing the challenge.