Australian SMEs acknowledge further effort is required for improved operational efficiency: report
Ninety per cent of micro businesses in Australia are running efficiently, but only 54 per cent of organisations with six to 20 people feel the same way about operational efficiency, according to global manufacturer of business printers and multifunction devices, OKI Data Australia.
In its inaugural OKI Australia SME Business Efficiency survey, it indicated organisations struggle to maintain operational efficiencies and cost effectiveness as they grow.
It found that while a micro business can keep an effective lid on expenses, larger firms face higher charges for everything from staff costs and office space rental to electricity and technology. It also becomes more difficult to remain as efficient when growing into a larger operation.
The survey incorporated responses from 500 SMEs across the country. Of the sample, 57 per cent were micro businesses (one to five people) while a further 23 per cent had between six and 20 people. The remaining respondents had between 20 and 200 people in their businesses.
OKI Data Australia A/NZ marketing manager, Antonio Leone, claimed the survey has provided an interesting view into the efficiency levels within SMEs of various sizes.
The surveyed firms were also asked to nominate their key costs of doing business relative to the benefits that they received from that spending. Items considered to deliver the best return included supply chain operations and marketing and advertising activities.
At the same time, respondents nominated staffing costs and information technology as among those areas in which returns were not as effective. While the staffing cost issue might be addressed through a push for changes to penalty rates (particularly in retain and hospitality), the issue of return on IT investment may require a longer-term approach.
"The survey results clearly show that many Australian SMEs are looking for ways to make more efficient and effective use of their IT investments," Leone said.
"As an example, of those who said they were operating effectively, 62 per cent said they made the acquisition of reliable technology and extended warranties a priority. Those that did not see themselves operating efficiently did not make these factors a priority."
Of those organisations that have undertaken cost optimisation projects, the targets for that optimisation have been varied. Of those surveyed, 29 per cent said they had realised efficiencies through reviewing their spending on advertising, 26 per cent on IT procurement and 24 per cent on IT maintenance.
Of the firms undertaking such projects, almost 75 per cent reported they had been able to reduce overall expenditure by at least six per cent while a quarter said they have managed to save more than 15 per cent of total expenditure.
Leone added the results were encouraging and clearly showed that most Australian SMEs were continuing to proactively look for way to boost their cost efficiencies.
"The survey shows that, when it comes to improving efficiencies, Australian SMEs are really only just getting started. Of the survey respondents, more than 75 per cent said they believe there is even more room for improvement," Leone said.
