Technological Transformations: Lockdown Prompts SME Technology Plans

Business experiences during New Zealand’s COVID-19 lockdown period have transformed the way New Zealand’s SMEs plan to use technology, according to a new nationwide survey.

The latest MYOB Tech Survey highlighted that local SMEs are now more open to adopting new technology, not only as a way to stay connected with both staff and customers, but to also allow them to adapt in a changing business environment.

Insights revealed that 61% of SME operators are now likely to look at new opportunities to use technology in their business. Larger businesses (50+ employees) are the most likely to be considering the adoption of new technology (84%), as are SMEs in the retail and hospitality sector (71%), and those in the manufacturing and wholesale (67%) and professional services industries (64%).

Construction and trades businesses, which were the least likely to be able to work from home during the lockdown, are less likely to be considering the use of new technology as a result (33%).

MYOB NZ Country Manager, Ingrid Cronin-Knight, says the experience of lockdown rapidly accelerated the use of technology for many New Zealand SMEs, with the need to share and store information and communicate with staff and customers.

“SMEs in all corners of Aotearoa have seen more opportunities open up because of the adoption of technology during lockdown - from essential communication, to new ways of accessing markets through the e-commerce. As a result of the lockdown businesses have taken significant steps towards operating in a digital future.”

“Just a few years ago, many local businesses would not have been equipped to make the shift to remote working or operating online. Now, more SME decision-makers are interested in looking at the new opportunities technology will provide for their business – including flexibility.”

Shift to e-commerce

The lockdown saw a steady increase in the number of SMEs selling directly online. Although almost a third (31%) of SME operators surveyed said their business already used an e-commerce website, 15% set one up for the first-time during lockdown.

Of those who established an e-commerce site during lockdown, the largest growth was seen in the agribusiness sector. Over a quarter of those who set up an e-commerce site were agribusinesses (26%). Professional services businesses (20%) and manufacturing and wholesale operators (19%) also saw an increase with more SMEs in these industries adapting to sell online during lockdown.

Previous barriers to adoption

While the pandemic saw significant restrictions imposed on some business operations, local SMEs said that prior to the lockdown, cost had been the biggest barrier to adopting new technology (44%). Time to implement (25%) new technology and the need for staff training (23%) were also major impediments for SMEs, while 24% said that they’d had no previous need to adopt the technology they employed during the lockdown.

“The lockdown very much changed the priorities of local SME operators when it came to the use of technology,” says Ingrid. “The cost of any new investment will always be a factor, however while some technologies may be less cost-prohibitive than expected, it’s important that we look at ways in which we can offer more support to boost and accelerate the efforts of local SMEs to digitise.”

“Our insights established that SMEs that were able to have staff work from home, performed better than even those organisations that operated as normal through lockdown, underscoring the value of technology when it comes to productivity and expanding operational horizons.”

New ways of working

According to the survey, almost two-thirds (62%) of SMEs had staff working from home during the lockdown, 19% didn’t operate and 12% had staff working as usual. A further 7% already had staff working from home permanently.

The personal services industry (71%), the professional sector (67%) and manufacturing and wholesale businesses (67%) were amongst those most likely to have staff working from home during lockdown, while significantly fewer businesses in the agribusiness (48%) and construction and trades (36%) sectors were able to operate in this way, as expected.

Despite the prevalence of working from home, two fifths (40%) of SMEs reported minimal-to-no tech issues during the lockdown. Those that did experience problems, found communication with customers (29%) and slow internet connections for staff at home (22%) were the biggest challenges.

“Adopting new technology in such a short timeframe can be difficult, particularly when you are working in a new environment – that already comes with its own stresses, such as juggling workload and meetings alongside parenting responsibilities – but it’s great to hear that for most SMEs, there were very few technology issues to add to the challenges during the lockdown,” says Ingrid.

“What we did see, however, is that the SME sector is rapidly adopting a number of technologies that had previously seen slow growth in use over the last five years.”

While video calling became the most obvious symbol of the ‘new normal’ during lockdown (with use up from just 18% in 2019 to 78% during lockdown), large growth was also more evident in the use of a range of applications. For example, in 2015, just 1% of SMEs reported using instant messaging apps to communicate with staff, rising to 7% in 2019. During the lockdown, 35% of local businesses used instant messaging to communicate with staff.

The use of social media to communicate with customers also saw a significant rise, from 18% of businesses in 2015, and 26% in 2019, to 39% in 2020.

Technology used to support staff working remotely during lockdown

• 78% used video calling
• 36% used cloud storage
• 35% used instant messaging
• 32% used cloud applications
• 32% used collaboration tools
• 22% used cloud accounting platform

Experience transformative for SME sector

“It’s been an incredibly challenging experience for businesses right across the country, and few will emerge without feeling a significant impact from the crisis,” says Ingrid.

“But New Zealand SMEs will be more resilient, more adaptable and more capable of facing new crises as a result of their experiences, and in particular the massive uptake of a range of new technology. Digitising their operations has helped them communicate with staff, connect with customers and reach new markets as never before – strengthening the position of our economy for new growth and a sustained rebound when the upswing arrives.

“What’s imperative now is that we all look at what part we can play to help remove some of the barriers they’re facing, continue this momentum and set them up for success – that includes buying local and supporting their e-commerce efforts where possible. As we’ve seen, even small technological changes can have a huge impact.”

In partnership with AUT, MYOB will be discussing “How Coronavirus transformed our use of technology (and what that means for the future)” along with a panel of experts as part of Techweek 2020 on Thursday 30th July. For more information and details visit TechWeek 2020.

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