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Australian SMBs seek global gains

Research shows Aussie SMBs increasingly going head to head with larger, global players

Sydney, Australia - Over half of Australian small and midsize businesses (SMBs) expect to reap a much larger portion of their revenues from overseas in the next three years, putting them up against larger, multinational corporations for emerging-market opportunities.

In order to compete internationally, business transformation and investment in technology are set to be the key growth drivers for Australian SMBs with 65 per cent having recently completed, in the process of, or about to begin significant business transformation. These findings are according to a recent report by the Oxford Economics research program, sponsored by SAP.

With only nine per cent of SMBs anticipating to operate in their home country alone by the end of 2015, SMBs are looking to capitalise on growth opportunities presented by expanding markets. This figure is down from 24 per cent today. According to the results, by 2016 the number of Australian SMBs generating between 21 to 40 per cent of their revenue from overseas will rise to 54 per cent, a pace well above the global average of 36 per cent.

Jeanette Corley, COO for Grifols Australia said, "Realistically for any business small or large but particularly for small, you’ll get to a size where the Australian market is just not enough to substantiate what you’re doing."

"Technology now makes it possible to sell a business or sell a product or a service out of Australia much easier than in the past. However to enable this, the scalability and flexibility of your technology solutions are vital. Working with partners such as SAP we have been able to fit our technology to our business. That on its own was probably the single biggest enabler for us."

"What surprised me the most from the research, was how much Australian businesses are planning to go off shore for the next round of growth opportunities," said Ray Kloss, head of marketing for SAP ANZ. "Companies need to address their technology systems due to an increasing number of competitors who are using mobility, cloud, analytics and big data to take market share."

According to the SMBs surveyed, investments in technology are expected to rise significantly with the largest growth area to be in business analytics, with 48 per cent of SMBs using it now and 66 per cent expecting to use it by the end of 2016. However, determining the right mix of investments is seen as the key challenge of transformation, cited by 45 per cent of respondents.



Other key research highlights include:

  • While 20% of Australian SMBs generate no revenue outside the country today, this figure falls to 7% over the next three years

  • In addition to increased international competition, Australian SMBs’ primary concerns include economic uncertainty (47 per cent) and increasing labour costs (36 per cent)

  • Other top priorities include expanding their product and service offerings (48 per cent), driving innovation and cost reduction (45 per cent) and strengthening their customer relationships (32 per cent).

  • Fifty four per cent of companies have business management software in use today, while 67 per cent expect to have it by 2016

  • Forty per cent have deployed mobile solutions and 51 percent expect to do so in the next three years

  • Social media technologies are expected to increase from 46 per cent to 57 per cent

  • Cloud computing technologies are expected to increase from 30 per cent to 44 per cent

About the survey
This research program is based on an online survey conducted in April 2013 with 100 Australian SMBs. Industries represented include discrete manufacturing (14 percent), professional services (24 percent), consumer products (14 percent), retail (19 percent), and wholesale (16 percent). More than half (51%) of respondents were C-level executives, with 21% CIOs/ head of IT and 12% CFOs. 55% of firms have been in business at least seven years; 14% have been operating for fewer than three years. Almost one-third (30%) have revenues of $20m–$99m; 51% had revenues between $100m and $249m.

About Oxford Economics
Oxford Economics was founded in 1981 as a commercial venture with Oxford University’s business college to provide economic advice and forecasts to international organizations. Since then, it has become one of the world’s foremost independent global economic firms, producing forecasts, analysis, and data on 190 countries and regions, 100 industries, and 2,600 sub-regions and cities. Its team includes over 80 professional economists, industry analysts, and management experts.

Oxford Economics specializes in global quantitative analysis, and business and public-policy advice. The firm offers a sophisticated portfolio of forecasting services, consisting of regular reports, databases, and models on countries, cities, and industries. Oxford Economics is renowned for its evidence-based consulting and thought leadership services, including economic impact studies, scenario analysis, business modeling, risk assessment, market sizing, executive surveys, white papers, and public-sector analysis. The firm is distinguished by the quality of its quantitative analysis, caliber of its staff, and close links with Oxford University. For more information, visit www.oxfordeconomics.com.

About SAP
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 238,000 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.

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