A new study has found that Australian businesses are better set up to be resilient than the rest of the world regarding major disruptions. Seven in ten (70%) of businesses in Australia say they have effective plans to respond quickly to incidents like severe weather, geopolitical conflicts, or cyberattacks, compared to 65% of global respondents.
Yet, Australian businesses still have work to do to boost resiliency when it comes to more strategic challenges, trailing the rest of the world in effective planning for talent shortages, transport disruptions, unexpected market events, or supply chain issues.
This planning is critical given labour and skill shortages are Australian businesses' number one risk to growth in the next year (56%), higher than the global average of 40%. The following most significant risks include economic volatility (52%), cyberattacks (45%), and supply chain disruption (44%).
New research released by SAP Insights revealed these insights, surveying 4,239 organisations, including 329 in Australia.
The research findings are no surprise to the Australian energy network business, AusNet, which uses SAP to streamline its HR operations, improve compliance, and drive a better employee experience.
In 2022, AusNet identified the need to improve its existing HR processes by consolidating multiple systems into one, minimising manual intervention and workarounds, and reducing the time it takes to complete HR tasks for employees and managers.
In partnership with IBM, AusNet implemented SAP SuccessFactors, which has enabled it to standardise its business processes, consolidate employee and manager processes with fewer touchpoints, and leverage real-time employee insights in employee attendance and turnover to drive continuous workforce improvement.
“We wanted to modernise the employee experience and knew we needed a system that would integrate existing siloed systems across the business into a one stop shop for our employees and leaders,” says Bernie Repacholi, head of people systems and enablement at AusNet.
“We worked in close partnership with IBM to co-create a solution, underpinned by SAP SuccessFactors, that would simplify how our employees interact with us and drive improved productivity among our teams.”
“By using SAP, we're now able to future-proof processes when changes in policy or legislation occurs. This supports ongoing compliance and governance, and allows us to focus efforts on initiatives that directly support our people," she adds.
While labour and skills shortages were identified as the most significant risk to their future, Australian businesses are confident in their current ability to manage their people.
Six in ten (60%) of Australian businesses are extremely or very satisfied with their ability to develop skills across their workforce. In comparison, 56% were extremely or very satisfied with optimising their workforce, such as boosting productivity and ensuring people have the right skills for their roles. That confidence was underpinned by having effective plans to manage staffing to deal with shortages (59%) and having the right processes to prepare employees to adapt to new or different roles (72%).
“The research establishes a strong link to the resilience of your business and the resilience of your people. We are living in a world demanding new solutions and opportunities to solve for these problems. This study should act as a wake-up call to organisations across Australia that we have to continue to invest in our people to foster curious cultures that support the exploration of ideas and new thinking that when applied to big data and technology, not only safeguards their businesses but enables future growth,” says Damien Bueno, president and managing director of SAP Australia and New Zealand.
But there’s still more to be done.
40% of Australian organisations noted that they had to address skills shortages to be more responsive to change, far ahead of the global average (30%). A third (33%) agreed they also needed to address labour shortages.
Australian organisations are planning to empower their people with technology. Four in ten (40%) businesses say the most significant opportunity for their growth is using intelligent technology to drive decision-making, and 78% believe they have the correct data to plan for the future.
But despite those encouraging numbers, 42% of respondents said they need to address technology improvement to be more responsive to change. Part of this may be due to entrenched attitudes and ways of doing things. The most significant barrier to innovation in Australia was difficulty letting go of current products, services, and business models.
“Being able to react quickly to change across your whole organisation is critical to future success. Australia trails the rest of the world when it comes to the flexibility of our business processes. This is where consistent, integrated innovation platforms can bring your whole value chain together to create strong business outcomes,” adds Bueno.
That may be why Australian businesses invest in technology to boost their resiliency. The most important innovations for resiliency are automated business networks (61% vs 55% globally) and cybersecurity (58% vs 50% globally), followed by employee collaboration and experience management software.
Interestingly, Australian organisations rate AI and machine learning as less important to their future resiliency (36%) compared to the rest of the world (41%).
“While AI is in its nascent stages right now, business AI can help companies predict, prepare, and perform when it comes to responding to rapidly evolving demands. At SAP, we’ve recently built AI into the systems that power the most critical business processes to discover exceptional insights and efficiencies. That helps future-proof your business by bringing together people, innovation, and core business processes,” Bueno concludes.