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Australian SMEs striving for improved operational efficiency

By Shannon Williams, Wed 9 Sep 2015
FYI, this story is more than a year old

Australian small and medium sized enterprises require more effort when it comes to operational efficiency, according to OKI Data Australia.

The manufacturer of business printers and multifunction devices says that while three quarters of Australian SMEs believe their businesses are being run efficiently, they are still striving for improved operational efficiency.

The company has releases its inaugural OKI Australia SME Business Efficiency Survey, which aims to provide a unique insight into how Australian SMEs are working to make themselves more lean and cost efficient.

Of the surveyed group, 45% said they had recently undertaken efficiency initiatives while a further 23% indicated they were planning to do so soon.

Conducted last month, the survey incorporates responses from 500 SMEs across Australia. Of the sample, 57% were micro businesses (one to five people) while a further 23% had between six and 20 people. The remaining respondents had between 20 and 200 people in their businesses.

"This survey has provided an interesting view into the efficiency levels within SMEs of various sizes," says Antonio Leone, marketing manager ANZ, OKI Data Australia.

“When it comes to micro businesses, an impressive 90% said they felt they were running efficiently. However this dropped to 54% for organisations of between six and 20 people,” he says.

Leone says the survey results indicate that organisations struggle to maintain operational efficiencies and cost effectiveness as they grow.

“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,” he says. “It also becomes more difficult to remain as efficient when growing into a larger operation.”

The surveyed firms were 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, Leone explains.

"The survey results clearly show that many Australian SMEs are looking for ways to make more efficient and effective use of their IT investments," he says.

"As an example, of those who said they were operating effectively, 62% 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% said they had realised efficiencies through reviewing their spending on advertising, 26% on IT procurement and 24% on IT maintenance.

Of the firms undertaking such projects, almost 75% reported they had been able to reduce overall expenditure by at least 6% while a quarter (25%) said they have managed to save more than 15% of total expenditure.

"The survey shows that, when it comes to improving efficiencies, Australian SMEs are really only just getting started," says Leone. "Of the survey respondents, more than 75% said they believe there is even more room for improvement."

Leone says the results are encouraging and clearly show that most Australian SMEs were continuing to proactively look for way to boost their cost efficiencies.

"I look forward to comparing these results with future surveys to see the ways in which these initiatives help to build the Australian economy,” he says. 

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