Australian businesses risk falling further behind their Asia-Pacific counterparts if they do not embrace suitable digital strategies and new technologies such as artificial intelligence (AI) as soon as possible.
CPA Australia’s 2024 Business Technology Report found that only 53% of Australian businesses have a digital strategy, compared to 69% of businesses based outside of Australia, including Mainland China, Hong Kong, Vietnam, Singapore and Malaysia.
Businesses that have such a digital strategy are much more likely to report their profit is increasing. Nearly seven in 10 (69%) businesses with such a strategy reported their profitability increased in their most recent financial year. Of those that didn’t have a digital strategy, only 35%t reported increased profitability.
The survey of 1,060 accounting and finance professionals also found that Australian businesses trail their Asia-Pacific counterparts when it comes to the uptake of AI. Just 22% of Australian businesses have adopted AI to a moderate to significant extent, compared with 41% across the other markets surveyed. One in three Aussie businesses (34%) said they have never used AI, compared to just 22% across the Asia-Pacific.
The survey also found that businesses that increased their investment in new technologies are more likely to report improved profits. For example, of the businesses using AI, 76% said their profitability increased last financial year, compared to 34% that didn’t use AI.
Commenting on this, CPA Australia’s business investment and international lead, Gavan Ord, said: “The research demonstrates the importance of new technology to business success. Companies that embrace a range of new technologies are observably more likely to be profitable and efficient. It’s crucial for Australian businesses to embrace technologies that are appropriate for them as quickly as possible to ensure they keep pace in a tough business environment.
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By GlobalData“While the number of Australian businesses using AI grows, it’s not yet a day-to-day tool for most. However, local businesses are clearly behind the game in exploring ways to use AI to improve their efficiency and overall performance. Embracing technologies – and finding out what they can and can’t do for your business – is crucial. AI won’t work for every business, but it could prove revolutionary for some.”
While Australian businesses trail their Asia-Pacific counterparts in AI adoption and having digital strategies, they perform well when it comes to cybersecurity and data protection.
More than two-thirds of Australian respondents (68%) listed increased cybersecurity protection as their company’s top technology initiatives in the last year, compared to 51% from the other markets. More than half (54%) of Aussie survey respondents also declared their company’s cybersecurity proficiency to be above average or better, compared to 48% from the other markets.
Meanwhile three-quarters (76%) of Australian respondents said their business places a very high level of importance on ensuring the accuracy, security and privacy of the financial data they hold. This compares to 64% from the other Asia-Pacific markets.
However, Australian businesses were found to be less concerned with using technology to help with certain ESG initiatives. Just 11% of Aussie businesses use technology to monitor their energy usage, waste and emissions, compared to 18% from across the Asia-Pacific. Similarly, just 10% of local businesses use technology to assist them with sustainability performance reporting, but across other markets in the Asia-Pacific the number rises to 31%. And only 9% of Australian businesses use technology to identify sustainability-related risks and opportunities, compared to 33% from the Asia-Pacific.
Ord concluded: “Australian businesses can learn a lot from their Asia-Pacific counterparts. Being open to new technologies and new ways of operating is crucial to the success of any business. If you stand still for too long, the world can quickly pass you by – especially when it comes to technology.”
