May 27, 2020

COVID-19 effect: how businesses are rising to the digital challenge

The coronavirus pandemic is hastening the digital journey for many Australian businesses, as restrictions designed to slow the spread of the virus put paid to old ways of doing things.

Economies and societies around the world have experienced unprecedented upheaval in the months since coronavirus emerged as a global health threat. In Australia, shutdown orders and social distancing regulations have made it impossible for many businesses to operate as normal.

One result has been a digital revolution, as companies scramble to adopt technologies that allow their employees to continue working – and their customers to keep buying.

Xero Australia and Asia managing director Trent Innes says the crisis has accelerated an existing trend. The small business platform’s cloud accounting and invoicing systems are used by more than two million subscribers globally and sit at the centre of an application ecosystem designed to help companies automate and digitise their operations.

“We were already seeing digitisation all around – in companies’ banking relationships, their interactions with government and their dealings with customers and suppliers – but it was very much on a ‘nice to have’ basis,” Innes says.

“COVID-19 has changed that. For many companies, there’s been a realisation that, if they want to continue to operate and be productive, they really need to be digitally connected.”

Small businesses diving into digital

Some agile enterprises have done so on the double. They include accounting firms, legal practices and healthcare providers offering tele-consultations and real estate agents staging open homes and auctions online. One business to take a newly digital tack is Love Athletica. After gyms and fitness studios had to shut their doors in March, the Melbourne-based Pilates business began hiring out equipment and facilitating ‘at home’ classes for members.

“They’re not necessarily a natural digital match but they’ve gone in with a real growth mindset,” Innes says.

“They’ve looked for a way they can incorporate technology into what they do – providing a personalised health and wellness service – and they may end up with a better long-term business model as a result. Gyms and fitness studios are usually constrained to a fairly small geographic catchment area, but using digital technology means you can do a session anywhere.”

Many other formerly office-based businesses have raced to embrace video conferencing and messaging applications, to enable remote-working employees to communicate and collaborate on shared tasks and projects.

Transformation in the fast lane

For some business owners, the biggest challenge has been getting started, but necessity has forced them to overcome any techno-reluctance. Fortunately for today’s SMEs, digitisation is affordable and achievable, thanks to the consumerisation of technology that’s occurred over the past decade.

“If this COVID-19 crisis had happened 15 years ago, the only businesses which would have had access to video-conferencing solutions would have been large ones, with large budgets – everyone else would have been on the phone,” Innes points out.

“Today, [cooperative remote working] applications like Zoom, Teams and Slack are accessible to even the smallest of businesses and they’re very easy to use. Our digital skill levels have risen dramatically and, if you can use an iPhone, you’re going to be able to use these tools.”

In this COVID-19 environment, many IT vendors have established information hubs for SMEs that need help migrating to remote working, while the Australian Information Industry Association’s newly launched Business Continuity portal is a free, one-stop shop offering services, advice and tools.

What will the future bring?

NAB Business Direct and Small Business Customer Executive Ana Marinkovic says SMEs that embrace digital technologies during the current crisis may find doing so serves them well in the longer term.

“None of us have experienced times like these – but we have experienced hard times in the past,” Marinkovic says. “Challenging conditions have historically resulted in new opportunities for small businesses which are able to find a way through by innovating and adapting.

“The return to profitability and sustainability may be a significant challenge to overcome for some businesses, but many are thinking about how to sustain a ‘new normal’ for their business with technology potentially playing a core role in delivering their products and servicing their customers into the future.”

Digital solutions could also become a source of competitive advantage on the other side of lockdown, for both businesses looking to rebuild and those new businesses that emerge from the pandemic.

The average small business can save around 10 hours a week on paperwork by going digital across multiple areas of operation, according to Innes. That’s valuable time that could be spent growing and diversifying your enterprise as the economy recovers.

“Whenever there’s adversity, we tend to find clarity because we focus on what’s important,” Innes says. “The difficult and uncertain times we’re experiencing today may be an opportunity to prepare yourself and your business for a digital future.”

Where NAB can help

NAB has supported small and medium businesses re-engineer their operations during previous changing market conditions. Its specialist business bankers are working with customers as they modify their operations and embrace digital technologies in response to this current COVID-19 crisis.

For more information on how NAB is supporting businesses at this time, see our coronavirus business support hub.

Digital business snapshot

  • Digital solutions are helping many SMEs continue operating through the coronavirus crisis
  • Over time, digital technologies have become more user friendly and affordable even for small businesses
  • Embracing digital technology may make your SME more efficient and competitive in the long term
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