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19 December 2016

More than half of small businesses now online

Connectivity growth and satisfaction rates on the increase

Half of all New Zealand’s small to medium sized businesses are now online according to leading accounting software provider MYOB.

The latest MYOB Business Monitor survey of more than 1,000 SMEs also highlights growing take up of ultra-fast broadband and increases in satisfaction rates amongst digitally connected businesses.

More than half (52 per cent) said having a website generated more customer enquiries and enabled the business to have more professional image (51 per cent). Fifty-two per cent said the use of a social media site, such as Facebook, allowed for more customer interaction.

“It’s quite a milestone for New Zealand to have half of all business now with an online presence. It shows local business owners understand the importance of digital technology and new ways of doing commerce,” says MYOB Head of Small Business Ingrid Cronin-Knight.

“Customers now expect to be able to find a product or service online. For most businesses, a website is a must, as is having a social media presence, for reaching and engaging with current and potential customers.

“The number of businesses who are now online has jumped from less than a third to more than half in just 5 years. I expect to see that number keep growing as the importance of being digitally connected is only going to increase.”

UFB access limited – but growing

While more than half of SMEs surveyed (56 per cent) believe an ultra-fast broadband (UFB) connection would positively benefit their business, just 32 per cent of local businesses report they are utilising fibre services.

Connectivity has jumped significantly since the last survey in March, with the most connected city now Auckland (38 per cent, up 12 per cent), followed by Wellington (36 per cent, up 8 per cent) and Christchurch (32 per cent, up 8 per cent).

Medium sized businesses (20 to 199 employees) are the most likely to be connected to UFB, with 57 per cent reporting their workplaces were connected. In regards to industry, the finance and insurance sector is the most connected with just under half (46 per cent) utilising UFB.

Satisfaction with access and connectivity on the rise

Satisfaction with internet speed and reliability has also risen, sitting at 47 per cent – a seven percentage point increase, however dissatisfaction still sits at a stubbornly high 31 per cent with 30 per cent dissatisfied with the cost of their plan.

On the whole, businesses in Auckland are the most satisfied with their internet access (41 per cent), while dissatisfaction is highest in Otago and Southland (42 per cent). This is surprising given Chorus’ Gigatown initiative in Dunedin.

Forty per cent of business owners in Wellington and 39 per cent in Christchurch are happy with their internet access.

Ms Cronin-Knight says while the roll out of high-speed broadband continues across the country, it’s clear some areas are still waiting to reap the benefits of faster, more reliable connections.

“Access to high-speed internet is imperative, and has been for some time now. It’s really a resource that every industry, across the country, should be able to tap into.”

“Cost-effective, reliable internet infrastructure is an absolute must for all businesses, wherever they may be, in order to keep up with new ways of attracting and servicing customers,” says MYOB’s Head of Small Business Ingrid Cronin-Knight.

Businesses keen to innovate

In the last 12 months, more than a third (37 per cent) of businesses surveyed said they had upgraded their computer hardware or software while 30 per cent opted to invest in machinery and equipment.

Employee training was also on the radar of many SMEs, with 21 per cent investing in staff development and 19 per cent updating their business strategies and management techniques.

However, there are barriers to innovation, highlighted by SMEs throughout the country.

While 23 per cent stated their business did not need to innovate, 22 per cent said cost was an issue, 20 per cent also said government regulation was a problem and 16 per cent reported a shortage in skilled personnel.

Cyber security still an issue

With more businesses becoming cyber aware, the Monitor survey highlights that 59 per cent of New Zealand SMEs are concerned about one or more cyber security risk areas.

“While this is an 11 percentage point drop from the last quarter, these statistics are still significant and highlight increasing appreciation amongst small business owners around the importance of good cyber security,” says Ms Cronin-Knight.

The most concerning aspect of cyber security for local businesses was hacking, with 39 per cent reporting they were worried hackers may be able to gain access to their data.

Concern	September 2016	March 2016
Hackers gaining access to data	39%	56%
Losing access to data	36%	50%
Losing control of data	32%	46%
Competitors accessing data	11%	19%
Data surveillance by local governments	8%	18%

“It’s great that SME operators are taking their data security things so seriously, and while numbers have dropped across the board, clearly SMEs are still concerned. It pays to make sure that every business, no matter how big or small, is pro-active in ensuring the safety of their data, whether it be making sure you have up-to-date, high quality security software, not using simple or obvious passwords or keeping an eye out for scams.”

Technologically savvy

Ms Cronin-Knight says it is apparent that businesses are staying abreast of technology and as a result, are doing better across the board.

“In order to ensure that New Zealand SMEs stay up to date and connected, we need to addresses their concerns around cyber security and focus on the roll out of UFB to every area across the country, in order for everyone to have the same opportunities.

“If every business has the opportunity to adopt the newest technologies, then New Zealand’s economy will continue to diversity and be even more competitive and internationally recognised.”

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