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Australian businesses risk falling behind Asia-Pacific counterparts if digital technology and strategies such as AI are not adopted soon, the professional body has warned.
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Aussie businesses ‘held back’ by not embracing technology, cautions CPA
29 August 2024
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In a recent report, CPA Australia found Australian businesses must learn to embrace new technology and digital strategies if wanting to remain forefront and relevant within the global market.
The 2024 Business Technology Report revealed only 53 per cent of Australian businesses have a digital strategy compared to 69 per cent of businesses outside of Australia.
These countries ahead of Australia included China, Hong Kong, Vietnam, Singapore, and Malaysia.
CPA Australia said businesses that have such a digital strategy are much more likely to report their profit is increasing.
“Nearly 69 per cent of businesses with such a strategy reported their profitability increased in their most recent financial year,” CPA said.
“Of those that didn’t have a digital strategy, only 35 per cent reported increased profitability.”
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The survey consisted of 1,060 accounting and finance professionals and found Australian businesses are behind those in Asia-Pacific areas in terms of the adoption of AI.
The results reflected only 22 per cent of Australian businesses have incorporated AI to a moderate or significant extent compared to 41 per cent across the other markets.
Thirty-four per cent of Australian businesses said they have never used AI, whereas only 22 per cent of Asia-Pacific counterparts have never used AI.
It was also demonstrated that the businesses with increased investment in new technology are more likely to experience improved profits.
“For example, of the businesses using AI, 76 per cent said their profitability increased last financial year, compared to 34 per cent that didn’t use AI,” it said.
CPA Australia’s business investment and international lead Gavan Ord said the research highlighted the importance of new technology in business success.
“Companies that embrace a range of new technologies are observably more likely to be profitable and efficient,” he said.
“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.”
Though Australian businesses are slow to incorporate AI into daily operations, it was found they perform well in terms of cyber security and data protection.
Results showed 68 per cent of Australian respondents said increased cyber security protection was their company’s top technology initiatives in the last year, compared to 51 per cent from other markets.
Seventy-six per cent of Australian respondents said their business places a high level of importance on ensuring the accuracy, security, and privacy of the financial data it holds.
Only 64 per cent of Asia-Pacific companies hold this level of importance on the security of their financial data.
Ord said although cyber security is strong, Australian businesses need to consider the benefits AI could provide them.
“Local businesses are clearly behind the game in exploring ways to use AI to improve their efficiency and overall performance,” he said.
“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.”
Australian businesses were also found to be less concerned with the use of technology to aid ESG initiatives.
According to the results, only 11 per cent of Australian businesses use technology to monitor their energy usage, waste, and emissions in comparison to 18 per cent of Asia-Pacific counterparts.
“Similarly, just 10 per cent 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 per cent,” the professional body said.
“Only 9 per cent of Australian businesses use technology to identify sustainability-related risks and opportunities, compared to 33 per cent from the Asia-Pacific.”
CPA Australia has recommended local businesses to develop and implement digital strategy, invest in technology, use technology to meet sustainability goals, identify opportunities, and prioritise regularly reviewing new technology.
Ord said Australian businesses have a lot to learn from their Asia-Pacific counterparts.
“Being open to new technologies and new ways of operating is crucial to the new success of any business,” he said.
“If you stand still for too long, the world can quickly pass you by, especially when it comes to technology.”
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