21 Sep 2017
Technology was once the province of large companies. It was expensive, it was complex. But today the increased accessibility of digital service solutions is levelling the playing field for small-to-medium enterprises (SMEs), allowing them to compete on more equal terms with larger competitors online.
Now a new frontier is opening up in the form of application-programming interfaces (APIs) which sit at the centre of the rapid digital evolution and pose a huge opportunity for SMEs.
“Once we developed our first software to support our clients, our business model quickly evolved,” - My Local Foodie CEO Tim Salisbury
Australia is one of the most digitally connected countries, according to Sensis’ 2017 Social Media Report. Nine out of 10 people use the internet and 56 per cent do so more than five times a day. Around 16 million Australians access the internet via their mobile phones.
Today’s internet-dependent consumers, both in Australia and abroad, want a seamless digital experience when buying goods and services, creating a huge opportunity for SMEs prepared to embrace digital technologies.
That means SMEs which are agile, receptive and fast to adopt new technologies like APIs will meet customer expectations and grow market share.
The future of APIs and their impact on the small-business sector was an issue explored at ANZ’s In Business Series event in Sydney in November.
“APIs allow businesses to provide new and valued digital services for customers through websites, mobile-phone applications and other internet-enabled devices,” ANZ’s Banking Services Business Domain Lead Nigel Dobson said at the event.
“This helps boosting functionality to solve customer problems or ‘frictions’, helping to improve digital engagement with customers.”
Indeed, many people probably already unconsciously enjoy APIs every day on mobile phones when ordering food or transportation or searching, buying and tracking goods – and are probably brand loyal to businesses who offer a well-curated collection of API-driven services.
The business of insights
“We’re in the business of providing insights,” My Local Foodie CEO Tim Salisbury says.
In front of nearly 100 SMB owners at the In Business Series event held at fintech incubator Stone and Chalk, Salisbury explained how digital technologies help his customers increase food sourcing and preparation efficiencies - ultimately helping them profits in a sometimes low-margin sector.
“Our business started in our spare bedroom as a buying group helping small foodies compete against large hospitality businesses,” he said.
Panellists who spoke at the event included Dobson, Federal Small Business Minister Michael McCormack, Deloitte Access Economics partner John O’Mahony, NSW Business Chamber Chief Digital Officer Conrad Mackenzie and ANZ Head of Business Banking NSW/ACT, Jenefer Stewart.
Salisbury said embracing digital was the turning point for his business.
“Once we developed our first software to support our clients, our business model quickly evolved from a buying group into a software business that efficiently helps hospitality clients create and deliver profitable menus that their patrons love,” he said.
My Local Foodie’s Sailsbury said APIs and the connectivity they provide helps pull hundreds of data sources together to provide his clients with the right information at the right time – the “secret sauce” to success, he says.
“Be it stock management, invoicing, timesheets – it enables them to continue to modify and optimise their businesses,” he said.
“Hospitality is a tough game to be in with lots of moving parts and we see every day that businesses adopting tech platforms with API links in their business have a definite ‘unfair’ advantage.”
Research suggests SMEs which embrace digital technologies will thrive in Australia’s digital future.
The latest Deloitte-Google Connected Small Businesses report showed digital engagement levels of SMEs continued to rise, with ‘basic-level engagement’ (businesses with only a single business email address) falling from 23 to 11 per cent in in 2017 - a sign of improved digital readiness.
“We’re seeing a dramatic uplift in the use of digital tools by SMEs,” Deloitte Access Economics partner John O’Mahony said.
“Yes it’s websites and social media strategies but it’s also ecommerce, search marketing and the use of data analytics for small businesses to better understand their customers,” he said. “The number of businesses who are offline – do not use digital tools – has fallen a lot, from around 25 per cent of business to 10 per cent in the last 12 months.”
The report showed SMEs with ‘advanced levels of digital engagement’ are 50 per cent more likely to be growing revenue and earn 60 per cent more revenue per employee compared to Australian SMBs with basic levels of digital engagement.
SMEs which augment their digital ecosystems and modernise their use of technology like data analytics as they seek growth and innovation opportunities will be the ones which succeed.
Guy Mendelson is General Manager, Small Business Banking at ANZ.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
21 Sep 2017
21 Sep 2017