According to a report by MYOB, New Zealand mid-market businesses are losing up to a day and a half of time, per person, per week due to ineffective technology solutions.
The study, conducted by Forrester Consulting on behalf of MYOB, reveals an average of 12.5 hours per employee is wasted each week (75 working days per year) on manual or repetitive tasks, at an extra cost to each business of roughly $2.2million per year.
MYOB head of customer service, enterprise, Jo Tozer, says the new insights support recent findings from the Productivity Commission, which highlighted that New Zealand's falling productivity growth rate are a direct result of heavy reliance on outdated legacy technology.
"New Zealand businesses have been through some challenging times over the last 18 months," says Tozer.
"Now, understandably, the current focus is on revenue-generating activity, but this is precisely what businesses are missing out on by letting inertia take hold when it comes to upgrading their business and people management solutions.
"With 41% of local mid-market firms we polled saying a lack of prioritisation in the business was holding them back, these findings demonstrate that leadership needs to create the time and space to work on the company, rather than in it. To drive real change, businesses need leaders with a clear vision and a desire for action to inspire their employees to think differently about getting the job done and what more they could achieve if they weren't bogged down in manual processes.
"We believe the findings show many leaders are unaware of the genuine link between their operations software and achieving business goals, so senior decision-makers must take charge and illustrate how the wrong digital solution can waste time, negatively affect sales growth, resulting in extra costs and create poor customer experiences.
"Too many New Zealanders are currently working harder, not smarter, and it costs businesses significantly. This is an area that has just as much of a commercial case for business change and investment as any other area does," she adds.
The study also captured the current state of play regarding legacy software used by New Zealand mid-market businesses. Some findings revealed:
- More than a quarter (27%) of local businesses surveyed have been using finance and accounting solutions that are five to 10 years old.
- Nearly one-in-five (18%) of local businesses surveyed have been using workforce management solutions more than five years old.
- 21% of local businesses surveyed have been using project management solutions more than five years old.
- More than one-in-10 local businesses surveyed (12%) have been using employee onboarding or employee management tools between five and ten years old.
- Tozer says with the potential boost modern solutions offer when enhancing operational efficiency, there's little reason for local mid-market businesses to settle for the status quo.
"If businesses want to succeed and gain competitive advantage, then they must adapt and invest in technologies to future-proof not only productivity but also profitability," she says.
"As it stands, 63% of businesses across New Zealand and Australia admit their systems have held them back from taking on larger customers, and this is another negative outcome from siloed or legacy solutions that is hitting their bottom line."
The latest findings also show the loss of potential new customers. New Zealand organisations surveyed believe that more than a quarter (27%) of their extra costs are incurred due to inefficient or ineffective business and people management solution capabilities.
"Mid-market businesses need modern solutions primed for the fast-changing nature of modern commerce. These solutions need to deliver on agility and innovation, not only to drive cost efficiency but support growth and expansion ambitions," says Tozer.
"Additional insights from Forrester highlight businesses using future-fit platforms and practices grow 3.2 times faster than their industry peers. And 42% of local businesses in our study recognise a positive impact on employee productivity within six-to-12 months of adopting modern people or business management solutions, the case for change couldn't be clearer."