Australian businesses risk falling further behind those in the Asia Pacific region if they fail to embrace appropriate digital strategies and new technologies such as artificial intelligence (AI) as quickly as possible.
CPA Australia’s Business Technology Report 2024 found that only 53% of Australian businesses have a digital strategy, compared to 69% of businesses outside Australia, including China, Hong Kong, Vietnam, Singapore and Malaysia.
Companies with such a digital strategy are much more likely to report increased profits. Nearly seven in ten (69%) companies with such a strategy reported increased profitability in their most recent financial year. Of those without a digital strategy, only 35% reported increased profitability.
The survey of 1,060 accounting and finance professionals also found that Australian businesses are lagging behind their Asia Pacific peers when it comes to AI uptake. Only 22% of Australian businesses have adopted AI to a moderate to significant extent, compared to 41% in the other markets surveyed. One in three Australian businesses (34%) said they have never used AI, compared to just 22% in Asia Pacific.
The research also found that companies that invested more in new technologies were more likely to report higher profits. For example, 76% of companies that used AI said their profitability increased in the previous financial year, compared to 34% that did not use AI.
Gavan Ord, CPA Australia’s business investment and international lead, commented: “The research demonstrates the importance of new technology to business success. Businesses that embrace a range of new technologies are likely to be more profitable and efficient. It is critical for Australian businesses to embrace technologies that are right for them as quickly as possible to ensure they keep pace in a challenging business environment.
“While the number of Australian businesses using AI is growing, it’s not yet an everyday tool for most. However, local businesses are clearly lagging behind in exploring ways to use AI to improve their efficiency and overall performance. Embracing technologies – and discovering what they can and can’t do for your business – is crucial. AI won’t work for every business, but it could prove to be revolutionary for some.”
While Australian companies lag behind their Asia Pacific peers when it comes to AI adoption and digital strategies, they perform well when it comes to cybersecurity and data protection.
More than two-thirds of Australian respondents (68%) cited increased cybersecurity protection as their company’s most important technology initiatives in the past year, compared to 51% of other markets. More than half (54%) of Australian respondents also said their company’s cybersecurity proficiency was above average or better, compared to 48% of other markets.
Meanwhile, three-quarters (76%) of Australian respondents said their company places a high priority on ensuring the accuracy, security and privacy of the financial data they hold. This compares to 64% of other Asia-Pacific markets.
However, Australian companies were less concerned about using technology to help with certain ESG initiatives. Only 11% of Australian companies are using technology to monitor their energy use, waste and emissions, compared to 18% in the Asia Pacific region. Similarly, only 10% of local companies are using technology to help them with sustainability performance reporting, but in other Asia Pacific markets this number rises to 31%. And only 9% of Australian companies are using technology to identify sustainability-related risks and opportunities, compared to 33% in the Asia Pacific region.
Ord concluded: “Australian businesses can learn a lot from their Asia-Pacific peers. Being open to new technologies and new ways of working is critical to the success of any business. If you stand still for too long, the world can quickly pass you by – especially when it comes to technology.”
“CPA Australia: Failure to embrace new technology is holding Australian businesses back” was originally created and published by The Accountanta brand of GlobalData.
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