What kinds of tech are SMEs investing in to drive growth?

As the new year approaches, Australian small and medium-sized enterprises (SMEs) are gearing up by making strategic investments in tech to navigate the twin challenges of inflation and competition. The right kind of tech investments can drive growth and help SMEs remain resilient in an ever-changing and highly competitive market.

Discover what kind of emerging technology small businesses are investing in, and how they’re capitalising on the latest innovations to remain profitable.

Report shows a rising number of SMEs are investing in technology

A recent report from Instarem reveals what SMEs are investing in ahead of the new year. This report looked at where SMEs are allocating their resources and how these trends relate to broader market conditions.

While small businesses in Australia are still grappling with the challenges of inflation, it seems that many are tackling these problems by making smart, savvy investments – specifically, by investing in technology.

Many SMEs are investing in IT services, with an overall 11.5% increase in spending in this area. With the incredibly rapid advancement of artificial intelligence (AI) and machine learning (ML), it’s no wonder SMEs are investing strategically in digital transformation to help grow their businesses.

Top tech investments for SMEs

The findings from the Instarem survey on tech investments are also support by NAB’s Business Insights report. Released quarterly, the May 2024 report shows that Aussie SMEs are actively investing time and money in tech solutions like AI, machine learning, the Internet of Things (IoT) and automation to help run their business operations.

According to the Business Insights report, almost 1 in 4 (23%) SMEs have already invested, while a further 1 in 5 (20%) have not yet invested but are planning to.

What this says is that small businesses can’t afford to be left behind when it comes to the technology race. In order to thrive and remain competitive, SMEs should consider investing in the right kind of tech to help them stay ahead of the curve. But where should you start?

Operational and productivity benefits of tech investments

The main reason for investing in emerging technologies, 58% of Business Insights respondents said, was to increase productivity levels.

Investing in the right kind of technology can help improve efficiency and drive growth. Some new technologies and their benefits for small businesses include:

1. Artificial intelligence: AI-powered tools can be used to offer predictive analytics and big data processing. With large data sets, these tools can be used to analyse historical numbers to predict new trends, as well as offer customer insights like identifying target audiences and analysing shopping habits.
2. Generative Pre-trained Transformer (GPT): GPT tools can be used for a wide variety of things, including automated customer support, basic content creation and market research.
3. Automation tools: One of the biggest benefits of automation tools is being able to use them to complete repetitive, time-consuming tasks, therefore freeing up your time to focus on other things. This could include things like customer relationship management (CRM), inventory management and workflow automation.
4. The Internet of Things: IoT refers to a network of smart, connected devices (“things”). An example of this would be a farmer who has a connected network of sensors that monitor soil moisture levels, temperature, PH levels and more. This information can then be used by the farmer to make informed decisions about their produce. The network could also be programmed to automate processes when certain conditions are met. For example, if the soil moisture levels are too dry, then an automatic sprinkler system could activate.
5. E-commerce platforms: For SMEs looking to expand business online, then it can be worthwhile investing in e-commerce platforms. These platforms (think Shopify or Squarespace) usually provide a comprehensive set of tools that can be used by businesses to sell products and services online, manage operations, analyse customer data, enhance the customer experience, manage inventory and more.
6. Mobile apps: Having an app for your business can be a great way to connect with your customers. Depending on the kind of industry you’re in, the app could be used to place orders, track deliveries, accrue loyalty points, streamline payments, and more.

The need for strong cybersecurity

As technology continues to advance and evolve, so do cyberthreats. Small businesses may not think they’re a target for cybercriminals. But the fact is, cybercrime is on the rise in Australia and no business is too small to become a target.

Doing business in the 21^st century generally means you need to invest in some form of technology to continue being profitable. This could be something as simple as having a website that allows customers to purchase products online, or something more complex like building an IoT network to help manage your business. Whatever it is, cybercriminals are adept at sniffing out vulnerabilities in your network that they can exploit.

But there is a solution to this. Implementing strong cybersecurity measures, such as firewalls, encryption, and multi-factor authentication can all help to safeguard valuable business information and customer data.

Cyber Liability insurance

Cyber Liability insurance may also be a smart investment in addition to strong cybersecurity measures. Many small business owners choose to take out Cyber Liability insurance because it can offer peace of mind should the worst-case scenario come to pass. It covers losses from claims arising from data breaches, business interruption and remediation costs following an actual or threatened cyberattack or other cyber incident.

If you’re considering investing in new technology for the first time, or upgrading your current set up, then it’s worthwhile to also consider purchasing Cyber Liability insurance or reviewing your existing policy.

Visit BizCover online to compare insurance from Australia’s top providers today.