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Internet Key to Transforming Economy

Internet Key to Transforming Economy

Businesses using cloud earn more, more confident and pay staff more – MYOB survey
Internet use potentially transformative; key to increasing productivity – NZIER
Removing barriers key to mass market adoption

Using the internet could transform the New Zealand economy by improving productivity, according to a new study showing local businesses using cloud technologies are more likely to be increasing revenue, selling more and paying more to their staff.

The latest MYOB Business Monitor, a survey of 1000 business owners around the country, shows that businesses using cloud solutions are more successful. These businesses are 13% more likely to have had revenue growth over the last 12 months, 43% more likely to have more work or sales in the pipeline for the next quarter, and 54% more likely to be diversifying their business and product offerings.

Employees were also likely to see the benefits, with businesses making use of cloud solutions 61% more likely to be increasing staff wages and salaries over the coming year and 33% more likely to hire additional staff.

Financial & Operational Results for businesses using the cloud
• Revenue growth in 2011 financial year – cloud users 13% more likely to have grown
• 2012, Q3 sales pipeline - cloud users 43% more likely to have more work on
• 2013 revenue forecast – cloud users 55% more likely to forecast growth
• Diversification of products and services – cloud users 54% more likely to be diversifying
• Hiring intentions – cloud users 33% more likely to be increasing staffing
• Staff salaries and wages – cloud users 61% more likely to be increasing
• Economic confidence – cloud users 41% confident the economy will improve < 12 months

Source: MYOB Business Monitor, n = 1005, Research conducted by Colmar Brunton for MYOB NZ Limited, May – June 2012
MYOB Business Monitor Research Library | © MYOB NZ Limited, 2012, All Rights Reserved

MYOB general manager Julian Smith says business owners are using a variety of internet based services and products to change the way they work.

“Using the internet as a business tool allows companies to become more efficient and more productive, which is improving profitability,” says Julian Smith.

“The use of cloud services also reflects a new way of working – allowing businesses to become more mobile and their teams to work remotely, and for teams and businesses to collaborate,” says Julian Smith.

“These businesses also found lower costs in a range of areas – from reduced IT management to scalable technology costs.”

New Zealand consumers are also likely to benefit from increased use of the cloud. 29% of businesses in the MYOB Business Monitor said they would pass on any administrative cost savings directly to customers.
“Cloud solutions help to make businesses more profitable and competitive. They can help also make products and services more affordable for consumers,” says Julian Smith.

NZIER principal economist Shamubeel Eaqub says the results of the MYOB survey highlight the potentially transformational effects of the internet for the local economy.

Mr. Eaqub says, like refrigerated shipping in the 1880s, the internet represents a step-change in technology that can connect New Zealand with the world and truly transform the economy.

“How we use technology to overcome the tyranny of distance and our small scale, could define New Zealand and our place in the world in the 21st Century. Businesses who aren’t embracing the internet are missing out on real competitive advantages, and that means losing market share,” says Shamubeel Eaqub.

“New Zealand businesses need to be online to engage and compete in an increasingly global and interconnected world. By helping to connect us to the rest of the world and opening up new markets and opportunities, the internet can transform the New Zealand economy.”

“The internet is an opportunity for transformative change. Reduction in communication costs and the expansion of networks brings the world closer to New Zealand. It also offers opportunities to collaborate and drive efficiencies and the potential for greater innovation.”

Julian Smith says although the results for businesses using the internet are compelling, many New Zealand businesses are missing out. The issue in part may be down to how technology providers are approaching their customers. Currently, just 14% of New Zealand businesses use cloud services, and only 35% have their own website.

“As consumers in New Zealand, we are some of the world leaders in the way we use the internet to buy, sell and share online. As business owners we are some way off the pace,” says Julian Smith.

“Businesses tell us that the main barriers to making use of the cloud is that they don’t know enough about it to make an informed decision; they have concerns about how and where their data will be stored and managed; and they quite simply have too many other priorities at present.”

“This really highlights the need to adopt a mass-market approach to promoting the benefits of the internet. It’s not enough just to build the technology and talk about the technical details. We must make it easy for time-poor business owners to understand the benefits and adapt new internet-based tools and services.”

Mr. Smith says the benefit of this approach has been demonstrated by the success of MYOB Atlas through the initiative – a collaboration between Westpac and MYOB to provide a free, easy to use website builder for businesses.

“In just five months, we’ve seen a 5% increase in the number of New Zealand businesses that have an online presence – one of the largest movements online for New Zealand business in recent times,” says Julian Smith. “The success of Atlas and the initiative has shown that addressing the pain – in this case knowing how to market your business online – for small businesses and making it as easy as possible for them to use the technology is key.”

MYOB, which will launch the cloud-enabled version of its flagship product MYOB AccountRight Live in early November, is redeveloping the majority of its business suite to help more businesses use the cloud.

“This approach will bring the cloud to the SME mass market via the country’s most popular accounting solution. They can choose how to do their accounts: online, offline or by alternating between at any time, and get into the cloud without having to learn anything new.”

“We know that businesses using the cloud are doing better – they are more productive, earn more and are diversifying. We believe the approach we are taking with MYOB AccountRight Live will help more New Zealand businesses move to the cloud and get ahead.”

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