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Subscription overload ‘costs SMEs $1.4bn a year’

Technology

Lack of integration means software tools run in silos and hinder rather than help, says MYOB survey.

By Philip King4 minute read

Small businesses could save thousands a year by dropping unused software subscriptions with 60 per cent saying most digital tools fail to integrate and “run in silos”, according to a recent survey.

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Almost half of those questioned admit they are still paying for inefficient or unused software due to the hassle of changing or the lack of better alternatives, with the cost of redundant subscriptions averaging $600 per business.

With 2.4 million SMEs in Australia that adds up to $1.4 billion, the research by MYOB found.

The chief sales and support officer at MYOB, Daniel West, said businesses were suffering from “subscription overload”.

“Many consumers are cancelling subscriptions amidst rising cost of living pressures,” Mr West said, “and it’s an optimum time for businesses to also assess their subscription overheads, especially if some are sitting there unused.

“Choosing tools that offer multiple services in the one place or ensuring they only pay for the features they really need could help businesses alleviate the financial and productivity costs they’re facing.”

The survey, of 1,500 SMEs, found they collectively invest $2.2 billion a year in digital tools but three out of five find some of the software hinders rather than helps.

“Bad digitisation” involves software apps and tools that run in silos, rather than seamlessly integrating with each other.

“The digital systems that businesses use are not integrating together properly and it’s costing businesses dearly,” Mr West said.

As well as money, businesses are losing productivity with one full day each week carrying out tasks caused by a lack of software integration while more than 90 per cent waste time on manual tasks or job duplication.

For those in professional services, this includes manually entering information from one system to another (32 per cent), checking for consistency across platforms (28 per cent), and editing or fixing errors after information is transferred between systems (20 per cent).

The result is an incomplete picture of business performance for seven out of 10 SMEs.

“As an industry, software companies like ours need to take this ‘bad digitisation’ burden off businesses and work on creating better connected systems,” Mr West said. “Nothing should hold back ambitious businesses, and we recognise we need to do something about it.”

The co-founder and managing director of Flare, James Windon, said it was crucial for software companies to work together.

“Flare is currently embedded in over 30 workplace platforms, so ensuring our software works together seamlessly with our partners is absolutely vital to provide the best experience for our customers and their employees,” he said.

“Our deep, direct integration with MYOB’s payroll and workforce management services lets businesses onboard an employee via Flare, without the need to log into another app, and is included in the subscription cost for MYOB users.

Mr West said integrating the six core business processes – managing jobs, employees, suppliers, cash flow, finances and generating revenue – was critical.

“But what’s become evident from our research is that local SMEs are really struggling to find systems that truly integrate with each other, or the one solution that offers all the capabilities they need all in the one place,” Mr West said.

The MYOB research quizzed a nationally representative sample of 2,056 sole traders, small and medium-sized businesses across Australia and New Zealand during March and April.

Subscription overload ‘costs SMEs $1.4bn a year’
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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

You can email Philip on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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