Nearly half of Australian mid-size businesses face extinction

Smarter Staff
Smarter Writer

This article has been written by the Smarter Business™ Staff Writers

Smarter Staff
Smarter Writer

This article has been written by the Smarter Business™ Staff Writers

Close to half of Australian medium-size enterprises could start failing in three years, according to a new survey of chief financial officers.

Close to half of Australian medium-size enterprises could start failing in three years, according to a new survey of chief financial officers.

The survey commissioned by American Express found that 45 per cent of CFOs in medium-size Australian companies believed that their businesses would collapse within three to five unless they gave a higher priority to technological innovation and future proofing.

American Express Global Corporate Payments vice president, Christine Wakefield, said that while Australian medium-size businesses – defined as those with an annual turnover between two to $200 million were demonstrating a willingness to take risks, they were taking too long to act.

“The businesses we talked to are financially successful now, but some CFOs don’t have a clear vision of how to build a future-proofing plan. It’s time to get cracking or face the repercussions,” says Ms Wakefield.

American Express published the findings of its survey in a white paper.

dinosaur
The businesses we talked to are financially successful now, but some CFOs don’t have a clear vision of how to build a future-proofing plan. It’s time to get cracking or face the repercussions.

- CHRISTINE WAKEFIELD, AMERICAN EXPRESS

The biggest barrier to pursuing innovation according to CFOs

Titled, American Express CFO Future-proofing Survey, the white paper revealed that 40 per cent of CFOs believed that time poverty was their biggest barrier to pursuing innovation. In 27 per cent of cases CFOs reported that their organisation did not have a formal innovation strategy.

At the same time, the survey revealed that responsibility for protecting businesses from failure was increasingly falling at the feet CFOs.

For instance, 77 per cent of CFOs surveyed reported playing a major role in their business’s future proofing strategies.

“The CFO role has extended well beyond the traditional finance-only function with responsibilities including oversight in human resources, procurement, supply chain, planning and strategy, IT, investor relations, systems and processes,” American Express wrote in its paper.

While many CFOs believed that their businesses were not engaging sufficiently in innovation strategies, the vast majority them reported that macro-economic conditions, rather than market disruption, posed the greatest threat to their businesses over the next five years.

Only five per cent of CFOs identified disruption from new domestic market entrants as a threat to their operations while 77 per cent cited worsening economic conditions.

Don't be a dinosaur

Some CFOs don't have a clear vision of how to build a future-proofing plan. 45 per cent of CFOs revealed in a recent American Express survey that they believe their business will collapse in 3 to 5 years unless they give a higher priority to technological innovation and future proofing. Christine Wakefield, American Express Global Corporate Payments vice president, says that businesses are demonstrating a willingness to take risks but taking too long to act.

Man filming a video
Trends
3 businesses that are winning with video

Video technology has helped a lot of businesses deliver their services – and remain operational – throughout COVID-19. And for many, adopting this technology is not a Band-Aid ...

Man viewing furniture using augmented reality technology
Tech
Tech
Tech evolution: 3 ways to elevate your business

The pace at which technology is developing has made staying up-to-date more accessible, affordable and easier than ever. Adopting digital tools for your business could help str...

Man delivering packages
Trends
Conscious consumption: Even online, consumers choose local

Consumer behaviours and attitudes shifted in many ways as COVID-19 enveloped our reality. But one sentiment has become clear: consumers want to support local businesses, even w...

Woman practices yoga at home
Productivity
Productivity
Working from home: Habits for a healthy mind, body and business

Health and productivity are inextricably linked. So how can you ensure you’re setting yourself and your staff up for success while working from home?