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.

Related News

Mobile device displaying the Amazon logo
Customer Experience
Customer Experience
Amazon will change Australian retail – but will it be good for you?

Digital futurist Jeffrey Cole shares insights from his research into online and bricks-and-mortar retail with Stuart Ridley.  At first glance, Australia’s land mass presents ma...

Dark-haired woman working at laptop.
Tech Solutions
Tech Solutions
What to look for when choosing an internet provider

Not all internet service providers (ISPs) are created equal. Some can be hit and miss when it comes to customer service while others might not meet the mark in the speed depart...

Violet Roumeliotis, 2017 Telstra  Australian Business Woman of the Year Award.
Success Stories
Success Stories
Refugee advocate is named 2017 Telstra Australian Business Woman of the Year

Violet Roumeliotis, Chief Executive Officer of not-for-profit Settlement Services International Limited (SSI), is the 2017 Telstra Australian Business Woman of the Year, announ...

A woman using her laptop and phone in a shop.
Tech Solutions
Tech Solutions
Get to the nbn™ network starting line in great shape

Even if it may still be some time before the nbn network is available in your neighbourhood, planning now can mean a hassle-free switch over when it happens. When the nbn™ netw...