Why Productivity Is The Silent Culprit Hindering Australian SMBs

Australia’s productivity challenge is not new, but it is becoming impossible to ignore for small to medium-sized businesses (SMBs). As Treasurer Jim Chalmers and the Labor Government grapple with a stagnating economy, the numbers paint a stark picture. Labour productivity fell by 1.2 per cent over the year to March 2025, the weakest performance in 35 years. The 10-year average productivity growth rate now sits at just 0.2 per cent. Meanwhile, Australians are working harder. Hours worked per person has grown 2 per cent year-on-year, yet productivity per capita has flatlined. If this trajectory continues, Australians could be 40 per cent poorer and working 5 per cent longer weeks by 2063.

So, what is holding Australia’s SMB segment back? While macroeconomic factors and broad sectoral trends present an obvious backdrop to Australia’s productivity challenge, a significant and often underestimated contributor lies within the operational fabric of businesses themselves: inefficient administrative processes.

Among these, contract management stands out as a critical function that, when poorly handled, can impose substantial hidden costs, drain resources, and directly impede productivity. Traditional flat-file or paper contracts and legacy workflows are stalling innovation, increasing workloads without the impact provided by advanced intelligence technologies.

Multiply these micro-inefficiencies at the scale of the economy, in which SMBs make up 98 per cent, and the impact is severe: with recent Docusign and Deloitte research estimating that AUD $3.13 trillion of global economic value is collectively lost each year because of this.

The Digital Maturity Disconnect

Looking at some of the key stats from our report, it looks like part of the problem is a misalignment between how Australian and New Zealand (ANZ) businesses perceive their digital maturity and their ability to derive a proportional return on investment from it.

Taking contract management tools as an example, our research shows that despite many organisations believing they are ahead of the curve, only a fraction of businesses are making the most of their investments in tools:

• 75 per cent of leaders claim advanced capabilities in routing, editing and approval of agreements, yet only 39 per cent see significant enhancements from these workflows.
  
  
• 85 per cent of businesses say they have high maturity but only half (44 per cent) can point to meaningful performance gains.
  
  
• And while 90 per cent of ANZ leaders report mature insights and intelligence capabilities, only 25 per cent have boosted business outcomes. This lags behind neighbouring markets like Japan at 33 per cent.

In other words, perceived maturity is not translating into productivity wins. Interestingly, when surveying business leaders globally, an overwhelming majority of ANZ leaders said their focus was on enhancing efficiency throughout the agreement lifecycle due to lengthy negotiation cycles. However, operational efficiency can only take a business so far. Without true optimisation of the entire agreement lifecycle (one that is conducive to data-driven insights) businesses risk mistaking small tactical wins for long-term, strategic progress towards their goals.

Is Ai A Turning Point For Agreement Management?

At this point, artificial intelligence (Ai) may look like the elephant in the room waiting to save SMBs from this productivity rut. And for the most part, its potential shows immense promise. Ai offers a way to move beyond simply streamlining workflows and enables businesses to unlock the rich potential trapped inside static contracts and legacy workflows.

Globally, nearly half of business leaders (48 per cent) now see contract creation as a prime area for Ai transformation. This outstrips priorities like customer experience, agreement storage and even risk evaluation. The appetite is there, but so are the challenges, with 38 per cent of leaders citing regulatory compliance as the most significant barrier to Ai adoption.

Despite these hurdles, the pace of change is accelerating. Business leaders estimate that within three years, Ai will assist with 60 per cent of tasks across the contract lifecycle, presenting more than a technological shift – this is a strategic opportunity for businesses to close the gap between digital maturity and real-world business impact.

For SMBs, the opportunity is even more compelling. Unlike large enterprises weighed down by legacy systems, SMBs can move quickly. Implementing Ai and intelligent business processes can be a force multiplier for smaller teams, enabling them to derive insights from their contracts that enable smarter decision making and scaling productive output as a result.

By automating routine agreements and leveraging Ai-driven insights, SMB leaders can focus on strategic growth, not just operational firefighting. This approach not only conserves resources but also positions SMBs to compete more effectively in a challenging economic landscape.

As SMBs look to implement Ai-enabled intelligent agreement processes into their workflows, it’s important to take stock of past lessons: focusing on tactical operational wins only gets you so far; implementing with strategic intent is where true gains are to be had. For those willing to act now, the silent culprit that once held businesses back can be their competitive differentiator.

Shaun McLagan, Group Vice President, APJ, Docusign.

Last Updated on October 15, 2025 by Shaun McLagan