Investments in technology are on the rise; adoption of new technologies in the mid-market gains speed
Mid-market C-suite executives are increasingly viewing technology as a strategic asset that can drive competitive advantage and are taking a more active role in technology decisions, according to Deloitte's report, "Disruption in the mid-market: How technology is fueling growth," launched today.
Nearly half (48 percent) of mid-market executives surveyed by Deloitte indicate that their company's leadership views technology as a "critical" differentiator and key to growth, compared to 41 percent who said the same last year.
"It is becoming harder and harder to separate technology from business strategy and performance," says Stephen Keathley, principal, Deloitte Consulting LLP, and national technology leader, Deloitte Growth Enterprise Services. "Technology now touches essentially every business function — from sales and marketing to human resources, from finance to operations and compliance. C-suite's growing involvement in these critical decisions is a welcome development because, more often than not, the business impact of new technology is directly related to the level of support and commitment received from the highest levels of the organization."
Close to two-thirds (62 percent) of mid-market executives say their company's C-suite leaders have "some" level of involvement in the adoption of next generation technologies, nearly half (46 percent) say C-suite is "actively engaged," and a growing percentage (33 percent, compared with 20 percent in 2014) say their leadership is "leading the charge."
This growing involvement by the C-suite also is bringing along with it a renewed focus on return on investments, as 40 percent of mid-market executives — compared to 34 percent a year ago — say their company almost always does a post-implementation evaluation to measure successes.
Technology investments ramp up; Cloud and analytics major focus areas
More than two-thirds (67 percent) of executives say their company's technology spend is higher than last year, compared to 58 percent who said the same in 2014. Moreover, there's been a significant increase (to 30 percent from 19 percent in 2014) in the number of mid-market executives who say their technology spend is more than 5 percent of revenue.
Among the new technologies, analytics (47 percent) and cloud applications (43 percent) are seen as having the highest potential to produce the greatest productivity gains. As such, many mid-market companies are speeding up their adoption of these technologies. Those that are currently in the process of deploying cloud-based technologies have gone up from 34 percent last year to 42 percent in 2015. And a whopping 80 percent of mid-market companies say they use business analytics, compared to 65 percent who said the same last year.
Cyber security an ongoing concern
According to the report, security is one of the main obstacles to the adoption of new technologies. In fact, 35 percent of mid-market executives cite data integrity and reliability, and another 33 percent cite confidence in information security as the top issue impacting the pace of adoption of cloud-based services.
Moreover, information security is called out as the No. 1 technology-related trend that will have the biggest impact on business in the next 12 months. But despite these concerns around security, only half of mid-market executives surveyed say they have the most up to date and robust security measures in place.
"The specter of cyber-attacks and their potential to sink client trust and investor confidence continues to emerge as a frustration among executives in our survey," says Adnan Amjad, the Deloitte & Touche LLP partner who leads Deloitte's Vigilant cyber threat risk management practice. "As hackers become more sophisticated, one particular area of concern for mid-sized companies is getting employees trained so they can become familiar with the different types of attacks and spot them right away. It is critical that mid-market companies implement processes to identify, protect and monitor the company's most valuable information."
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