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Mid-Market Increasing Tech Spending, Building Toward Cloud

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Technology is becoming a great equalizer for mid-market companies, according to a national Deloitte survey that found technology spending is on the rise for more than half of the surveyed mid-market companies.

While 48 percent of the 500 corporate executive respondents reported their companies’ technology spending is higher this year compared to last, another 10 percent said it was “significantly higher.” That 58 percent total eclipses the 45 percent of business executives reporting bigger budgets last year.  About 39 percent, meanwhile, said spending was the same, with 3.5 percent reporting it as lower and zero responding “significantly lower.”

Technology is viewed as a critical differentiator and key to growth by the leadership of 41 percent of respondents’ organizations, while another 38 percent view it as a strategic investment, and fewer called it simply “necessary” or foundational than in the previous year.

At the same time, roughly half of business executives reported difficulty with new technology when asked about their biggest IT challenge, with about one quarter assigning that problem to budgetary constraints and the other 24 percent replying the challenge of keeping up with the new technology. Other IT issues included not having the right talent or skill set, tactical hurdles, and understanding ROI. Only 8 percent reported an issue with leadership support.

The current state of IT for roughly 48 percent of respondents is in the building and development stage, while 36 percent said their IT was mature with established processes. Meanwhile, the state of cyber security appears split, with 52 percent of executives reporting the most up-to-date and robust security measures and 39 percent acknowledging the importance but saying they don’t have the right infrastructure/resources.

When it comes to mobility, 55 percent of the executives say it is having an impact on the labor force, and 45 percent say it is having a significant impact on customers.

Mobility also leads the pack in technology trends executives think have the potential to produce the biggest productivity gains for their organizations, with 43 percent responding such, ahead of the 40 percent saying analytics, 39 percent replying cloud and 23 percent responding big data (for which respondents selected all that apply).

The greatest challenge responding executives see with the cloud is in ensuring data integrity and reliability (38 percent), outpacing last year’s top challenge of confidence in information security, which dropped a little this year to 29 percent. Date privacy and security risks, however, were still the top concern influencing their organizations’ pace of cloud adoption (34 percent), with integration (23 percent) and understanding the value proposition (16 percent) tracking behind.

In terms of implementation, only 14 percent of executives said their cloud-computing resources were mature, though higher than last year’s 9 percent, and 34 percent classified their organizations as being in the “building” stage and 24 percent in the “experimenting” stage.

“The potential impact of technology on mid-market businesses cannot be overstated,” the report concluded. “We’re encouraged by the growing perception of technology as a strategic imperative and differentiator, as evidenced in this report, and applaud those who have tested the waters and are now enjoying the benefits of that effort. Whether it’s starting with a toe in or feeling comfortable diving head-first, the technology pool may offer something for everyone.”

The full PDF of the Deloitte report, Technology in the Mid-Market: Perspectives and Priorities, is available here

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