C-suite executives at mid-market firms investing in analytics, cloud
"In the middle market, technology really has become a C-suite issue," says Stephen Keathley, national technology leader of Deloitte Growth Enterprise Services and principal of Deloitte Consulting. "The numbers are way up for executives that are actively involved in their company's technology decisions."
Between May 29 and June 15 of this year, market research firm OnResearch polled 500 executives at mid-market companies on Deloitte's behalf. The poll focused on the role and value that technology plays and how it influences business decisions in the middle market. The respondents were from mid-market companies with annual revenues ranging from $100 million to more than $1 billion.
[ Related: Data analytics help doctors develop cancer treatment plans in a day ]
The research found that 48 percent of mid-market executives say their company's leadership views technology as a critical differentiator and key to growth, up from 41 percent last year. Additionally, 62 percent say their company's C-suite leaders have some level of involvement in the adoption of next-generation technologies, while 46 percent say the C-suite is actively engaged. Moreover, Keathley notes that a growing percentage — 33 percent, compared with 20 percent in 2014 — say leadership is "leading the charge" when it comes to the adoption of next-generation technologies.
The C-suite's growing involvement has been accompanied by a surge in technology spend — 67 percent of respondents say their company is spending more on technology in 2015. Thirty percent (up from 19 percent in 2014) say that spend is more than five percent of revenue.
"We're seeing a continuing increase in the strategic importance of technology for middle-market companies," Keathley says. "A lot of companies are starting to realize that technology is a fundamental way to reach out to their customers."
As a result, Keathley says, it should perhaps come as no surprise that cloud and analytics are the two primary areas of focus of technology investment. Forty-seven percent of respondents say analytics has the highest potential to produce the greatest productivity gains, while 43 percent feel that way about cloud applications.
Respondents who say they're in the midst of deploying of cloud-based technologies have increased from 34 percent in 2014 to 42 percent in 2015. And respondents who say they use business analytics have increased from 65 percent in 2014 to 80 percent in 2015.
"These technologies give smaller companies the ability to look and act more globally without having to make the big capital expenditures they would have had to make in the past," Keathley says.
That said, cybersecurity also remains top of mind. The report found that 35 percent of mid-market executives see data integrity and reliability as the main obstacle to the adoption of new technologies, while 33 percent point to confidence in information security.
"A lot of high-profile cases over the past year have made them realize that they're going to have to invest in this," Keathley says. "And they're going to have to ask themselves, 'How do the emergence of cloud-based services impact that investment'"
[ Related: How secure is the hybrid cloud ]
The upshot of all this, Keathley says, is that CIOs need to adjust their focus to best support the business.
"The CIO in a middle-market company has traditionally been a sort of a curator of technology," Keathley says. "I don't think that's going to be adequate anymore. I think the CIO in the middle-market is going to have to evolve and become either the chief integration officer or the chief technology portfolio officer who oversees a portfolio of different services that need to be integrated to support the business. It's really important to understand the business strategy the company is pursuing and how technology can be used to help those strategies."
When it comes to cloud, Keathley suggests CIOs pursue a phased adoption:
[ Related: Collaboration now tops list of cloud computing drivers ]
When it comes to analytics, Keathley says, it's all about starting small and rigorously controlling the scope: