Editor’s Note: Carolyn April is senior director of industry analysis at CompTIA, a nonprofit trade association that provides professional certifications to the information technology industry.
+++
How’s that for a fun fact? More than 99% of all businesses in the United States are “small,” employing fewer than 500 workers, according to the U.S. Small Business Administration. This will increase to 32.5 million businesses employing 48 percent of the country’s workforce by 2021.
Sit with those numbers for a while. Unless you work for the likes of IBM or Microsoft, Ford or Procter & Gamble, the odds are that you spend most of your professional time each week at a small to medium-sized business. These companies may get far less attention than corporate behemoths, but they are, in fact, the backbone of the American economy.
And they keep getting better. Over the decades, small businesses from a family-run pizza shop with 10 employees to a 400-person strong canning factory have grown with efficiency, innovation and a huge sales footprint. How did you do this? Short answer: technology. It can be said that e-commerce platforms, point of sale solutions, robotics or SaaS-based business applications, the democratization of IT and ubiquity have had a significant impact on the SMB universe. It’s not good to have anymore, technology has to compete even for the little ones.
And many of these companies know it. Consider the following: 62% of respondents in CompTIA’s latest research; SMB technology purchasing trendsToday, they say the use of technology is the primary factor in achieving their strategic business goals. In those critical efforts, 31 percent consider technology secondary, with only 5% saying it’s irrelevant. This is another unprecedented and difficult year of pandemics and restrictions, which will hit small businesses especially hard. (Note: CompTIA’s sample for this study defined SMB companies as having fewer than 250 employees.)
SMBs that have been playing primarily defense for the past two-and-a-half years are starting to dust off their offensive playbooks again. The pandemic of the past two years has had SMBs largely on their heels, doing their best to stay in business, avoiding layoffs and holding on to customers. But now, the business goals that were the top concerns in 2021 are hiring skilled workers and implementing new ideas, such as renewing or retaining existing customers and fending off competition.
What’s interesting is that this return to strategic thinking uses technology as a catalyst to achieve its goals. Last year, technology initiatives focused primarily on infrastructure, largely due to the remote work migration that many organizations experienced overnight. Equipment purchases for employees such as laptops, printers, and phones have become mainstream, as have collaboration, video, and communications/telecom solutions to better enable virtual work environments. When asked where they would allocate technology spending this year, respondents shifted from infrastructure purchase categories to innovation and workforce investments. For example, 28 percent of SMBs want to spend on technologies that boost innovation, compared to 19 percent in 2021, while on the human side they want to hire more technology workers and invest more in training and certification this year. It has increased significantly in 2021. Taken together, these objectives represent a step out of the loop for SMBs to weather the impact of the pandemic.
Overall, these more aggressive business goals seem to reflect more positive attitudes about the current state of their business. Three in 10 SMBs agree that their company is on track to grow revenue and profitability by 2022. This is 22 percent compared to last year. The majority of organizations describe their company’s health as continuing in terms of revenue and profitability, which is the same as last year (51% in 2022, 48% in 2021). The 19% net number who reported struggling this year is down from 29% in 2021.
Sounds like good news, right? In the summer of 2022, the global economy is somewhat optimistic about the gloom and doom issues. SMBs in the study are concerned about macroeconomic risks – continued inflation, potential recession, supply chain woes, etc. However, they seem to have adopted a more optimistic outlook, perhaps as the pandemic subsides in terms of the day-to-day impact on running their stores.
That optimism adds to their opinions on their companies’ current technology budgets. About half believe spending levels are about right, with a surprising 22% thinking they are too high. They don’t believe that a quarter of current technology spending is enough. The reality is that many of these companies’ strategic goals require greater investment in technology than some SMBs realize. Why don’t you know? The main reason is that the small segment of SMBs is often run by an on-staff IT team, which means many costs can be overlooked beyond the initial price tag of the technology. Those costs include training employees on new technologies, integrating new systems or applications into the broader IT environment, and/or additional work needed to ensure cybersecurity needs are met.
The gap between reality and actual spending needs is a persistent issue for SMBs that constantly monitor resource allocation. But if the strategic thinking about business goals and the role that technology plays in achieving them continues at the current pace, business owners will realize that the commitment to additional investments is the key to success and from another unexpected injury such as an epidemic.
(c) CompTIA
Note: This blog was originally published by: https://connect.comptia.org/blog/tech-buying-trends-smbs-pinpoint-technology-in-return-to-strategy
