What Kinds of Business Technology Should You Invest In?
As a mid-sized business owner or executive, you often walk a fine line when it comes to making business technology investments. You know that technology is essential to boosting productivity and maintaining a competitive edge, but there always seem to be other priorities when it’s time to allocate your limited budget and resources.
Putting off business technology investments and upgrades for too long can be a big mistake. If you don’t invest in the software needed to keep your financial and operating systems running smoothly, you risk falling behind your competitors that do. This can result in lost market share and lower profitability.
Survey Reveals Top Business Technology Priorities
Just as critical as understanding the importance of keeping business technology up to date is determining what kinds of software you should invest in. Recently, Capterra conducted a survey1 among mid-sized businesses with up to 250 employees to determine their technology and software purchasing priorities. The top-ranked category in the survey for software purchases was Finance & Accounting.
More than half of the survey respondents (54 percent) said that they have budgeted funds for Finance & Accounting software purchases over the next two years. Close behind were the categories of Cloud Computing (48 percent), Data and Information Security (47 percent) and Digital Marketing (45 percent).
Following is a closer look at each of these categories and why keeping these types of software and technology up to date is important for mid-sized businesses.
Finance & Accounting
Managing a successful business requires more than just manufacturing great products or delivering outstanding service. You also have to manage the business finances — and this requires modern financial and accounting software that’s robust enough to handle your business needs, based on your size and level of sophistication.
Financial and accounting software helps you manage your accounts receivable, accounts payable, sales and income taxes, reporting, and audits. Failure to invest in adequate financial and accounting software can result in cash flow problems, which in turn can ultimately lead to business failure.
In the Capterra survey, banking and financial services companies (68 percent) were the most likely to say they’re budgeting for Finance & Accounting software. They were followed by construction companies (64 percent), service businesses (55 percent), and manufacturers and wholesalers (both 53 percent).
Cloud computing and Software as a Service (SaaS) are making it easier for mid-sized businesses to benefit from the same computing power as large corporations. There’s no large upfront investment in capital or computing infrastructure, no physical implementation is required, and you benefit from pay-as-you-go pricing. With cloud computing, you get subscription-based access to vast amounts of data storage technology, along with robust business software capabilities.
In the Capterra survey, communication companies and banking and financial services businesses (both 53 percent) were most likely to say they’re budgeting for Cloud Computing software. They were followed by construction and transportation firms (both 50 percent) and service businesses (49 percent).
Data & Information Security
This has become more important for businesses of all sizes due to the many high-profile data security breaches that have occurred in the past few years. Research has indicated that cyberattacks can cost small and mid-sized businesses between $84,000 and $148,000 per incident, and 60 percent of these businesses fail within six months of a data breach.
In the Capterra survey, government agencies (61 percent) were most likely to say they’re budgeting for Data & Information Security. They were followed by construction and healthcare businesses (both 57 percent), communications and education organizations (both 53 percent) and media businesses (52 percent).
Many purchases nowadays start online, which makes Digital Marketing crucial for businesses of all sizes. This includes ROBO shopping — or researching online while buying offline — which is done by up to 88 percent of shoppers. Digital Marketing is especially important for helping mid-sized businesses compete on a more level playing field with much larger corporations and big-box retail stores.
In the Capterra survey, media companies (60 percent) were most likely to say they’re budgeting for Digital Marketing. They were followed by human resources firms and retail businesses (both 50 percent), government agencies (48 percent) and communications, construction and healthcare businesses (all 47 percent).
Mid-sized business owners often walk a fine line when it comes to business technology investments. You know that technology is essential to boosting productivity and maintaining a competitive edge, but there always seem to be other priorities competing for your limited resources. Just as critical as understanding the importance of business technology is determining what kinds of software you should invest in. An on-demand CFO partner from a CFO services firm can team with you to assess your needs and prioritize your software budget to make sure you’re getting the most bang from your technology bucks.
1 What Tech Your Small Business Peers Are Budgeting for in 2019; Anthony Bradley and Geoff Hoppe; Capterra.com; September 21st, 2018
Arthur F. Rothberg, Managing Director, CFO Edge, LLC