One way to reduce the overhead associated with hiring workers is to make efficient use of technology. According to a recent survey by CompTIA, 73 percent of midsize businesses and 56 percent of firms with fewer than 20 employees say technology is a primary factor in pursuing their business objectives.
According to the 4Q 2018 survey, the average small/midsize business (SMB) invests anywhere from $10,000 to $50,000 a year on technology. About half (52 percent) of small business owners think they’re not spending enough on business technology.
The largest share of small businesses (36 percent) say that in recent years they’ve focused their technology budget on infrastructure, such as laptops, desktops, servers, phones and storage. The second largest item in their tech budget was industry-specific software. Areas in which small businesses say they most need to improve technology include:
- Integrating different applications, platforms and devices
- Cyber and data security
- Managing and using data effectively
- Modernizing equipment and software
- Improving ROI on technology purchases
- Hiring skilled employees with experience working with newer technologies
One interesting find was that customer service is the biggest technology spending priority for SMBs going forward. Small business owners are looking to technology to help them renew existing customer accounts, identify new customer segments and markets, and innovate new products and services.
A new trend among SMBs is to use technology as a service or product that can be offered to customers. In fact, more than half (52 percent) of professional service firms such as accountants and lawyers introduced such a service last year. For example, an accounting firm might provide a cyber security audit or become a software reseller (buy at wholesale price and sell to customers for a profit). Among SMBs that have begun offering technology services, almost half say that revenue stream is growing faster than their regular business.
Preferred Tech Vendors
Where do the majority of SMBs buy technology? Pretty much the same places as individual consumers, namely online retailers such as Amazon and brick-and-mortar stores like Best Buy.
Priorities Compared to Two Years Ago
Another interesting finding from the study is that SMBs are not executing on their technology plans as well as they had hoped. The share of respondents who say they’ve achieved their vision and strategy dropped from 23 percent in 2016 to just 18 percent in 2018. The report asserts that, “Many firms are taking two steps forward and one back as they navigate these new learning curves.”
Despite their sluggish success, more than half (53 percent) of SMBs believe that emerging technologies, such as Internet of Things (IoT) devices, artificial intelligence (AI) and drones will drive opportunities for them in the future. Thirty percent of SMBs say they’ve already incorporated some form of emerging technology into their business to:
- Increase productivity: 63%
- Meet customer demand: 47%
- Enhance innovation: 42%
- Boost sales: 42%
- Differentiate themselves from the competition: 39%
- Avoid obsolescence: 22%
Still, some SMBs are hesitant to invest in emerging technologies. Ten percent think it will trigger a negative impact on their business while 23 percent believe it’s soon to project the potential impact, especially given the cost of entry, the technical training required, and the time it would take to identify high-quality and cost-efficient vendors or suppliers.
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