By Toni Boger, Content Strategist, Content4Demand
Medium and midsize businesses used to live in the shadow of their bigger competitors when it came to technology and best practices. They lacked the deep pockets needed to refresh and maintain the latest in hardware and software, and their employees were too focused on running the business to worry about best practices.
Cloud technology has leveled that field so that every business has equal access to the latest advanced technologies and up-to-date business systems—and all the benefits that come with them. Highly productive sectors such as manufacturing have invested heavily in technology for decades. Now, cloud can speed adoption of productivity-boosting practices so that business sectors with traditionally low productivity can move faster.
These opportunities are documented in the report, “Don’t get left behind: The business risk and cost of technology obsolescence,” prepared by the MIT Technology Review. The report is based on research about cloud’s impact on productivity.
The researchers found that the diffusion of technology best practices available through the cloud potentially helped all companies, regardless of size, to catch up with the leading edge in their industries.
Two examples of the equalizing force of cloud are automation and artificial intelligence (AI), which sometimes occur together but not always.
Workflow automation in the back-office can help midsize companies make the most of their often-limited headcount by freeing up time and brainpower for growth-focused work. At the same time, once these processes are automated, they can scale quickly so that midsize businesses in high-growth markets can keep pace with their larger competitors.
As an example, let’s take a closer look at the democratizing benefits of automating finance workflows with cloud enterprise resource planning (ERP). One benefit is fewer human errors and rework, which means an accounts payables team of two people can have the same accuracy rate as a department of 20 people. Another is the elimination of data and process siloes, which slow down task work and suck up valuable time and brainpower. But when finance data is managed, refreshed, and secured in one place with automated processes, everyone is then working from and has access to a single, up-to-date set of company numbers. These factors speed up decision-making, improve productivity, and encourage collaboration.
Cloud also can be a pipeline for bringing AI into businesses, whether through infrastructure services, development tools, or embedded in business apps. AI is bringing new capabilities to business processes and technology, such as voice-driven assistants and prescriptive analysis. Medium companies don’t need to wait at the end of the line to use these capabilities, and they don’t seem to be.
Constellation Research conducted a survey of 50 C-level executives about their AI budgets and programs. The majority of respondents were from companies with annual revenues of less than $500 million.
Constellation found that most are building applications in-house. But most of these organizations also are using cloud-based machine learning and deep learning services to run homegrown applications, and close to half were adopting cloud applications.
In general, leaders at midsize companies feel as if they are keeping up with technology advances and that these advances are making them more productive. 2019 research by Deloitte Private’s mid-market company practice found that 43 percent of respondents are spending more than 5 percent of revenue on technology. This is up from 28 percent who reported the same in 2016—a 15 percentage point increase over three years.
About half of those Deloitte surveyed said that technology disruption is enabling new ways to interact with clients and is speeding up the pace of transactions and business interactions.
This optimism is a good sign for the middle market because, as the MIT report underscores, cloud is making it easier for companies of any size and industry to be more competitive.
Midsize companies are finally out of the shadows of their larger peers. Cloud is making lots of new models and capabilities available to any business ready to make a change.