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Small, Midmarket Businesses Recognize Importance of Digital Transformation but Struggle with Limited Resources

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Insight Study Shows It Leaders at SMBs See Digital Transformation as Essential to Growth but Seek Guidance as They Navigate Cloud Implementation, Security and Workplace Expectations of Digital Natives

In today’s business ecosystem, staying ahead of the technology curve is imperative to competing in the marketplace – but it’s an area where small and midmarket businesses (SMBs) are struggling, according to the inaugural Insight 2020 Technology Report: IT Trends for Midmarket and Small Business, a survey of more than 400 IT professionals at independent and emerging businesses based in North America conducted by Insight Enterprises, Inc.. Chief among these challenges is keeping up with an increasingly dispersed workforce without sacrificing outcomes or security, transforming IT as the business grows, effectively migrating to the cloud, and struggling with outsourcing overload as requirements grow.

“IT leaders understand that, in a limited resource environment, there is inherent tension between what needs to get done today versus what needs to get done tomorrow”

Across industries and organization sizes, operations have gone digital – and employees are no exception. SMBs, like their larger counterparts, have been swift to embrace employee expectations of choice, connectivity and self-service. More than half (55%) of SMB IT professionals say the employee technology experience at their organization resembles a consumer-like model very or extremely well. Another 55% say their IT is very or extremely effective at enabling remote working.

That said, challenges remain for SMBs moving towards an “anywhere, anytime, any device” model for getting work done: 66% of IT professionals estimate their workforce encounters delays or worse-than-expected outcomes on projects at least five times per week due to ineffective collaboration tools.

“Organizations that do not allow for employee choice and flexibility when it comes to where and when they work are behind the times,” said Brenda Hudson, vice president, inside sales, Insight. “But that doesn’t mean it should be a free-for-all. Businesses, especially mid-sized and smaller organizations, need to invest meaningful resources in structuring flexible IT policies to ensure that outcomes don’t suffer. Unfortunately, we’re seeing SMBs stumble as they work to navigate a growing universe of devices and collaboration tools.”

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Additional findings from the Insight 2020 Technology Report: IT Trends for Midmarket and Small Business include:

Legacy systems and processes are slowing innovation.

One of the most acute problems SMBs must solve is modernizing their IT operations overall without faltering on day-to-day operations.

The study finds that although almost all (95%) IT professionals at SMBs have implemented or plan to implement within the next year digital transformation initiatives, nearly half (49%) say integrating new technology with legacy systems is very or extremely challenging.

Additionally, when attempting to equip their businesses with the latest technology, 45% say understanding which new technologies to invest in ranks among the top three challenges they encounter; 44% point to budget constraints.

IT professionals see significant opportunity for improved outcomes by embracing digital innovation. The top three areas of their business that would benefit from digital transformation are customer experience, operational efficiency, and workforce productivity and collaboration.

Growing businesses are sold on cloud but struggle with full adoption.

Survey respondents say cloud is the top technology that will most impact their organization’s future growth, followed by cloud-driven technologies like data analytics, artificial intelligence and the Internet of Things.

However, migration and implementation remain challenging for SMBs. Two key obstacles these organizations’ IT departments face when moving infrastructure to the cloud are cost and security. Comparing cloud costs to current costs is the most frequently cited barrier to migration (56%), followed by governing and addressing evolving security requirements (cited by 50% of respondents). Meanwhile, 65% of respondents say security and compliance is a primary challenge when it comes to cloud implementation.

Added Ed Schuber, Insight market leader, Northeast: “A common challenge for midmarket and small businesses is cloud utilization. All too often, we see businesses make missteps from the start when moving critical application and development operations to the cloud. Setting up an organization for cloud success begins with clearly defined strategic goals, proper onboarding, ample end-user support, and a means to monitor cloud consumption to ensure the greatest optimization of these investments.”

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Vendor overload may be contributing to inefficiency.

Commercial businesses lean heavily on outsourcing to keep the IT engines running. However, the study suggests that organizations are not making the best use of these vendors – either because they have too many, or those vendors are not equipped to meet their specific needs. 41% of survey respondents report using anywhere from six to 10 IT vendors, with an additional 24% using more than 10.

Many find themselves encountering hurdles when engaging with service providers. IT professionals have found the following factors to be “very to extremely” challenging when working with vendors:

  • Customizing solutions to business needs and objectives (44%)
  • Coordinating internal and external resources on complex IT projects (43%)
  • Vendors cater more to larger enterprises (43%)
  • Asset managing and juggling licenses from multiple providers (40%)
  • Vendors do not understand small business needs (40%)

“IT leaders understand that, in a limited resource environment, there is inherent tension between what needs to get done today versus what needs to get done tomorrow,” said Steve Dodenhoff, president, Insight North America. “There’s also a fear that innovation will cause disruption – and not the good kind. But the very technology problems SMBs fear can be solved by investing in innovation. It needn’t be ‘today or tomorrow’. IT operations and investments should be ‘today and tomorrow’.”

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