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Digital transformation and the middle market
June 21, 2023
Joel A. Humphrey, CPA, CA shared this article
INFOGRAPHIC | June 21, 2023
It can be a massive project, such as creating an entirely new platform. Or it can be a simple procedure, such as upgrading an existing system. Or it can be anything in between.
Regardless of how one defines digital transformation, it’s clear that technology is changing how companies do business. According to data from the second-quarter RSM US Middle Market Business Index survey, midsize companies are well aware of digital transformation's power and potential.
Here are some key findings.
Companies are investing more
The middle market takes digital transformation very seriously.
Over three-quarters (77%) of all respondents said they plan to increase their information technology (IT) budgets in 2024.
A similar percentage (74%) of all respondents said digital transformation was the most important area or among the most important areas of investment for their companies.
Cybersecurity is a main driver
Rather than investing in new technologies, many companies are focusing on securing their assets and strengthening their IT environment.
Increased concern over cybersecurity was the top motivation respondents gave (65%) for changing their IT budgets.
Furthermore, almost one-third (32%) of all respondents said cybersecurity concerns are a big challenge to achieving their digital transformation goals.
IT talent remains hard to find
The labor market is still tight, at least when it comes to attracting qualified IT personnel.
In fact, 40% of all respondents said finding and retaining tech talent is somewhat or very difficult.
In addition, 29% of all respondents said the shortage of skilled IT personnel is a main issue when fulfilling their digital transformation plans.
Big companies are taking the lead
It might be no surprise that larger middle market companies (annual revenues of $50 million to $1 billion) are more invested in digital transformation than smaller companies (annual revenues of $10 million to $50 million).
While 56% of the larger companies said they have substantially achieved their digital transformation goals, only 27% of their smaller counterparts agreed with that statement.
Also, two-thirds of the bigger companies (66%) said they have a strategy to address their digital transformation goals, but only 41% of smaller companies said they have a similar plan.
AI is on the radar
The middle market is still trying to figure out what to make of artificial intelligence (AI).
Over half (51%) of all respondents said they currently use AI or machine learning in their businesses or plan to do so within the next 12 months.
Meanwhile, more than two-thirds (72%) have either tried, know someone who has tried, or discussed ChatGPT or other generative AI tools at work.
This content was originally published on RSMUS.com.
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