Cloud Technologies Offer Promise to Mid-Market Companies But Security Concerns Persist

Nearly four in every 10 mid-market (companies in the range of $50 million to $1 billion in revenues) executives say issues concerning data privacy and security risks are holding them back from moving to the cloud and making other key tech investments, according to a Deloitte report. In addition, security concerns are hampering IT adoption.

New technology solutions tied to the cloud and mobile are allowing mid-market businesses to boost back-office productivity, reach new customers, and reinforce their culture. These are among the findings of a recent Deloitte-sponsored survey of mid-market IT executives, who indicate they are either already tapping the potential of emerging technologies, or laying the groundwork for their adoption.

Mid-market companies are moving deliberately toward greater technology adoption, in many instances focusing on functions such as customer relationship management (CRM) and sales force automation (SFA). Even those businesses that are just investigating cloud services say they will begin their journey with sales and customer management business activities, rather than targeting more operationally critical functions such as manufacturing and finance.

Security of information is a concern for many mid-market CIOs, and it helps explain why their early deployment of new technologies has been limited to peripheral sales support functions. Nearly four in every 10 executives surveyed say issues concerning data privacy and security risks are giving them pause, and the issue is cited as the prevailing challenge in using cloud-based services. At the same time, change from within — specifically, employees’ use of mobile devices — is increasing the urgency for IT leaders to understand the security and privacy ramifications. Many of the companies we surveyed have yet to establish policies and procedures for remote access to data and smart phone use. As many larger companies have done, their mid-market counterparts will likely have to proactively work to mitigate such risks through organized assessments, development of plans and

As telling, perhaps, is the perception among mid-market companies that technology is or will soon be a key driver of those growth plans. Nearly half of the respondents — 46 percent — report that leadership values the role that technology plays as “strategic.”What is more, respondents at companies reporting revenue growth over the past 12 months are nearly twice as likely as those companies with decreased revenue to see technology as a strategic asset. Just over one in three points to technology playing an important role toward growth and effectiveness at their company, and that they have made a significant investment in IT. Almost half of the executives — 45 percent — say their company’s current level of spending on technology is higher compared to a year ago. The more value respondents place on technology at their companies, the more likely they are to be optimistic about the business outlook. Among those who are upbeat about their prospects over the next 12 months, 60 percent believe that technology can increase their organization’s overall competitiveness, compared to just 40 percent.

Other highlights of key findings include:

  • Technology is seen as a catalyst for growth and is now viewed by more business leaders as a worthwhile investment and a source of strategic advantage. Nearly half of those surveyed report their firms are spending more on tech this year than they did in 2012.
  • The advent of cloud-based technology offers more affordable alternatives for mid-market companies: 56 percent of executives say their organization is already using some form of cloud-based service.
  • Mid-market companies are leveraging mobile technology not only to better understand the wants and needs of customers, but also to increase workforce productivity and streamline business processes. Two-thirds of executives surveyed report that their company is either planning (34 percent) or has already developed (33 percent) at least one mobile application.



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