Cloud Computing, Data Analytics Top Investment Priorities for Businesses

A Deloitte survey of midmarket businesses found they are interested in leveraging technology to improve business efficiency.

Midsize businesses are looking to specific IT investments to boost their businesses, and the larger the organization, the more likely it is to cite technology as having the greatest potential to increase productivity, according to the findings of a new survey of midmarket companies by Deloitte.

The study shows cloud computing emerging as an investment priority. When asked what types of investments companies were likely to make in technology, 40 of the respondents cited cloud computing. That's close to automation of business processes (46 percent) and data analytics (41 percent).

€œInterestingly, there seems to be a greater recognition of the benefits of cloud computing," the report stated. "In our September 2011 survey, it was recognized as a distant fourth as a means to increase productivity. In this survey, it nearly equaled data analytics and business intelligence in terms of likely investments.€

According to the report, companies continue to see the importance of technology. "They continue to prioritize automation of business processes, data analytics and business intelligence as triggers to increase productivity and areas where they are most likely to make investments in 2012,€ the report stated.

The report also touched on the areas of midmarket financing, hiring trends and general views on the state of the economy, finding the level of overall uncertainty perceived by the company€™s 2012 respondents was even higher than in a report they issued in September, when levels were already above normal. Growth and hiring expectations are more modest than they were last year, the report found, with businesses looking to leverage the talent they already have, as opposed to hiring new employees.

This year, only 14 percent thought the economy would grow faster than 3.5 percent, while last year, the figure was 20 percent. In addition, 34 percent of respondents anticipated growth at 2 percent to 3.5 percent, while last year the figure stood at 38 percent. The housing market topped the five obstacles to U.S. growth in 2012, followed by government budget challenges, health care costs, consumer confidence and the European debt crisis. Uncertain economic outlook (50 percent) and weak market demand (35 percent), remained the two largest obstacles to company growth, the survey found.

Among all the business industries, the survey found the technology industry to be the most robust. Although 48 percent of all survey respondents expected economic growth to exceed the median forecast of 0 percent to 2 percent, more executives hold this optimistic view in technology verticals (57 percent).

€œAlthough most mid-sized companies focus squarely on the U.S. market, many tech companies are looking outside North America for growth. They appear to be big acquirers of talent and they invest heavily in technology,€ the report noted. €œThey are often in the market for acquisitions. They are also more likely than companies in other industries to see employee defections.€

The March 2012 Deloitte survey was conducted by OnResearch, a market research firm, which polled 528 executives at midsize U.S. companies. Respondents were limited to senior executives at companies with annual revenues of between $50 million and $1 billion. Only 23 percent of the companies represented were public; the other 77 percent were privately held, and 76 percent of the represented business industries were spread across 18 different sectors; the three largest€”professional/business services, retail and distribution, and technology€”accounted for only 24 percent of the respondents.