Small Business Technology Trends

Belts Tighten while IT Budgets Grow

Against the backdrop of broader financial uncertainties, some companies are cutting costs. However, while reviewing fixed and variable expenses is a smart strategy, technology investments continue to grow. According to SWZD’s 2023 State of IT survey, 51% of organizations planned to increase their IT budgets in 2023. Overall, budgets are expected to grow around 13% year-over-year in 2023, with a median increase of 5% at the company level.

Companies are investing for a variety of reasons. Some are reducing staff and looking at technology to help close the gaps. Others are retaining their staffing levels and looking for ways to increase productivity. The addition of technologies such as self-service, automation, and customer experience investments can also turn into competitive advantages that help companies thrive in competitive environments and stand out against the competition.

No matter the core motivation to invest, one thing is for certain: research from Accenture confirms that companies that invest in technology during difficult times perform up to five times better than their competition. As a result, even companies that are strategically paring their spending are keeping technology at the center of their investment plans.

Technology Overcomes Staffing Challenges

Today’s small businesses are operating in a complex labor market. CFO Magazine reports that according to the latest data available, layoffs and other staff adjustments have continued to increase. At the same time, many businesses are facing other kinds of talent challenges. Forbes reports that 40% of small businesses are struggling to attract new employees for key roles, and 21% are concerned about retaining their current staff.

Many companies—especially in the technology area—are meeting staffing requirements by partnering with experienced outside firms that can help meet key needs without adding to overhead. According to the State of IT survey, managed services and outsourcing are playing a critical role in helping companies meet staffing challenges. These areas comprise 18% of budgets, which is an increase over 2020. Many firms are also relying on freelance partners and staffing platforms to meet their tech talent and other needs.

Automation and Efficiency Top Technology Priorities

Technologies can be a powerful asset for businesses that are focusing on improving their automation and efficiency. Not only can technologies empower customers to do more, but the right ones can help free up staff to get more done. Over half of small businesses (53%) are focusing on automation and self-servicing technology investments, according to Forbes.

From behind-the-scenes investments in tools that can monitor network traffic for security issues to customer-facing portals that make it easier to resolve simple requests, the right tools can alleviate significant workloads. Automation also helps companies keep pace with changing technologies. Forbes reports that 84% of companies are investing in technologies to help future-proof their businesses.

Hybrid Workforce Drives Key Investments

During the pandemic, companies that didn’t have remote or hybrid workforce models in place rapidly shifted to them. While many organizations are bringing employees back to the office for at least part of the time, the need to continue supporting a hybrid workforce continues to grow. In part, that’s driven by top talent’s key preferences. One study found that 87% of workers looking for a new role want remote or hybrid opportunities.

Investments to support hybrid and remote workforces vary, from updating conference room technology to ensuring that at-home setups support maximum productivity. Many leaders continue to find ways to support efficient real-time collaboration, with 60% of executives expecting to spend more on virtual collaboration tools in the year ahead. There’s also an emerging trend to ensure that remote and hybrid workers are productive no matter where they’re working. The demand for employee monitoring software was 57% higher in 2022 than in 2019, and this category is expected to continue to grow.

Emerging Technologies Drive Business Outcomes

From artificial intelligence to super-apps, new technologies are emerging that have the potential to dramatically change the way that we do business. For small business leaders deciding what to invest in, there’s an emphasis on technologies that drive key business outcomes such as increased efficiency or a better customer experience.

One area that’s driving significant interest—with the launch of widely available tools such as ChatGPT and Google Bard—is AI. It’s estimated that 37% of companies today use AI in some capacity, and that number is expected to skyrocket in the next 12 months. Research from PWC highlights this initiative, noting that 41% of technology leaders cite AI and data analytics skills as the most in-demand talent at their companies.

Companies are also investing in areas to increase the efficiency of their technology and streamline performance, with 41% of small businesses investing in cloud computing and 31% investing in managed services and hosting. When in-house teams are too lean to implement new technologies that can support digital transformations, partners offer critical extensible capacity.

Which Technology Trends Align with Your Business Needs?

The right small business technology can keep your business growing throughout 2023. Technologies are helping businesses keep pace and shore up their bottom line against unknown future challenges, while laying the foundation to deliver unforgettable customer experiences. Contact Connection today to speak with a small business technology expert and discuss the right technology for your needs.