Limited IT budgets and growing challenges in cyber security and data protection are increasing the risk of stunted company growth, according to a report from Kaseya.
Mid-sized businesses, those which spend approximately 5.5% of their annual revenue on IT, are at particular risk of underinvestment, as only 10% of this small investment is utilised to pursue strategic initiatives which help improve business efficiency and processes.
These businesses are potentially missing out on technological improvements which can greatly improve efficiency, processes, revenue, and, therefore, growth.
Global annual growth rates for mid-size companies were recorded at 8.5% in Q2 of 2019, according to the National Center for the Middle Market.
But increasingly, complex IT issues are emerging which are highlighting the constraints of IT departments, and could impact future growth.
Challenges faced by mid-sized businesses
Cyber security and data protection are the biggest challenges for mid-sized businesses when it comes to budgeting. Last year, 4.5 billion records were compromised worldwide, with the average cost of a data breach hitting $3.86 million.
Legacy IT systems are also an issue, and can have a knock-on effect on patch management processes and keeping security systems up-to-date. According to Kaseya, 89% of IT leaders admitted to using outdated applications despite knowing the security risks.
Risk of underinvestment
Without continued investment into IT departments, businesses may find themselves unable to capitalise on their market advantage due to complex issues such as cybersecurity and compliance risks.
Limited IT budgets have been holding companies back for years, however, with increasing reliance on IT to operate fundamental elements of modern-day businesses, the issue is starker than ever before.
Alongside limited IT budgets, a deficiency in IT resources produces an IT skills gap which negatively affects 80% of businesses, according to CompTia. With more employees skilled in IT, businesses would be more likely to identify technology which could improve areas of the business.
Smart investment
Problems can also arise with investment. It's tempting for IT directors to implement the latest innovations, such as Microsoft SCCM. For mid-size companies, however, this is an overly complex tool which would only result in stretching IT departments further.
Knowing how to invest is therefore just as important as the initial decision to invest. Increasing budgets may not always be the right answer, but for mid-sized businesses, allocating that wisely can make the difference between innovation and stagnation.
