According to LBMC’s Business Outlook Survey conducted in January 2021, companies are most likely to manage their technology by improving the performance of existing systems. This still rings true for what we are seeing as companies enter 2022.
High growth companies were twice as likely to add new systems than no growth companies, while no growth businesses were more focused on replacing existing systems and outsourcing technology support. The report defined high growth firms as those that achieved at least a 20% annual revenue growth over the period of the study. In aggregate, however, the firms that met our high-growth criteria far outperformed this 20% threshold. Average growth is 1-19% revenue over the previous year.
Over the past year, businesses have been investing most in cloud-based and business intelligence technologies and we see this continuing through 2022. Forty percent of companies planned to invest in technology & software throughout this year and we don’t see this changing for while longer. Of those who plan to prioritize technology in 2022, over half expect to invest in cloud-based solutions.
The speed at which technology is changing is accelerating exponentially. Features such as machine learning, artificial intelligence, business analytics, and mobile enablement are no longer only available in enterprise level solutions targeted at Fortune 500 companies. There are many software applications that have this functionality at price points appropriate for small and midsized businesses. Having timely information, visual representation of trends and potential risks, and the increased operational efficiencies that AI and machine learning provide results in lower costs and/or increased profits.