Cloud Computing, Data Analytics Top 2012 Priorities for Businesses
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By Bill Gerneglia
America’s mid-sized companies are far more important to the U.S. economy than most people realize. A recent Deloitte survey titled “America’s economic engine” whose purpose was to provide insight into this often overlooked source of economic dynamism yields interesting insights. As a group, this segment employs more people than the entire S&P 500 and has total revenues equivalent to 40 percent of the U.S. GDP. This is a collection of companies that really leverages the latest in IT to drive profits.
Companies recognize the growing 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. According to the survey there seems to be a greater recognition of the benefits of cloud computing. In the Deloitte September 2011 survey, Cloud Computing was recognized as a distant fourth as a means to increase productivity. In the current survey conducted in March 2012, it nearly equaled data analytics and business intelligence in terms of likely investments.
Cloud computing really is a game-changer because it gives both small and midsized companies access to enterprise-class IT infrastructure without the need for the traditional large technical support staff to manage the installation and maintenance of the technology. For CIOs, the financial reasons for adopting cloud services are clear: Cloud Computing has the ability to actually change the way the tech industry itself is shaped as Cloud has changed the computer pricing model. An organization can potentially buy capacity on an as needed basis and pay for it as an operating expense instead of a capital expense. That has the effect of enabling innovation because you can build an application or launch a new service very quickly and deploy it even quicker. In addition, CIOs can now introduce leading edge cloud based business collaboration technologies to their organizations with minimal advanced project planning.
The study clearly shows cloud computing continues to emerge as an important investment priority for senior executives at midsized companies. When asked what types of investments companies were likely to make in technology, 40% of the respondents cited cloud computing. That is close to automation of business processes coming in at 46% and data analytics at 41%.
In terms of financing, most balance sheets are healthier than they were one year ago, with 35% of respondents predicting higher cash balances and another 55% predicting them to remain stable in the coming year.
While 90% expect capital investment to grow or at least remain stable in 2012, a substantially larger number of companies do not plan to secure financing this year (27% versus 14% in 2011). Companies appear to be more prudent by strengthening their balance sheets to take advantage of opportunities than they were in recent years.
The March 2012 Deloitte survey was conducted by OnResearch and polled 528 executives at midsize U.S. companies. Participating respondents included to senior executives at companies with annual revenues of between $50 million and $1 billion. Approximately 23% of the companies represented were public and the other 77% were privately held. About 76% of the represented business industries were spread across 18 different sectors.
The three largest sectors were professional and business services, retail and distribution, and technology accounted for a total of 24% of the respondents. This number reflects the real diversity of the industries in which the polled executives worked.
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