The Internet of Things (IoT), virtual reality, and augmented reality are playing a more important role than ever for middle market companies, as this segment of the enterprise is no longer playing catch-up with technology but is instead viewing tech investments as ways to gain a strategic advantage over competitors, according to a Deloitte survey released today.
"IT is becoming less of an administrative or support function, and is gaining an important seat at the table, driving technology adoption, integration, and strategy," said Stephen Keathley, deputy chief information officer, Deloitte Services LP and national technology leader of Deloitte Growth Enterprise Services.
The survey, which was conducted in June and July 2016, polled 500 executives at US mid-market companies with annual revenues between $100 million and $1 billion. It revealed that 56% of respondents are currently building or have mature deployments for IoT in their business operations.
New technologies play an important role, with nearly 90% of respondents already using some form of virtual or augmented reality in their business, and 42% using demos or interactive tools to help improve employee and customer interactions with products and services.
The most common IoT application was smart hybrid cloud monitoring, which is technology that provides cognitive, contextual monitoring and data capturing. Half of the companies currently developing IoT projects said they are using this technology. A similar number of companies are using smart industrial devices such as environmental sensors, smart metering, and supply chain tracking, so devices can communicate with one another, according to the report based on the survey's findings.
The most common IoT applications mid-market companies are pursuing are those to track behavior, including business processes (47%), customer behavior (45%), and employee productivity (42%).
The report showed that companies are spending more on technology than in the past, with 19% of respondents reporting that their budgets are higher compared to last year. And they're looking further out with more than half (52%) of respondents saying that they are approaching technology investments for strategic value, up from just under 40% in the past two years.
In the report, Harvey Michaels, principal, Deloitte Consulting LLP, and National Consulting Leader for Deloitte Growth Enterprise Services, said, "Technology is becoming more of a differentiator in the middle market. At a strategic level, technology is helping smaller, growing companies scale faster and increase their valuations."
The evolution of cloud computing has laid the groundwork for this accelerated wave of emerging technology adoption, Keathley said. "As a result, more mid-sized companies are embracing the ingenuity of virtual and augmented reality and IoT to track business processes, anticipate customer behavior, and maximize growth."
Predictive and cognitive analytics are being used by more companies to gather insights into their customer base and help them determine customer relationship tactics and pricing decisions. 21% of companies said that mining information from their customers was the most critical contributor to value within analytics, up from less than 10% two year ago. Social listening, which means paying attention to social media commentary, is being used by 26% of respondents to monitor and understand customer sentiment.
Security was also mentioned in the survey, as it is a top technology priority for 36% of respondents who said that managing cybersecurity and information risk was a main concern. Cloud-based applications are being used by more companies to address their concerns over data security weakness, with 54% saying that security is one of their top three reasons for investing in cloud technology.
"Pervasive news of cybersecurity attacks and data security breaches puts companies on the defensive," Keathley said. "Reflecting concerns over hacking, payments fraud, and infrastructure risks, 52 percent of our survey respondents said they have plans in place to manage external information security threats. Companies should batten down the hatches to protect against security threats."
Overall, the report indicated that mid-level companies in the US are coming to grips with the reality that innovative technology is essential to business growth and plays a role in nearly every aspect of business not just now, but in the future.
The 3 big takeaways for TechRepublic readers
- Mid-level companies are realizing the importance of innovative technology as the key for future growth within their organization.
- Nearly 90% of mid-level companies responding to the Deloitte survey use some form of virtual or augmented reality.
- 19% of respondents say they are spending more on technology this year than in the past.
- International technical standards needed to accelerate IoT growth (TechRepublic)
- AT&T launches $99 IoT Starter Kit to push innovation to market faster (TechRepublic)
- The Power of IoT and Big Data (Tech Pro Research)
- Huawei and General Electric partner on industrial IoT (ZDNet)
- IoT hidden security risks: How businesses and telecommuters can protect themselves (TechRepublic)
Teena Maddox is a Senior Writer at TechRepublic, covering hardware devices, IoT, smart cities and wearables. She ties together the style and substance of tech. Teena has spent 20-plus years writing business and features for publications including People, W and Women's Wear Daily.