Properly allocating resources is a key move for growing businesses, and SMBs are increasingly turning to tech in their spending.
How a company spends its money can make or break the organization. Increasingly, how a company spends its money on tech can determine its future opportunities and whether or not it will be able to keep up with competitors. This is especially true for SMBs.
"Spending money on business software is often not on the list of what you want to do. But these technology investments can be absolutely critical to competing in your market," Capterra noted in a recent report. "It's important to know what companies like yours are buying and how much they're investing, or you risk falling behind."
To get a better idea of how smaller businesses are allocating their budget for software and tech, Capterra surveyed 700 SMBs about their 2019 and 2020 purchasing plans. Here are the top 10 tech budget priorities for those SMBs, and the percentage of respondents who listed it.
- Finance and accounting software - 54%
- Cloud computing - 48%
- Data and information security - 47%
- Digital marketing - 45%
- HR software - 43%
- Project management - 40%
- CRM - 38%
- BI and analytics - 35%
- Mobile business - 33%
- Internet of Things - 26%
In the report, the authors explain how good financial practices are key to keeping an SMB afloat and giving it room to grow. As such, the authors call finance and accounting software an "SMB staple."
SEE: SMB best practices: Templates for creating estimates, invoices, and billing statements (Tech Pro Research)
The highest average spend on this software came from the transportation industry, which spent $56,000. "If you can only invest in one technology in the coming two years, that technology should be finance and accounting software," the report said. "Our survey indicates that small and midsize [businesses] recognize these facts."
Cloud is the second most-budgeted-for technology, and it offers SMBs a unique opportunity to access the same power offered to Fortune 500 companies by way of platforms from Amazon Web Services, Microsoft Azure, and Google Cloud, the report said.
Data and information security rounds out the top three technologies as cyberattacks ramp up across small and large businesses alike. It's important that SMBs realize regulations such as GDPR apply to their business as well as major enterprises, the report noted.
The big takeaways for tech leaders:
- Finance and accounting software is the most budgets for tech product by SMBs, with 54% of companies planning to invest in it. — Capterra, 2018
- The transportation industry is investing the most in finance and accounting software, with an average spend of $56,000. — Capterra, 2018
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