Economy Drives Midsize Companies to Work Smarter, Leaner: IBM Study Reveals Top 5 Trends

A new study by IBM of midsize organizations in 17 countries shows that companies have not been deterred from their plans for strategic IT initiatives, which range from information management and security management to social media and cloud computing -- despite a clear recognition of the need to cut costs in a difficult economy.

Conducted in April - May 2009, IBM's "Inside the Midmarket: A 2009 Perspective" study reveals five key trends:

1. The highest-priority technology solution, chosen by 75 percent of respondents, is Information Management, which turns mountains of data into meaningful insights

2. The most pressing business challenges include increasing efficiency and productivity (80 percent), improving customer care (74 percent) and better use of information (72 percent)

3. The impact of the economy on IT budgets has caused 53 percent to actually increase or re-prioritize their spending, with 37 percent reporting a decrease

4. Despite the economy, more than two-thirds of those surveyed are planning or currently implementing their top IT priorities

5. A majority of firms view their primary IT provider as a technology advisor or IT and business consultant, with 25 percent seeing the relationship as purely transactional

Information management was ranked as the most critical IT priority for improving business performance by the largest majority of participants (75 percent). At a time when digital information is growing every day at a rate eight times the volume housed in all U.S. libraries, organizations need smarter ways to cope with today's increasing information overload by turning this data into real intelligence.

Not surprisingly, 83 percent of midsize companies say improving efficiency is a key priority. Enhancing customer service and prospecting for new customers are also high on the priority list, however (74 percent). A third set business priorities center around improving business agility and decision making, with close to three out of four study participants giving high priority to improving their ability to predict market trends.

Despite the current economic environment, an unexpectedly large percentage of organizations are rethinking, not reducing, when it comes to budget. A total of 53 percent report that their IT budgets are actually increasing (14 percent) or remaining the same but with changing priorities (39 percent). Ten percent report no change, while 37 percent are reducing their budget. According to study data, most are holding or increasing their budgets to use IT to help drive efficiencies or reduce costs in other areas of the business or better connect with customers.

In spite of the current economic climate and concerns about barriers to successful implementation of IT projects, more than two-thirds are planning or currently implementing their top IT priorities, led by Infrastructure Reliability (75 percent), Disaster Recovery (72 percent), Information Management (71 percent) and Security Management (68 percent).

This year's survey also illustrates the growing role of emerging technologies, such as cloud computing, green IT, and social media -- areas that were not even included in a similar IBM study conducted in 2007. While lower on the scale of critical priorities, midmarket companies are actively pursuing several emerging technology areas to improve performance. The survey shows that 79 percent intend to implement, have established goals, or have started/completed implementation of Green IT solutions, followed closely by social media/Web 2.0 (71 percent) and Cloud Computing (69 percent).

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