A recent study by Advania, a leading Microsoft partner, has uncovered a significant challenge faced by mid-market organisations in Northern Europe.
The research, conducted by independent firm Censuswide, surveyed 966 mid-market IT decision-makers across the UK, Sweden, Denmark, Finland, Norway, and Iceland. The findings illuminate a pervasive sense of neglect and overspending within this market segment.
Overspending Woes and Vendor Perceptions
Undervalued and Overspending: The survey highlights a stark reality for mid-market organisations, with 90% feeling overlooked by tech suppliers. Alarmingly, 31% suspect that tech vendors favour larger enterprises. This sentiment is particularly concerning given the current economic challenges faced by mid-sized organisations, including rising insolvencies and increased borrowing costs.
Lack of Strategic Spending: Despite the awareness of overspending, mid-market organisations struggle to identify areas for cost-cutting in their IT budgets. The study reveals that, when asked how they would ideally spend their IT budget, most respondents would change almost nothing. This underscores a critical gap in strategic spending and cost optimization within the mid-market.
Neglect and Outdated Tech
Transactional Relationships: A significant portion (24%) of mid-market executives perceive big tech suppliers as offering transactional relationships rather than supportive partnerships. This neglect translates into tangible consequences, with 29% believing their vendors provide products rather than tailored solutions. The mid-market is grappling with outdated software, with 31% facing challenges in maintaining obsolete systems.
Tech Ecosystem Challenges: The mid-market’s struggle extends to managing its existing tech stack efficiently. With 32% overspending on inflated licensing fees and 29% lacking customised options for smaller budgets, the tech ecosystem appears fragmented and inefficient. This scenario drains resources and hinders progress for mid-market organisations.
Scaling Problems Beyond Budgets
Futureproofing Challenges: A significant concern identified is the perceived lack of futureproofing in the mid-market’s tech stack. Thirty percent of respondents cited a lack of budget to scale up, hindering their ability to adopt technologies crucial for future growth. Additionally, 23% face difficulties convincing their boardrooms of the long-term benefits of digital transformation.
Skills Gap and Staff Retention: Scaling up requires not only financial resources but also internal education and skills development. The study reveals that 26% of the UK mid-market believes there is a lack of skillsets to achieve scalability within desired timeframes. Compounding this challenge is the fact that 98% of mid-market organisations struggle to retain excellent IT staff for more than two years.
Dan Coleby, Director of Client Technology Value, Advania, commented on the findings, stating, “Our research sheds light on a perceived disconnect between mid-market organisations and big tech, meaning many are failing to realise the transformative potential of big tech solutions. Bundled products and services can streamline operations, optimise costs, and accelerate growth for mid-market companies.”
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