Challenges with IT Costs in Australian Medium-Sized Enterprises
According to a survey commissioned by ManageEngine, IT costs pose the biggest challenge for tech leaders in Australian medium-sized enterprises. This challenge is expected to become more significant as these enterprises increase their adoption of applications and invest more in AI.
Key Findings from the Digital Intensity in Australia Study
The Digital Intensity in Australia Study, conducted by Ecosystm for ManageEngine 24×7, revealed that many medium-sized enterprises in Australia are in the early stages of transitioning into fully digital businesses. However, they are facing the challenge of managing multiple cloud environments and a growing number of applications, leading to increased complexity and pressure on costs due to new investments in AI and data.
Reducing Costs as a Priority for Australian SMEs
52% of IT leaders identified cost reduction as a major priority for the next 12 months. SME leaders are seeking ways to achieve growth without additional cost, focusing on productivity enhancements through technology optimization rather than increased spending. Additionally, improving customer experience and satisfaction is a priority for 49% of respondents.
SME Modernisation: Infrastructure and Cloud Focus
54% of SME IT leaders prioritize infrastructure modernization as part of their technology modernization efforts. This is followed by a focus on cloud strategy and architecture (48%), cyber security (43%), IT operations and service management (39%), and business continuity and disaster recovery (36%). Modernizing infrastructure has become a strategic necessity to meet consumer expectations and drive business value.
Expected Growth in AI Spending among SMEs
AI spending is projected to increase from less than 0.25% of IT spending to 2.5% within the next two years. SMEs are likely to invest in data management and processing capabilities as AI introduces additional technological complexity and data demands.
Management of Multiple Cloud Environments by Australian SMEs
51% of SMEs manage three to five cloud environments, with 14% managing up to 10. Cloud solutions have evolved to support digital transformation strategies, including AI platforms, big data analytics, and IoT integration.
Expectation of Increased Technology Applications Usage by SMEs
SMEs anticipate deploying and connecting more IT applications in the next two years. 40% expect between 1 and 5 new applications, while 31% anticipate between 5 and 10 new applications. Interoperability will be a key challenge as applications need to be integrated to create seamless digital processes.
Impact of Tech Complexity on Business Agility and Innovation
Increased technology complexity has led to challenges for businesses, including higher costs, security vulnerabilities, poor scalability, and troubleshooting difficulties. This complexity hampers agility and innovation, leading to downtime, compliance concerns, and reduced productivity.
Stage of Digital Transformation in Most SMEs
Despite a focus on infrastructure, cloud, and AI investment, 60% of Australian SMEs consider themselves to be in the early stages of digital transformation. Only a small percentage identify as ‘digital first’ or ‘transformative’ in terms of their digital maturity.
Recommendation for SMEs to Embrace Digital Transformation
SMEs in Australia are encouraged to innovate and leverage AI-powered insights and digital tools to stay competitive. However, managing the resulting digital intensity poses challenges for tech leaders. Implementing IT observability systems can help businesses gain visibility and address these challenges effectively.
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