Tech early adopters are also predicting growth and job creation, Epicor annual report finds.
Some 94% of mid-sized essential businesses in the United States are adopting cloud this year, up from 25% that declared cloud a strategic priority in 2020, a new report finds. Further, 75% of mid-sized businesses expect to be fully recovered from the impact of COVID-19 by 2022, while 61% expect to expand in size and scale over the coming three years, according to Epicor Software's annual insights report.
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The study surveyed leaders from midsize businesses (with revenues between $20 million and $250 million) across the manufacturing, distribution and retail industries on the drivers of business growth over the coming year. The survey found the nation's most essential business leaders are not simply gearing up for a "bounce back" year but are leaning into the accelerating forces of COVID-19 to "leap forward," Epicor said.
The report paints an optimistic picture for businesses over the next few years. Fifty-five percent of respondents said they expect to create new jobs, and that figure jumps to 63% predicting new job creation among businesses already on the cloud.
From cloud consideration to adoption
A key takeaway from this year's study "is the sea change in attitude toward cloud as a critical business accelerant. Leaders have moved from consideration to adoption,'' said Steve Murphy, CEO of Epicor, during his keynote address at the annual customer Insights conference.
"While the companies who make, move and sell what is most essential to economic growth may be all aboard the cloud train, the data suggests their implementation needs vary vastly," Murphy said. "This is no longer a 'why move' conversation but rather a 'how to move' to gain advantage."
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Respondents are looking to the cloud for prescriptive business purposes that deliver measurable results, according to the report.
For example, 94% believe the cloud will help future-proof their businesses, and 82% accelerated their cloud migration plans because of COVID-19.
Key drivers cited for moving business solutions to the cloud were improved security (34%) via encryption, multi-factor authentication and 24/7 monitoring, and quality control (32%).
The top five perceived obstacles to cloud migration
Respondents were asked about what barriers might exist to cloud adoption. Number one was security and risk mitigation (e.g., malware, internet connectivity for on-premises) (33%), followed by total cost of ownership (29%) and time to implement and ability to customize to unique business needs (27%).
Other factors cited were data loss/sovereignty (26%) and internet outages (24%).
When asked what would make them feel more comfortable about the journey to the cloud, the top two responses were help with data backups (52%) and access to specialist migration teams (48%).
Bullish on business acceleration and tech
Another key takeaway is that leaders of mid-size businesses across the supply chain are bullish about growth fueled on investment in Industry 4.0 technologies, the report said.
There was an overall positive business outlook with 68% predicting growth among businesses who are already mostly/all on the cloud. The retail (73%) and manufacturing (65%) industries were the most optimistic about expansion, according to the report. The distribution sector fell below the survey average at 48% predicting expansion.
The businesses surveyed did not regard themselves as playing digital transformation "catch-up," according to the report. Nearly three-quarters (71%) categorized themselves as first or early tech adopters.
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Further, 91% cited that technology is critical to achieving their business expansion plans. To stay ahead of the technology adoption curve, 72% of businesses are updating their IT solutions within six months, and 21% in near real-time–meaning 30 days or less. This compares with just 22% who review annually, the report noted.
Some 88% of respondents are already actively mining their customer data to improve outcomes using segmentation, targeting, microanalysis and predictive modelling. And it is paying off, with 80% of essential businesses rating themselves as competitive or leaders in their industry, the Epicor report said.
Hurdles to business success
The biggest challenges facing their business respondents ranked:
- The pace of technological change (49%)
- Cybersecurity concerns (49%)
- Market volatility (37%)
Adversely, geo-political tensions (23%) and commoditization (23%) ranked bottom of the worries table, the report said.
Connectivity remains an issue
There is still a need to even the playing field with regard to stable broadband access among essential businesses, the report said. This is based on the fact that 24% of respondents are still ranking internet outages as a genuine business concern—highest among the retail sector (29%).
Additionally, 58% of all respondents have experienced internet outages, and one in 10 businesses (9%) still don't have a stable internet connection, which discriminates against their ability to move to cloud-based solutions, the report stated.
The online survey of 1,250 IT decision-makers in the U.S. and 1,000 in the U.K. along with interviews, were conducted from Feb. 22 to March 11, 2021, Epicor said.
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