According to a study conducted by IT management program merchant ManageEngine, IT costs are the biggest problem facing technology leaders in American medium-sized enterprises. As these organizations adopt more applications and increase their AI saving, this problem is anticipated to grow.
The Digital Intensity in Australia Study, conducted by study home Ecosystm for ManageEngine 24×7, found that some medium-sized companies, ranging from 200 to 1, 500 people, are still in the early stages of transforming into totally online businesses.
However, these companies are feeling the “digital power” of managing multiple fog conditions and an expanding number of applications. As more money is made for AI and data development in the upcoming years, this difficulty necessitates greater portability, which will probably increase costs.
Seven important findings were made from the study of 101 SME IT officials in Australia.
Cost reduction is the top priority for Asian SMEs.
Cost reduction is a top priority for IT leaders over the next year, according to more than half of the leaders ( 52 % ).
Business leaders were discovered to be seeking “growth without further cost” as a result of rising costs and higher interest rates in the American market, claiming that to improve performance, they should use tech optimization rather than spending more money.
49 % of respondents place a high priority on improving customer service and satisfaction.
SME modernisation: focusing on infrastructure and cloud
When asked to name three of their top priorities, a significant portion ( 54 % ) of SME IT leaders stated that infrastructure is at the forefront of their technology modernization efforts.
Following this, infrastructure modernization:
- ( 48 % ) Cloud architecture and strategy.
- Cyber security ( 43 % ).
- IT management ( 39 % ) and operations ( 39 % ).
- Disaster recovery and business continuity ( 36 % ).
Modernising infrastructure has moved from an “operational upgrade” to a” strategic necessity” to meet consumer expectations and accelerate digital transformation, the report said. Additionally, modernization efforts are being made to increase business value, particularly IT applications that were the main point of contact for employees and customers.
Over the next two years, SMEs will spend more on AI.
Within the next two years, AI spending is projected to increase from 0.2 % of IT spending to 2.5 %.
According to the report, SMEs should invest in more data management and processing capabilities as AI gradually adds to its level of technological complexity and data demands.
SEE: Australian SMEs are at risk of being forgotten about AI.
” As AI applications evolve, they generate additional data through interactions and outputs, further escalating data requirements”, analysis in the ManageEngine report stated.
” This surge in data needs advanced analytics tools, enhanced log management, and more dependable storage solutions, adding to the complexity of infrastructure management”.
Australian SMEs manage multiple cloud environments
Over half ( 51 % ) of SMEs are responsible for three to five cloud environments, while 14 % are in charge of ten.
” Five years ago, cloud solutions were primarily used by SMEs for data storage and non-core applications”, the report elaborated. ” Now, they’re central to digital transformation strategies, supporting AI platforms, big data analytics, and IoT integration”.
The report found:
-  , 34 % of SMEs managed one to two cloud environments.
- All SMEs use on average four cloud environments, according to  .
- In two years, SME public cloud usage could reach 58 % of total workloads.
SMEs expect to use a higher number of technology applications
Over the next two years, SMEs will need to deploy and connect more IT applications.
- 40 % expect between 1 and 5 new applications.
- 31 % expect between 5 and 10 new applications.
- Just 8 % are not expected to introduce any new applications.
Interoperability will be a key issue, according to the report because SME “applications need to be deeply integrated with each other to create seamless digital processes – not operate in silos.
Tech complexity preventing business agility and innovation
A majority of businesses ( 54 % ) named increased cost as a big challenge, stemming from increasing technology complexity. Other people mentioned the rise in security flaws ( 47 % ), poor scaling ( 38 % ), and maintenance and troubleshooting issues ( 37 % ).
SME technology leaders are challenged by the report’s assertion that the rise in digital intensity in organizations is” challenged.” ” The expanding tech architecture, with a proliferation of applications and diverse cloud usage, heightens the demand for IT support”.
SEE: In Australia, enterprise spending will increase in 2024 due to cloud and cyber security.
” Complexity results in higher costs, security risks, and scalability challenges, hampering agility and innovation. Troubleshooting becomes more difficult, leading to downtime and compliance concerns. Complexity can reduce employee productivity and compromise customer experiences.
Most SMEs are still in the early stages of digital transformation
A significant proportion (60 % ) of Australian SMEs claim to be in the early stages of their digital transformation journey despite a focus on infrastructure and the cloud and rising AI investment.
- 20 % described themselves as” traditional” businesses when asked to self-assess their digital maturity, traditional was defined as having only a rudimentary online business presence, operating primarily through traditional physical and in-person channels.
- Forty percent of businesses described themselves as “emerging,” defined as having a web presence, using social media for marketing, and using digital tools for internal processes.
Only 4 % claimed to be’ digital first’. Another 5 % said they were’ transformative’, or used technologies like AI and IoT, had a digital partner ecosystem and a digital first strategy.
SME advised to embrace digital while reducing digital intensity
The ManageEngine report found that, as the market grows more competitive, SMEs in Australia are being compelled to innovate, leveraging AI-powered insights and embrace digital tools.
SME tech leaders are facing challenges as a result of the surge in digital intensity.
” The expanding tech architecture, with a proliferation of applications and diverse cloud usage, heightens the demand for IT support”, the report reads. ” This complexity results in higher costs, increased security risks, and scalability challenges, hampering agility and innovation. Troubleshooting becomes more difficult, leading to extended downtime and compliance concerns. Additionally, technological complexity can lower employee productivity and undermine customer experiences.
According to Ecosystm, IT observability systems could aid businesses in increasing visibility and reducing digital intensity.
” By bringing together logs, metrics, traces and events with advanced analytics, tech teams can proactively pinpoint root causes, spot anomalies before they disrupt service and keep systems resilient”, Tim Sheedy, Ecosystm’s VP Research, said. ” Ultimately, IT observability allows organisations to deliver consistent digital experiences for customers, while also empowering teams to confidently explore new technologies”.