America’s mid-market and private companies’ paths to technology modernization may profoundly affect their ability to attract talent, according to a new Deloitte Private 2021 Technology Trends report, “The Middle Market Technology Divide.”
Deloitte Private surveyed 500 mid-market executives from companies with annual revenues ranging from $250 million to more than $1 billion for the report.
“Organizations of all sizes are making considerable investments in digital transformation — from cloud-based architecture to machine learning. Many of these investments were underway before the COVID-19 pandemic and have now been accelerated,” said Jason Downing, vice chairman, Deloitte LLP and U.S. Deloitte Private leader. “Connected technology’s intersection with the workforce will likely continue to be the common thread across mid-market and private companies’ expansion of customer- and employee-facing capabilities.”
Additional findings from the Deloitte report include:
Digital workforce and talent shortages create urgency for new technology
In this year’s survey, more than half of all respondents (52%) expect to redesign jobs and tasks to make it easier for people and machines to work together. Among all executives surveyed, 44% expect digital disruption to create job-related changes in operations over the next 12 to 18 months, with those from larger organizations expecting the highest impact (72%).
“Companies, regardless of size, that invested in and deployed foundational technology early on and prior to the pandemic tend to have the edge, and we are starting to identify nuances in approach and execution in this next chapter,” said Chris Jackson, managing director, Deloitte Consulting LLP and Deloitte Private technology leader. “While smaller organizations are enabling their workforces through technology, larger organizations have a much sharper focus on artificial intelligence and technology augmentation as they redesign job roles for even greater productivity. This, combined with more flexible working arrangements, may allow early adopters of advanced technology to compete more aggressively to retain and attract talent.”
Cyber and IT security concerns switch from external to internal
In the 2019 survey, external cyberattacks ranked as the top data privacy and security concern among respondents, but this year, the survey revealed the opposite, with employee-introduced risk — such as mishandling of confidential data — ranking as respondents’ top cyber threat at 49% compared with external threats at 41%. Both larger and smaller organizations share concerns about remote work. Among smaller firms surveyed, 31% cite mobility and remote work as one of their top three data privacy and security risk issues of concern. Meanwhile, 68% of surveyed firms with over $1 billion in revenue are concerned about employee-introduced risk as a result of working from home.
Consolidating the human-digital relationship
In the Deloitte Private survey, companies’ reasons for adopting technologies designed to be more human-centric in their use and customer interaction vary by industry. For example, executive respondents from the life sciences and health care industry were about twice as likely as the next-closest industry to believe things like robotic process automation (RPA), machine learning and cloud integration would give their workers the greatest advantage over the next 12 months. Across industries, respondents were also highly focused on the employee experience (44%), ranking it as the most important area to be affected by digital disruption in the coming year.
When it comes to building workforce capabilities, a majority of firms rank skills related to robotics, AI, and cognitive analytics as primary focus areas, with more than half (53%) of respondents from financial services firms most likely to cite these capabilities. Finance executives surveyed were also more likely (57%) than those from any other sector to anticipate redesigning tasks to make it easier for people and machines to work together.
Smart Manufacturing a key area of divide
For the first time, this year’s survey analyzed the smart manufacturing capabilities of private companies. The survey found the larger firms more likely to prioritize new smart manufacturing facilities (73%) compared with the smaller organizations, which lean toward retrofitting existing ones (58%). More progressive companies also reported being the furthest ahead in quality sensing and detecting — using various data sources to get ahead of quality issues faster and earlier in the value chain.