Investing in technology helps spur growth

James Barger, BridgeTower Media Newswires

Earlier this year, KeyBank conducted a survey of businesses with annual revenues between $20 million and $4 billion to uncover how they were planning to invest in 2018. More than 90 percent of respondents said they planned to keep their technology investment the same or increase it.

That companies are investing big in technology shouldn’t be a surprise. Technology can be a critical differentiator in a competitive market by helping business owners expand their relationships with existing clients, attract new clients, gain access to data that informs business decisions, improve operational and organizational efficiencies, and spark innovation and the development of new products and services.

The bottom line is this: technology is changing the nature of business. Those who choose not to invest in and embrace technological innovations risk being left behind. It is also why those who do invest at the right time, with a solid plan in place and a sustainable financial strategy, will own the future.

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How much — and where — to invest

According to the KeyBank survey results, 39 percent of middle market leaders stated they will allocate between 11 and 20 percent of their revenue to bolster technology. More than half of respondents are prioritizing obtaining a cloud computing/ infrastructure, customer relationship management systems, Internet of Things/beacons, artificial intelligence and app development.

These results are consistent with Gartner’s “Top 10 Strategic Technology Trends for 2018.”

Gartner states that “a strategic technology trend is one with substantial disruptive potential that is beginning to break out of an emerging state into broader impact and use, or which are rapidly growing trends with a high degree of volatility reaching tipping points over the next five years.”

For an example of this, we don’t need to look any further than the health care industry. Amazon, JPMorgan Chase and Berkshire Hathaway want to drive down costs by using technology to create a platform that can minimize administrative inefficiencies. Apple is planning to open clinics that focus on preventive care. Verily, part of the Google family, is looking into the managed care space. And Uber is looking to directly compete with non-emergency medical transportation with Uber Health.

What each of these potential disruptors share is the belief that our health care system can and should be better — that by lowering costs, becoming more efficient and underselling the existing market, they can each do well by helping health care consumers.
Investments in existing and new technology are core to their plans.

Local businesses with less ambitious plans may be wondering where to invest. The answer is relatively simple: solve an existing problem. For example, operating and managing your own IT systems can be expensive and complex. Cloud computing can help cut IT costs by reducing the need to purchase and maintain expensive equipment, hire and train staff, and consume energy. Cloud computing also supports business continuity by protecting data and allows for flexible work practices by making data accessible anytime and anywhere.

Customer relationship management systems help businesses by tracking interactions with customers and leveraging important data that improves marketing and sales. New technologies are changing the type of data businesses can access, as well as how they respond to this data. For example, a customer who has an interest in X can be targeted to receive information on a subset of products or information around that interest. Artificial intelligence (AI) and analytics will drive this further, so that instead of requiring direct actions from the consumer, computers will anticipate the consumer’s interests and actions to shape their experience.

Gartner predicts that over the next few years nearly every app and service will incorporate a degree of AI and analytics. These apps will transform workplaces by changing how people and systems interact. From advanced analytics to intelligent processes and sophisticated user experiences, businesses will be able to make more targeted decisions than ever before — all while delivering better client experiences.

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What next?

Again, the decision about where to direct your technology investments should be driven by identifying a current need, for either your business or clients.

Whether it’s a technology above or virtual reality, 3-D printing, cryptocurrency, chatbots or one of many other innovations that can spur your business to growth, the investment should align with your priorities and support short- and long-term goals.

When it comes to financing, seek a team of experts who understand your business goals, risk profile, financial strategy and priorities. They also need to understand the technology sector, following the hottest trends, biggest disruptors and potential downfalls so they can help your business grow.

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James Barger is president of KeyBank’s Rochester Market in New York. He may be reached at james_r_barger@keybank.com.