New research from Microsoft partner Advania has found that IT complexity is hindering mid-market organisations’ efforts to harness the full potential of new technologies.
The scale of the challenge is significant, with more than 81 per cent of mid-market organisations needing help scaling, updating, and future-proofing their underlying tech stacks in the Artificial Intelligence (AI) era.
This independent study by Censuswide, the largest of its kind, surveyed 966 mid-market IT decision-makers across organisations in the UK, Sweden, Denmark, Finland, Norway and Iceland.
A staggering 98 per cent admit to IT Complexity issues in their current tech stack, such as:
- Limited understanding of AI’s potential for their organisation
- Existing technical debt and confused budget spending
- Net-Zero knowledge gap
A third of the mid-market organisations surveyed, 33 per cent, believe they’re up the creek without a paddle when it comes to future-proofing their tech due to a lack of knowledge in AI. Even including those who don’t feel they’re in the dark about AI, a jaw-dropping 81 per cent feel unable to grasp the transformative potential of AI for boosting their operation’s productivity. Only 16 per cent can see how AI could help them build the long-term technical skills needed for revenue growth. This suggests most mid-market organisations are all at sea when developing a strategy for AI integration.
The report said business leaders are crying out for knowledgeable technical partners to help them successfully implement and adopt AI technology, envision the benefits AI can bring to their organisations, and support them in making the right choices for their business needs. Many are in the dark about the power of embedded AI solutions such as Microsoft’s Generative AI virtual assistant, Copilot for Microsoft 365. These AI solutions require minimal technical configuration, allowing business leaders to focus on driving adoption and usage to add real value to their organisation.
A critical headache for the mid-market is technical debt, the burden of work required to upgrade existing IT systems. When asked how they prioritise and remove technical debt, over half, 57 per cent, of mid-market organisations admitted they don’t regularly review and replace legacy systems. One in four also take a reactive approach to IT, waiting for issues to occur before they act. Ignoring tech debt worsens the impact and solution. It will inevitably cost more to fix later.
Within mid-market organisations, siloed teams can need more concrete guidance on where to invest fragmented budgets, resulting in confused or incohesive spending on technology. Budget constraints are a transparent barrier to innovation. Nearly a third, 30 per cent, of mid-market organisations, cite limited budget as the reason for their outdated technology infrastructure. However, when asked what they spend today versus what they would pay with an ideal budget, they would make the same decisions again, signalling that their priorities are right but that they’re strapped for cash and don’t know where it is best to allocate budgets to solve IT complexities.
Mid-market organisations with a finite budget require assistance prioritising their spending to repay technical debt effectively, which can act as a barrier to AI exploitation. Conversely, integrating AI can also contribute to the repayment of this technical debt. However, only 16 per cent of mid-market organisations recognise building the technical skills needed for long-term growth as a critical impact of integrating AI, leaving many unable to see or understand the benefits.
Finally, Net Zero commitments mean organisations cannot operate in a vacuum. They need to be aware of the effect of IT decisions on society’s sustainability goals—budget pressures and IT complexity impact broader strategic organisational objectives such as achieving Net-Zero.
Advania Chief Information Officer Nick Isherwood said the mid-market is smart and competitive, yet IT complexities are significant roadblocks.
“Many focus on one-time fixes when there are problems but don’t recognise the need to be set up for constantly evolving circumstances. The mid-market does not have the luxury of large IT departments and unlimited budgets to resolve these issues. This leads to them being unable to focus on other priorities like AI and Net-Zero; they’re distracted by their IT complexities. They follow official guidance on how much they should budget for cloud services, for example, but one size can’t fit all. Organisations must consider their specific needs, market, and contextual threats and flex their budgets accordingly. That’s where we add the greatest value.”
