Middle-market companies readily admit that they aren’t prepared to compete as a plethora of digital transformations sweep across larger competitors in their industry verticals.
A Harvard Business Review article found that middle-market companies were twice as likely to acknowledge having below-average technological capabilities when compared to larger companies. The article also found that it wasn’t money that held them back—it was know-how. The companies surveyed were 25% more likely to admit to not having a top-down framework to accommodate digital disruption.
Middle-market companies exist at an intersection between scale and nimbleness, allowing them to quickly adapt to new landscapes in ways that bigger companies cannot. Still, technological transformation isn’t easy and there remain significant pain points to adoption and execution. From AI tools to analytics to cybersecurity, these areas demand specialized skills that often come with hefty price tags.
Technological Pain Points
Technology continues to evolve rapidly, most recently with the rapid adoption of Generative AI tools. Larger companies have embraced these trends. In fact, a McKinsey survey found that more than 50% of large companies have already adopted them to boost productivity in key areas like sales and marketing. Beyond AI, mid-size companies also face challenges with adoption of advanced analytics.
Beyond technology adoption hangs the specter of increasingly costly cybersecurity breaches and ransomware attacks. Analysis conducted by Getzler Henrich has found an uptick in company distress due to ransomware attacks.
All of these technology areas require specialized skills—which are hard to find and come at a high cost. This is especially particularly evident in the cybersecurity space. A Cisco study found that every dollar invested in privacy and security resulted in a $2.70 return, but speculative value delivered by an avoided breach remains difficult to balance against the cost of upfront investments. That being said, analytics and generative AI-enabled have allowed marketing and sales teams to enhance profitability, customer service, and cost efficiency. The novelty and rapidly changing landscape of these tools necessitates third-party providers who can
bring expertise in the latest technologies and processes. For mid-sized companies both healthy and stressed, this can become one more demand on a fixed pool of investment.
Finally, hiring a Chief Information Officer (CIO), Chief Technology Officer (CTO) or Chief Information Security Officer (CISO) can be quite expensive as well, especially considering that mid-market companies may only need an initial vision and planning to get started. A full time C-suite hire in a competitive landscape for tech leadership may not be the most prudent investment for any mid-market company, but the expertise is clearly needed to set the agenda.
The result of all of these trends? Mid-market companies lose out on tech that could accelerate their business.
Solutions Adapted to Mid-Market Needs
Rather than finding solutions that are made for bigger companies, mid-market organizations need to find expertise tailored to the middle market. Targeted solutions can have outsized effects on middle-market companies.
For example, together with Getzler Henrich, a mid-size manufacturing company used data and analytics to evaluate their product profitability, leveraging data from multiple systems. This new and innovative solution highlighted the high proportion of unprofitable products, allowing the company to prune its offerings and boost profitability by millions of dollars per year. The fee to build the analytics was less than a tenth of the annual savings.
These changes not only boosted productivity, but also enhanced collaboration among teams who now had a real-time view into data and progress. Ultimately, this technological change led to smoother operations, faster decision-making, and better outcomes for the company as a whole.
Getzler Henrich’s Advanced Service Offerings
A trusted name in mid-market advisory, Getzler Henrich’s Analytics, AI and Advanced Technology practice brings large enterprise services to the middle market that we know so well. This practice leverages deep technical expertise with decades of business experience, providing comprehensive solutions ranging from Business Intelligence Strategy to IT Cost Optimization, Interim Technology Leadership and Cybersecurity Assessment—all at a cost affordable to middle-market companies.
Adapting to technological change is essential to stay ahead of the curve. A carefully thought out and well implemented technology transformation strategy can be a force multiplier that accelerates and amplifies an organization’s mission while boosting profitability.
Getzler Henrich can be your strategic partner, ensuring that middle-market companies don’t miss out on the power of technology for sustainable growth and resilience.
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