Global businesses rely heavily on tech to offset negative economic impact
Global companies have increased investments in technology to counteract the impacts brought by the COVID-19 pandemic and other market conditions, according to the 2020 Global Growth Index released by Epicor Software Corporation.
The report explores the growth trajectory of companies around the world and provides insight into how business leaders are using technology to support and drive growth initiatives. The index looks at the constantly changing state of growth in the manufacturing, distribution, retail and e-commerce industries along with key trends that impact the bottom line.
The Index highlighted that a significant portion of the companies surveyed for the report, have reported growth, with 71 percent reporting an increase in profits and 61 percent seeing an increase in market share over a 12-month period from April 2019 through to March 2020. However, growth projections for the next 12 months have been tempered given some of the challenges organisations have faced.
Not surprisingly, organisations reported Covid-19 (61 percent), China-US trade dispute/tariffs (29 percent) and environmental challenges (25 percent) as the factors most likely to negatively impact business growth over the coming year. To counteract these market conditions, investments in better technology (41 percent), working more efficiently (40 percent) and better planning (39 percent) were cited as levers that organisations can pull to overcome these business challenges.
The Epicor study found that cloud is poised to be a priority. It noted that cloud technology is set to be a key strategic priority, with one out of four respondents saying they will prioritise investing in it in 2020. When asked about key technology trends that are expected to be emerging over the next 12-18 months, cloud was chosen as the second most likely to have the biggest positive, direct impact on future industry growth.
The report then revealed that organisations see investments in AI and Big Data are paying off. AI is driving growth and proving worth the investment for most organisations, with more than 80 percent of respondents reporting that AI delivered business value in 2 years or less. According to 85 percent of total respondents AI was driving growth overall.
It also noted that Big Data analytics is driving growth and proving worth the investment for most organisations, by optimising operations (43 percent), increasing sales (44 percent) and improving profitability (45 percent).
“2020 has been a year characterised by significant disruption to organisations of all sizes and across most, if not all, industries. These disruptions have accelerated digital transformation agendas for many; the trends identified in the Epicor Global Growth Index confirm that businesses will look to technology and IT infrastructure to drive company growth in the next 12 months. This continued investment will be important for companies to maintain business resilience, adapt to global volatility, and stay flexible as the market changes,” said Andy Coussins, SVP and Head of International, Epicor.
Other key findings from the report include:
- Importance of skills and teams: Interestingly, respondents noted that in order to fully harness new technologies, organisations need to ensure they have the right skills and resources in house. Investment in staff training and education (40 percent), putting together the right team to manage processes (34 percent) and hiring of additional staff with new skills (33 percent) were cited as the top three critical success factors.
- Indicators of successful growth: 29 percent of respondents cited improved customer satisfaction and retention as the most important indicator of a successful growing business in their industry. This was followed by healthy margins and growing profits (22 percent) and an increase in brand awareness, marketing & advertising (22 percent).
- Increasing competitiveness: Most companies surveyed are using excellent customer service (51 percent), superior product quality (47 percent) and customer trust (45 percent) to increase company competitiveness.
- Impact on supply chain: Increasing global competition (41 percent), regulation changes (39 percent) and tax implications (35 percent) were cited as the top three factors that would most significantly impact the company’s supply chain.