UK Businesses Prioritize Cost Reduction and Technology Investments Amid Economic Challenges

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by | May 15, 2024

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Recent research commissioned by Daisy Corporate Services and conducted by LARATO has surveyed senior employees across various roles in 404 mid-market businesses throughout the UK. The study, carried out in March 2024, reveals a notable shift in strategic priorities, with a significant focus on reducing operational costs amidst rising economic pressures.

Strategic Shift Toward Cost Efficiency

The findings indicate a substantial increase in cost-conscious strategies among UK organisations, with almost two-thirds stating a planned focus on cost reduction for the current year. This marks a significant rise from 42% in 2023. Currently, nearly half (46%) of the surveyed organisations identify escalating costs as their primary business challenge, underscoring the urgent need for efficient financial management.

The study also highlights several key obstacles that hinder effective management within these organisations. Financial constraints are seen as a major barrier by 37% of respondents, followed closely by challenges related to legacy technology, cited by 31%. Cyber security concerns also remain prominent, with 27% of leaders acknowledging them as a significant impediment.

Enhancing Technology and Cyber Security

With the evolving digital landscape, UK businesses are prioritizing enhancements in cyber security measures, including resilience plans, with 32% of respondents focusing on this area. An equal percentage of leaders are concentrating on developing or refining their digital business models. Additionally, the importance of optimizing the technology supply chain is recognized by 76% of businesses, who consider streamlining these processes as important or essential within the next 12 months.

The survey further identifies key areas for technological investments in 2024. Cloud services emerge as the top priority for 63% of organisations, followed by investments in cyber security and mobile wireless solutions. The adoption of artificial intelligence (AI) is also gaining traction, with 37% of businesses planning to invest in AI technologies, recognizing the expanding range of applications and benefits.

Commitment to ESG Objectives

Apart from budgetary limitations, data security emerges as a considerable concern that could deter future technology investments, as noted by 45% of the survey participants. Additional factors such as a changing workforce and the ambiguity of benefits are other significant challenges that may impede substantial investments in technology.

Despite these challenges, the commitment to environmental, social, and governance (ESG) responsibilities remains strong among UK businesses. A significant 78% of organisations consider ESG commitments from suppliers as a high priority, with 46% actively extending the lifespan of devices through repairs and refurbishments.

Lyndsey Charlton, COO at Daisy, said, “Technology will continue to play an important role in helping organisations to become more efficient and meet their ESG goals. However, without a solid strategy underpinned by the right skills, organizations may fail to fully realize all the benefits. At a time where budgets are coming under increased scrutiny, it is vital that organisations work with trusted partners that can help them optimise and future proof their IT investments.”

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