Those of us who spend too much time immersed in technology sometimes get out of touch with what is really going on, so it was with some interest that I looked at the responses to a recent survey conducted by Sage Software . The results were definitely not what this self-confessed techno-nerd expected.
Sage, with thousands of manufacturing customers worldwide using its business management software, is a true specialist in the mid-market, and its survey respondents came overwhelming from companies with less than $100 million in revenues. What drew my attention was a question that asked where customers were most likely to spend their money in the next year. The results were sobering: Technology didn't even make the top three.
The first order of business for Sage's customers, according to the survey, is to spend more on marketing. Number two is employee salaries, and number three is training. Not far behind, but definitively in fourth place, is our old friend technology.
At first blush I was a little shocked to see marketing at the top of the list, insofar as the prevailing notion of a small to mid-sized company is one of close-knit markets, established relationships, and word-of-mouth referrals -- not to mention a distinct allergy to spending on such luxuries as marketing.
The more I spoke with Sage's customers, the more I realized that a little marketing is becoming a hard-and-fast requirement. Competitive pressures have pushed these companies to be more proactive not only in reaching existing customers but in finding new ones. Old-boy and old-girl networks just don't cut it in an increasingly global economy; some new ways of scaring up new business need to be explored. And that means doing what used to be unthinkable: more marketing.
Indeed, putting technology in fourth place shows a remarkable maturity and sense of strategic purpose for these companies. By first working to increase their markets, hire better-qualified workers, and then train them even better, Sage's customers are setting the stage for a much more successful adoption of new technology than most.
It's such a promising formula for small to mid-sized technology adoption that it ought to be engraved in stone somewhere: Pave the way for technology to do its best work before you actually try to acquire any.
One more interesting result from the survey: When Sage users were asked where they were having problems with their IT investments, integration was clearly number one, as it is for the rest of the industry. But problems relating to staff downtime came in a close second, a clear reflection of the fact that technology problems have a particularly painful effect on small companies with limited bench-strength in the IT department.
Several of the customers I talked with confirmed this point, and it wasn't about Sage or any other provider. There is a well-justified fear in small and mid-sized companies about the adoption of new technology because of its potentially broad negative impact. While big cost and time overruns can be absorbed by the Global 1000, they can run a small company right out of business.
In the end, the biggest expense facing these companies isn't technology, and yet the impact of technology spending is one of their biggest challenges. It's a refreshing reminder that technology is frequently the problem, and not always the solution.