The challenges of the COVID-19 pandemic pressured business continuity planning and pushed 60 per cent of small and medium businesses (SMBs) into “in survival mode”, according to a new IDC analysis that found over half of SMBs plan to spend more on technology this year as they fight to reshape and secure their businesses.
“The impacts of the lockdowns and work-at-home directives have delayed projects or initiatives,” said IDC Asia Pacific partner and vice president for cloud services Chris Morris, who said SMBs’ business resilience was also “put to the test” as last year’s operational challenges “exposed SMBs’ shortcomings in connectivity, support, security, and sourcing”.
Those shortcomings were yet additional challenges for SMBs forced to accelerate their digitalisation as they faced looming loss of access to markets and customers.
Many jumped into e-commerce almost overnight to ensure they could continue operating – with 52 per cent of Australian businesses accelerating their e-commerce transition due to the pandemic, Mastercard reported in a new survey of Australian SMBs.
Of these, 20 per cent committed to e-commerce operations within 24 hours of exploring their options, 44 per cent within three days, and 68 per cent within a week.
That pace of change – which saw SMBs embracing mobile wallets and other forms of digital payments – reflects the rapid decision-making necessary to pivot during the pandemic.
However, such change requires considerable investment in security that many SMBs weren’t equipped to deliver on their own.
“COVID-19 has challenged SMBs’ digital transformation journey beyond their capabilities,” said IDC Asia Pacific partner and vice president for cloud services Chris Morris.
“With digitalisation being the focus for ANZ SMBs in the next 24 months, these businesses will require tech and business professional services as much as technology itself.”
Securing the new normal
Efforts to support SMBs have driven a broad range of SMB support initiatives and learnings about digital security for companies worldwide.
Much of their additional spending will go to consulting and cloud providers, IDC predicted, as SMBs look for professional services to support their accelerated demand for digital transformation.
Businesses will increase IT spending substantially this year as a result, with 30 per cent of 1,210 surveyed ANZ businesses expecting that IT spending will grow by up to 10 per cent this year.
A further 16 per cent said they would boost spending between 10 per cent and 20 per cent, while one in ten companies will increase their IT spending by 20 per cent or more this year – a significant jump made even more so given the myriad pressures the pandemic has put on all businesses.
Those results corroborate new global data from Trend Micro, which – in a new Sapio Research survey of 2,565 decision makers in 28 countries – found 81 per cent of ANZ companies reported that the pandemic had accelerated their digital transformation.
Many local businesses were investing in cloud services as a key part of this change, although 55 per cent said that ensuring the security of the new environments would be a significant or very significant barrier to adoption.
Migration to cloud-based tools was being hindered by concerns about on-premises security technologies (cited by 43 per cent), data privacy (38 per cent), and compliance (28 per cent).
And while four in ten said the increased adoption of cloud platforms had increased their focus on security best practices, just 47 per cent of respondents were very confident in being able to secure their cloud environments.
Those results indicate “a clear disconnect in the understanding of the cloud shared responsibility model,” Trend Micro ANZ commercial vice president Ashley Watkins warned, “which could result in exposure to reputational and financial damage.”