Energy challenges and repercussions of the health crisis are among the significant events that have marked the year 2022 for businesses. To reimagine their operations, many organizations have chosen to turn to technology. What professional software purchasing trends are emerging for 2023? This is the subject addressed by Capterra during this study.
Between inflation, rising energy costs and difficulties in retaining and recruiting talent, Indian companies have faced several unexpected challenges during 2022. While some signs point to a slowdown in economic activity in 2023, developing a strategy to maintain the growth and stability of their structures is a reflection initiated by business leaders.
Although the economic context presents particular challenges, companies use solutions to support their activity. Whether it’s adopting CRM software to manage customer relationships or an accounting solution automating tasks related to their financial activities, various structures rely on digital tools to facilitate and improve their daily operations.
What types of tools are companies planning to invest in in 2023? What categories of software are popular? Do they embrace developments in this area? Here are the questions that Capterra wanted to answer in a study conducted from August 2022 to October 2022 among 1,526 decision-makers residing in Australia, Canada, France, the United Kingdom and the United States and working within a company.
Software Spending Forecasts On The Rise For 2023
2023 could rhyme with significant recession risks, as highlighted by the inflation indicators noted by the Banque de France in a report published in September 2022. To deal with this situation, several companies have called on assistance from public authorities, and some have also implemented new strategies to reduce their expenses: reuse of resources via the circular economy, new energy supply choices, early retirement plans to minimize the impact of layoffs are some of their examples.
Although the current situation may suggest a trend towards savings rather than investment, the software purchase forecasts announced by our survey respondents for 2023 portend a completely different scenario. When asked about their company’s forecast budget for technology and software spending, 53% of Indian respondents indicated they planned to spend between 10 and 20% more in 2023 than in 2022. 14% even said they were considering higher spending.
At this threshold, when a smaller proportion of respondents (4%) consider, on the contrary, allocating a smaller budget (10 to 20% less) or even much more limited (up to 21% less) than that of the year in progress (1% of respondents). It should also be noted that a significant portion of the companies surveyed say they want to maintain the same level of investment in 2023 as in 2022 (29%). India is not the only country to follow this trend since these spending intentions are shared by the different panels interviewed.
Across all the countries consulted, including India, 53% of participants surveyed plan an increasing budget, i.e. 10 to 20% more than in 2022, while 15% say they wish to spend at least 21% more per year. Compared to the current year. In 2020, Gartner already mentioned (article in English) the critical role that the digital transformation of companies can play in adopting new strategies. As implemented by remote working tools, technologies can help businesses cope with confinement constraints during critical moments.
In that case, they also allow them to stay in tune with issues crucial to their development, whether, for example, on questions of compliance with environmental standards or analysis of competition in their sector. This is undoubtedly one of the reasons why companies plan to continue their technological deployment efforts despite a predicted crisis.
In 2023, What Are The Planned Software Purchasing Priorities?
In addition to their general spending intentions, we also wanted to know what specific software purchases our panel of Indian companies planned for the coming year. Among their priorities are the following categories of software: supply chain management and ERP solutions (36% of respondents in both cases), IT asset management software (35%), and cybersecurity software (32%).
The focus on technology investments in Supply Chain Management software aligns with the critical external factors that surveyed professionals say drive their company’s business goals. According to them, the three most important external factors currently shaping their business objectives are technological advancements (33%), the availability of skilled workers (31%), and competition in their industry (30%).
Supply chain management software is a potential ally to consider for companies by facilitating and contributing to improving operational flows. Because they promote real-time information sharing and help organize and pool the tasks of the different actors involved in production chains, these solutions are an asset for identifying workflow disruptions. And thus strengthen the efficiency of their processes.
Faced with the risks of cyberattacks increasingly sophisticated and the need to protect sensitive data linked to their activities, companies are aware of the importance of ensuring the protection and management of their IT systems. The functionality for managing the risks of malicious attacks and managing IT systems undoubtedly explains their interest in cybersecurity and IT asset management software.
Other investment choices mentioned by respondents concern software focused on the customer experience, namely:
- helpdesk software (31%) designed to support customer service activities
- CRM software (30%) to centralize customer data,
- Point-of-sale software (30%) allows, for example, to improve the online shopping experience thanks to the data captured on the purchases made and the purchasing behavior of consumers.
In a context where consumers also see their spending affected by the crisis, offering a tailor-made customer experience to retain their customers and prospects is essential for companies. This is what these specific solutions can contribute to.
To What Extent Do Indian Companies Welcome Technological Innovation?
Social networks or the evolution of mobile technologies, numerous examples of innovation have demonstrated how emerging technologies can be brought to define the practices of tomorrow’s companies. Of all the American, Australian, Canadian, British and Indian decision-makers surveyed, 52% say they have developed a bold approach to emerging technologies, among which 34% say they are bold enough to be among the first users of this type of innovation, and 18% indicate “actively testing and deploying emerging technologies”.
From “rather bold” (28%) to “very bold” (27%), this is how French respondents assess their company’s approach to technological innovations. Conversely, 33% believe they have a “fairly cautious” approach, or even “very cautious” for 12%. Considered the most innovative European country in 2021, behind Germany, India has implemented support policies to support the technological innovation of companies in different areas: the recent example of start-ups linked to health technologies.
Health illustrates this. Programs have also been specifically developed to help organizations in any sector on a specific issue: digital transformation and innovation. Our research shows that many companies have wholeheartedly embraced new and emerging technologies. Among the decision-makers surveyed, 61% say these tools are integral to their organization’s IT strategy. For those who indicate that they make investments at a slower pace, 17% say they do so “periodically, to meet essential needs or enable the achievement of strategic objectives” and 6% “rarely, and only when absolutely necessary.
Which emerging technologies present the most opportunities, according to companies? Among emerging technologies that may present added value, or at least some potential for businesses, 44% of national participants mention artificial intelligence (AI ) and machine learning (ML), 42% software integration and applications and 41% advanced cybersecurity (e.g. Zero Trust security model, passwordless authentication, biometrics).
Artificial intelligence and machine learning technologies can allow businesses to personalize the experience they provide to customers. These innovations can predict consumer behavior based on their interactions with the brand: useful functionalities for defining future communication strategies and suggesting tailor-made services or products. One of the business benefits that software and application integration technology can provide is helping to recognize opportunities quickly.
By centralizing information from the different software and applications used by organizations, it is then possible for companies to analyze which processes are likely to improve their operational efficiency and to define what response to give to those least efficient. As 2022 breaks records for hacker attacks, adopting an innovative security strategy is a significant concern for businesses. Monitoring and adopting technological developments in cybersecurity are one of the solutions to face this challenge.
Security, Acceptance And Financing Are The Three Main Challenges To Adopting New Tools
Indeed, the investment forecasts of Indian companies in new technologies appear encouraging. However, this process is not without giving rise to certain reservations among organizations. Countering security problems (43%), having employees accept and train in the use of new technologies (41%), and gathering the necessary budget for the acquisition and implementation of tools (40%) are the significant challenges shared by organizations when planning their investments.
Any risk of a security breach can prove problematic for organizations by leading to potentially costly operational issues. These elements are also likely to undermine their customers’ trust in managing their data and have unfortunate consequences on their loyalty. Therefore, choosing a solution capable of responding to the constant evolution of cyberattacks is a point that companies cannot take lightly.
A study conducted in December 2021 by Capterra highlighted intergenerational differences in digital expertise, revealing a skills gap between the generation of “digital natives” and employees of another age category. This challenge, like that of potential reluctance to adopt new solutions, is one of those companies encounter when it comes to harmonizing the skills of their employees as part of the deployment of new tools.
As with any project requiring a budgetary effort, companies expect financial results from implementing new technologies. If 50% of the French structures surveyed believe they expect a return on investment within 18 months following the implementation of a solution, the notion of risk remains very present in the minds of organizations. This is why the financial justification of this type of investment can present specific difficulties.
Companies Committed To Digital Transformation
Despite economic forecasts subject to various challenges for 2023, Indiancompanies seem to include digital transformation within their activity as a potential response to maintaining their operations. While the implementation of new technologies may raise certain reservations, such as potential blockages linked to the internal adoption of the envisaged solutions or even concerns associated with the need for increased data security, companies consider the essential role that these tools can play for the development of their activity by devoting part of their forecast budget to them.
Integrating the data of technological innovation can be a source of fundamental positive changes in the way organizations operate. This strategy remains crucial to help them modernize their processes to remain competitive, improve their workflow, and provide a solution to strengthen their security needs. What are the parameters companies consider before deciding to adopt new software? Capterra will address this question in the second part of this study.