Small businesses are doing some retail therapy in 2023, and the hot commodity of the season is software solutions. According to a new report from business software vendor and marketplace Capterra, small business software spend is trending up. Around 75% of surveyed SMBs say they’ll be spending anywhere between 10-20% or even more than 21% more on software than they did in 2022.
Where are these increased software budgets going? Capterra’s survey shows the majority of small business software spend is funneling toward solutions that bolster their IT architecture; 55% of surveyed SMBs rated security as their top priority when purchasing new types of software solutions, above software features and integration capabilities. And yet, the same survey also seems to show that, because of siloed purchasing decisions done by isolated IT teams, a majority of SMBs have buyer’s remorse over tech purchases made in the last year and a half.
Where should small businesses refocus their software spend in 2023 to maximize digitization, cybersecurity, customer service, and efficient operational needs? Are there any types of softwares that stand above the rest? Amy Czuchlewski, SVP of Technology at digital product strategy and design company Blue Label Labs, gives her strategies for small business software spend in 2023.
“I think it makes a lot of sense that small and medium businesses are investing in software into 2023. There’s a lot of factors that are affecting that, but I think first of all, internally, companies are looking at ways to invest in their employee experience and make that better.
There’s a lot of jobs, a lot of job availability, so they’re trying to retain employees and make that employee experience great through awesome software and awesome tools. They’re also providing a lot of virtual capabilities for employees to have either a work-from-home experience or a hybrid experience, but those things all require software investments as well.
Externally, I think the pandemic changed people’s behavior where digital experience may be the only touchpoint that you have with a customer. And so we see a lot of businesses really investing in that digital touchpoint. So be it a mobile app or a website, most companies are finding that they need some way to engage with their customers directly digitally. I also think there’s a lot happening on the security and privacy side. There continue to be breaches and things in the news, but that makes people’s customer behavior nervous and as a result, businesses and companies really need to invest into that security and privacy so that their customers feel comfortable doing business with them.
And then lastly, I think there are some baseline infrastructure-type things that also require investment in order to enable all of those things that I just talked about. Having server support and cloud and availability, like all of those things also come out of your software budget.”
Capterra isn’t the only one predicting a major upswing in small business software spend. Other metrics, like untapped market share for communications service providers, are also pointing to major revenue opportunities in the SMB market, further supporting the claim that SMBs are craving new software solutions and doing so with more intention. In a recent global survey by digital platform provider Beyond Now, 70% of SMBs reported a plan to purchase technology aimed at improving efficiency and preparing for the next wave of digitalization, while 51% of respondent’s recognized technology as “very-to-crucially” important for the success of their businesses. Paul Vigario, founder and CEO of dental IT and technology integration firm SurfCT, reiterates the unprecedented nature of this small business software spend trend, and offers his own advice for SMBs on how to spend their software budgets wisely.
“This is somewhat surprising considering we’re in a looming recession, and everyone’s talking about cutting costs. If small and medium sized businesses want to increase their efficiency and grow their business, they need to invest in the right infrastructure and in cloud technology like we provide here at SurfCT.
Now is the time to give clients and customers exactly what they want and what they need. Today’s consumers are becoming more accustomed to companies having what they want, when they want, effectively and efficiently, and that’s why we see small and medium sized businesses increasing their software expenditure, even though the economy isn’t looking so bright. These cloud technologies can provide benefits and new opportunities to small and medium sized businesses, but it’s a huge undertaking and owners need to look at their infrastructure and their goals and their vision for their business strategically to properly implement these softwares. When properly implemented, these new softwares will help you grow your business even in the face of an economy that might not be growing.
When implementing new software, business owners need to be aware of the challenges before the challenges turn into losses. These challenges include things like proper software implementation, team training, and above all security. How secure is your infrastructure? If you take all of this into account, you too can reap the rewards of implementing new software in 2023. Even when the economy might be challenged, your small business or medium sized business can still grow.”
Article updated 12.09.22 to add SurfCT’s Paul Vigario and his thought leadership.