UK firms focus on cuts (including IT) amid rising financial pressures

New research from Daisy Corporate Services (Daisy) reveals that almost two-thirds of UK organisations are focusing on reducing costs this year as financial constraints increasingly affect their operations. Notably, nearly half (46%) of businesses report that the pressures of rising costs represent their primary concern.

The study, which surveyed over 400 IT and business leaders, found that financial constraints (37%), outdated technology (31%), and concerns over cybersecurity (27%) were the most significant obstacles to successful business leadership. The results depict a landscape where cost-reduction is a central priority alongside digital transformation strategies that can offer new efficiencies and opportunities.

"IT and business leaders are acutely aware of the challenges posed by rising costs. While concentrating on cost savings, organisations are also seeking to build long-term resilience to future proof their operations. Many are examining new digital models and looking to enhance their cybersecurity posture, but this must be done in a cohesive and cost-effective manner," stated Lyndsey Charlton, COO at Daisy Corporate Services.

When it comes to investment priorities for 2024, cloud services take the lead, with 63% of organisations planning to invest in this area during the next 12 months. Additional key areas of interest were cybersecurity (47%), and mobile and wireless solutions (40%). As the role of artificial intelligence (AI) expands, over a third (37%) of organisations are also identifying AI technology as an investment priority.

However, budget limitations are not the only factor hindering investment. Nearly half (45%) of the respondents cited data security concerns as a significant barrier to making technology investments this year. Changing workforce structures (36%) and unclear benefits (33%) also emerged as important considerations preventing organisations from making substantial technology investments.

Despite the cost-reduction emphasis, the research found a significant commitment from organisations to environmental, social, and governance (ESG) responsibilities. Over three-quarters (78%) of businesses consider ESG commitments from suppliers a high or very high priority, and 46% stated that they aim to prolong the lifespan of their devices by repairing or refurbishing as necessary.

"Technology continues to be crucial in supporting businesses to become more efficient and meet their ESG goals. However, without a strategic approach supported by the requisite skills, organisations could miss out on fully reaping the benefits. In an era where budgets are under heightened scrutiny, working with trusted partners to optimise and future-proof IT investments is of utmost importance," further added Charlton.

The survey was commissioned by Daisy Corporate Services and conducted by LARATO in March 2024. The survey participants included senior employees such as CEOs, CFOs, CIO/CTOs, Heads of IT, IT managers and COOs at 404 UK mid-market businesses.