The future is moving fast and mid-market companies cannot remain stuck in the present or, worse, in the past. It is true: there are risks and challenges, but the opportunities far outweigh them. These include nothing less than improving operational efficiency, increasing team productivity, saving costs, and driving new revenues. All items that have a direct impact on profitability.

Several underlying factors contribute to the hesitance of medium-sized companies towards embracing new technologies, modernizing processes, or optimizing operations. Often rooted in a deeply ingrained culture of “we’ve always done it this way and it’s been effective”, coupled with apprehension stemming from uncertainty regarding the tangible return on investment. Moreover, there’s a reluctance to embark on the digital transformation journey, knowing it entails significant time, effort, and resource allocation.

Nevertheless, with the guidance and support of a proficient technology partner, these organizations can undergo a transformative process. By conducting a thorough evaluation of their current processes, infrastructure, and applications, they can formulate a coherent roadmap that aligns with their business strategy and, crucially, is feasible to execute.

Encouragingly, there’s a discernible trend of mid-market companies increasing their investments in technology. According to data sourced from a reputable consulting firm, 53% of such organizations allocate approximately 5% of their revenues towards software spending, underscoring a growing recognition of the importance of technological advancement in sustaining competitiveness and fostering growth.

A deep look

In the landscape of mid-market organizations, a multitude of business processes operate daily, numbering in the hundreds. These companies often rely on robust legacy systems that, while historically effective, now pose barriers to growth, hindering the adoption of cutting-edge technologies and integration with modern applications.

An illustrative case from this realm is exemplified by a project undertaken at Making Sense, where we embarked on the modernization journey with a medium-sized transport and logistics firm.
During our engagement, we encountered a striking example of outdated practices: a manual shipment preparation system. This involved labor-intensive data entry into spreadsheets and handwritten notes for drivers, affixed visibly within vehicles. By automating this process alone, we witnessed a remarkable reduction in losses. This transformation marked just the initial step on a path toward broader, more impactful modernization efforts.

Time to review everything

The need for comprehensive reviews is paramount in today’s dynamic business landscape. Companies evolve rapidly, yet the processes and systems underpinning their operations often lag behind, quietly slipping into obsolescence without the organization’s awareness.

This obsolescence carries tangible costs: dissatisfied customers, stemming losses from human errors or overlooked tasks, and expensive operational inefficiencies. Ultimately, these issues culminate in decreased sales levels.

The emergence of new technologies, such as cloud computing, process automation, and artificial intelligence, adds further urgency. It’s not merely about investing for growth and improvement but also about staying competitive and avoiding being left behind.

Research from the World Economic Forum underscores this urgency, revealing that even a modest yet strategic investment in AI among mid-market companies can facilitate rapid development and scaling, highlighting the transformative potential of embracing innovative technologies.

Seamless modernization

The advantages linked to modernizing processes and integrating new technologies into business operations are manifold:

• Enhanced operational agility, enabling quicker responses to market demands.
• Mitigation of errors stemming from manual data entry or heavily human-dependent processes.
• Elimination of bottlenecks that impede workflow efficiency.
• Early detection of inconsistencies or irregularities within workflows.
• Heightened employee productivity through streamlined processes.
• Overall improvement in efficiency, leading to cost reductions.
• Augmented organizational resilience, facilitating prompt reactions to market shifts or unforeseen circumstances.

The benefits extend further, but what’s particularly encouraging is that transitioning to this model of process optimization and continuous improvement can be navigated while controlling risks and scrutinizing return on investment at every juncture. When technological implementations yield rapid results, they set off a virtuous cycle, catalyzing new projects and expediting digitization efforts. This, in turn, enhances the company’s valuation by optimizing costs or opening doors to new markets unlocked by technology.

Step by step

The initial step entails identifying processes ripe for improvement or systems in need of modernization, followed by a crucial phase of prioritization. Determining which initiatives hold the potential for the greatest impact on the business, which ones could yield immediate results, and which ones should be initiated first is paramount.

Subsequently, crafting a roadmap for continuous improvement becomes imperative. This isn’t a one-off endeavor but rather an ongoing process requiring consistent evaluation, maintenance, and review.

The time to act is now. According to an annual study conducted by a prominent consulting firm, U.S. mid-market companies stand out as the most optimistic globally, with 70% anticipating an improvement in their business prospects in 2024.

Organizations that grasp the significance of innovation, process optimization, and technological modernization stand poised to catalyze this growth further, positioning themselves on a crucial trajectory in today’s demanding and competitive business landscape—one that increasingly drives profitability.