Almost 40% of businesses in the UK consider high inflation, currently 2.4% above government's targets, as a major concern beyond their control, according to a recent Digital Health Study by Zoho.
These businesses are striving to recover from a slew of challenges, including mounting costs, disrupted supply chains, rampant inflation and the great resignation.
The study also showed that 68% of the businesses polled have curtailed their tech investment due to escalating interest rates from the Bank of England. Yet, they maintain plans to drive investments into key areas such as customer experience (CX), employee experience (EX), Artificial Intelligence (AI), and data privacy.
Despite tight budgets, businesses are recognising the importance and long-term returns in tech investments. As a matter of fact, 67% of the respondents reported that they are either using AI or are planning significant investments in it.
Furthermore, data privacy and protection are cited by 30% of respondents as top business priorities amid the continuous focus on tech adoption and integration.
Sachin Agrawal, Managing Director of Zoho UK, pointed out: “Business confidence has taken a beating over the past few years, which explains the existing concern about the stability of the UK economy."
"However, it is encouraging to see priorities shifting toward technology and data privacy as businesses focus on becoming more resilient. Companies investing in the right technology can expect a strong return on investment while others ignoring the importance of digital transformations could risk stagnation.”
Building further on the topic of technology adoption, Agrawal highlighted the need for businesses to consider customer trust while implementing tech like AI. This can help reap benefits such as automation, forecasting, and improved customer service. He underscored the need for right leadership style, company culture, and a focus on customers and employees as vital to fostering business resilience and innovation.
However, he raised concerns about the fact that only 19% of UK companies demonstrate good digital health, calling it a wake-up call for businesses to acknowledge the significant impact digitisation can have on their performance.
Agrawal added: “In an increasingly tough market, with heightened competition, customer and employee demands, and various negative external market forces driving economic stagnation, digitisation must be a priority. The risks are too high to ignore."
"As the UK strives for Tech Superpower status, 57 per cent agree that the government should provide more funding to businesses developing innovative technologies, indicating a clear need for further governmental business support."
The results come on the back of the latest economic update from the Office for National Statistics, revealing a 0.3% shrink in the economy in October.