Technology is transforming nearly every industry and causing disruption that can create unforeseen challenges to a company’s business model. Consider the emergence of online marketplaces, which, because they enable people to list and rent vacation homes for a processing fee, are threatening traditional hotels, how smart phones disrupted GPS manufacturers, and how digital-native retailers forced traditional brick-and-mortar companies to rethink their entire strategy.
 
Here are a few common questions many business owners are asking, and our answers to them:
 
Q: What can companies do to prevent this?
A: Companies that ignore technology, rather than embrace its benefits, could find themselves disrupted by their competition and risk becoming irrelevant. Forward-looking companies are investing in innovation to simplify daily tasks, expand product offerings and enter new industries, and they are already reaping the benefits. Technology is helping companies unlock previously inaccessible working capital through just-in-time delivery, reduce counterparty risk through open account structures and get faster access to everything from business information to credit.
 
Q: Why should companies invest in technology?
A: For our clients, the key drivers are an increased need for fraud prevention, growing market share, expanding sales from a physical to a virtual footprint, and upgrading aging technology.
 
Q: What kinds of technologies are companies utilizing?
A: Currently, technology investments are spread across four key areas:

• Data management and analytics. Companies are investing in data management. Research firm Strategy Analytics reports we’ll have four internet-connected devices per person by the year 2020. All these devices generate increasingly more new information streams. The ability to harness and analyze this data to understand customers or market behavior is valuable for businesses.
• Cloud computing. According to market research firm IDC’s Worldwide Quarterly Cloud IT Infrastructure Tracker, about 30 percent of the overall IT market is spent on cloud technology, and it’s growing quickly. IDC forecasts that within the next two years, cloud spending will expand from 30 to 43 percent of the market. Cloud software and storage services allow companies to scale quickly, according to their needs, while reducing infrastructure and maintenance costs. Cloud services can create huge cost savings and greater efficiencies in short order.
• E-Commerce. Global tech company Pitney Bowes reported in its Global Online Shopping study that 76 percent of U.S. consumers are likely to purchase products directly from online marketplaces, and there is a growing number of millennials who use social media to influence their purchasing decisions. About 20 percent of CFOs said they were investing in e-commerce technology to reach and engage customers online.
• Digital payments. CFOs are also investing in digital payments, and we expect that to continue in the coming years. In fact, merchant payment revenue is expected to double in size in response to new digital payment solutions. Not only do digital payment options provide added security benefits, but they can also help increase sales and revenue. The digital payments category includes payment through mobile devices, chip technology and digital wallets like Apple Pay or Google Wallet. Advancements in sophisticated data encryption and authentication processes are driving growth and offering customers a solution they can trust.