A new industry report reveals that mid-market organisations are making strategic IT investments a cornerstone of their growth strategies, even as they navigate what’s been a very turbulent global economic environment.

The Node4 Mid-Market Report 2025 paints a picture of an ambitious sector balancing immediate efficiency pressures with long-term transformation goals.

Below, we’ll take a look at the data from Part 1 of the report: Strategic priorities, growth potential and the current economic climate.

Overwhelming Majority Back IT Spend for Competitive Edge

Eight-four percent of mid-market firms report they are either increasing or maintaining IT spending levels, directly linking technology investment to their top strategic priorities:

• Business expansion and market growth (29%)

• Workforce productivity and skills development (26%)

• Sustainability and net zero commitments (26%)

The data reveals a sector determined to drive efficiency and competitiveness through technology, with significant investments flowing into warehouse management systems, finance platforms, retail ERPs, and order management tools.

However, the report sounds a cautionary note about the 16% of organisations reducing or delaying IT investment, suggesting some still view IT primarily as a cost centre rather than a growth driver. This perception may explain why 30% plan to reduce IT headcount to improve productivity – a move that could strain already pressured IT departments.

Diverging Priorities: IT vs Business Leadership

The report uncovers striking differences in how IT and business leaders approach efficiency challenges:

Top IT Leader Priorities:

1. Consolidating IT vendors/renegotiating contracts (38%)

2. Investing in automation/AI (34%)

3. Enhancing workforce productivity tools (33%)

4. Optimising IT and cloud spend (31%)

5. Outsourcing IT operations (30%)

Top Business Leader Priorities:

1. Enhancing productivity tools (32%)

2. Reducing IT headcount/hiring freezes (31%)

3. Addressing IT skills shortages (29%)

4. Optimising IT and cloud spend (28%)

5. Investing in automation/AI (27%)

The most significant disconnect appears around AI adoption, with IT leaders (34%) being notably more bullish than their business counterparts (27%).

The report suggests this gap stems from business leaders often viewing AI narrowly through the lens of generative tools like ChatGPT, while IT professionals recognise its broader transformative potential across operations.

Alarming Complacency on Cybersecurity?

Despite growing cyber-threats, the findings reveal worrying gaps in security preparedness:

• Cybersecurity ranks just 8th among strategic priorities (22%)

• Compliance sits even lower at 9th (19%)

• 31% of mid-market firms admit they’re not taking active steps to address cybersecurity threats

• 34% haven’t addressed evolving regulatory requirements

This complacency persists even though hybrid working models – cited by IT leaders as a major strategic challenge – are expanding attack surfaces.

The report warns that treating cybersecurity as “business as usual” rather than a strategic priority could prove costly.

The Talent Crisis Takes Centre Stage

Skills shortages emerge as perhaps the most urgent challenge:

• 78% of leaders are actively addressing IT skills gaps

• 79% expect progress within 12 months—the highest among all external factors

• Addressing skills shortages ranks 3rd for business leaders (29%) but 8th for IT leaders (25%)

This talent crunch is limiting progress across all strategic objectives, from digital transformation to innovation.

AI’s Puzzling Low Priority

Despite its transformative potential, AI adoption ranks just 9th out of 10 strategic priorities, behind even compliance.

The report identifies this as a critical blind spot, warning that mid-market firms risk falling behind competitors who better understand AI’s role in driving growth, productivity and efficiency.

Recommended reading

• Supply Chain Organisations Struggle to Future Proof
• Report: Cybersecurity Tops Tariffs as Q1 Priority for Supply Chains
• New Report Reveals Extent of Cyber-risk in Global Supply Chain

Andrew Warren, Chief Commercial Officer at Node4, issues a stark warning: “IT can no longer be a back-office function. It’s time to shift the narrative from support to strategy.”

Part 1 of the report concludes that mid-market firms face a pivotal moment: those who strategically align IT investment with business goals – particularly in AI, automation and skills development – will be best positioned to thrive when economic conditions improve.