Tech Budgets Rebound as Technology’s Role in Navigating COVID-19 is Realised

In BICSI Blog, BICSI Bytes, Featured, Newsby info@bicsi.com.au

IDG’s recent CIO Pandemic Business Impact Study, revealed that IT budgets are rebounding. According to the results, although cost control/expense management remains top of mind, organisations are realising the necessity of technology solutions to enable them to steer the business during these turbulent times.

The study explored organisations’ digital business mindsets due to the pandemic, the technologies they need to succeed in these regards, and when/how they expect a return to the office.

In March, when the pandemic first hit organisations, there was undoubtedly some concern with how IT budgets would change year-over-year. Another of IDG’s reports – CIO COVID-19 Impact Study – reflected that uncertainty with 35% of organisations expecting their IT budgets to decrease in the next 12 months (up from just 7% in December 2019).

The good news is that budgets are swinging back as organisations realise the value and need of new technology solutions. ISG’s latest results show that 41% of organisations anticipate their IT budgets will increase in the next 12 months, 35% expect them to remain the same, and only 23% anticipate a decrease.

Supporting this budget growth is the fact that 59% of IT decision-makers (ITDMs) say that the effects of the pandemic are accelerating their digital-transformation efforts. Also, 54% say they are adding new technology projects to their 2020 roadmap to create a competitive advantage given shifts in their industry due to COVID-19.

“As organisations continue to drive business, address customer needs, and support their workforce in these challenging times, it’s inevitable that new technologies and solutions will need to be evaluated and put in place for companies to evolve,” said Sue Yanovitch, IDG’s VP of Marketing. “Whether it be additional collaboration tools, security controls, or analytics programs, many IT leaders are having to shift their processes and roadmap due to great disruption.”

While IT leaders are seeing their digital transformation efforts accelerate due to COVID-19, this aligns with CEOs’ top priority for IT which is to lead digital business/transformation initiatives (36%). From the April 2020 results, this priority has remained in the top spot, tied with improving remote work experience (36%), and followed closely by upgrading IT and data security to boost corporate resiliency (28%). Looking at where IT leaders are spending more time compared to three months ago, they may be moving past their initial conservative reaction and regaining a strategic focus. For example, 29% say they are driving business innovation, up from 26% in April; and 27% say they are spending their time developing new go-to-market strategies & technologies, up from 22% in April.

ITDMs provided further insight into how their digital business objectives had changed in importance as a result of COVID-19, with 64% said that increasing operational efficiency rose in importance, followed by creating better customer experiences (58%), and improve security (58%).

Organisations are adding new technologies to support the shift in work environments and priorities. Compared to three months ago, organisations plan to spend more on big data/analytics, business-process management, mobile devices, artificial intelligence (AI), and mobile applications in order to become a digital business. When researching these technology products and services, ITDMs anticipate their reliance upon select information sources to increase in importance over the next 12 months. Topping the list are online product demos (40%) and virtual networking events (39%).

“IT leaders need to continue to network with and learn from their peers. With the lack of face-to-face opportunities, they are turning to a variety of virtual offerings,” added Yanovitch. “Whether that be an educational webcast or webinar, conversational networking event, or multiple day virtual tradeshows, these platforms provide tech decision-makers the opportunity to connect, learn and bring new solutions and best practices back to their organizations.”

This survey was conducted July 18-27, 2020 to understand how COVID-19 is affecting IT leaders’ roles, priorities, and expected long-term effects on their IT organisation and business as a whole. The results are based on the responses of 373 IT decision-makers.