CIOs are placing their bets on mission-critical tech following COVID-19

Major transformation projects are being paused as CIOs turn their attentions to the nuts and bolts of business.

As lockdown restrictions in many countries around the world begin to ease, it has allowed construction firms to bring employment rates up whilst enabling businesses to rejuvenate.

Although it is evident that business activities have begun increasing once again, IT budget cuts are both possible and already visible across many companies as CIOs save cash to ensure business continuity elsewhere.

A recent report by research firm Gartner reported that global tech spending would drop by eight percent. This equates to a decrease to US$3.46trn from US$3.76trn in 2019. It is highly likely that this large decline is spending is a result of prioritizing ‘mission-critical’ tech and services, particularly for projects that are aimed at transformation or growth.

A clear example of this US confectionary maker Hershey’s which had a similar approach by pushing back its new ERP (enterprise resource planning) project by a year. It was described by the company as a ‘prudent approach’.

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The move by Hershey’s is a solid example of the shift in mindset that C-suite members have had when considering mission-critical projects over projects that focus on tech such as digital transformation strategies. Most businesses are only focused on tech such as teleworking to enhance remote working during the pandemic.

Although mission-critical tech is currently at a standstill, Gartner has reported that sub-segments including public cloud services are expected to grow by almost a fifth in 2020. Furthermore, IT systems and devices designed to support remote working are also on the rise.

Another trend driven by coronavirus restrictions is automation. Varying business processes has sparked an increase in the use of the technology as it helps with social distancing measures by requiring less staff to work manual roles.

IT budgets are expected to recover, but these will bounce back at a slower pace.

John-David Lovelock at Gartner, said, “IT spending recovery will be slow through 2020, with the hardest-hit industries, such as entertainment, air transport, and heavy industry, taking over three years to come back to 2019 IT spending levels.

“Recovery requires a change in mindset for most organizations. There is no bouncing back. There needs to be a reset focused on moving forward.”

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