CIOs are playing an increasingly influential role in their organisations after IT spending surged during the Covid-19 pandemic.
A 5% increase in median IT spending to deal specifically with the crisis was reported by technology leaders polled in the Harvey Nash/KPMG’s Global CIO Survey for 2020.
No surprise then, that a majority feel their voices are being heard more loudly in the boardroom than ever before, with 61% of respondents saying that Covid-19 will lead to a permanent increase in influence for CIOs.
What’s more, 70% say the crisis will to a permanent, positive change in the relationship between business and technology teams.
Now in its 22nd year, the KPMG CIO Survey is compiled based on responses from over 4,200 CIOs based in 83 countries around the world. Harvey Nash, which compiled the report on behalf of KPMG, say the uptick in IT spending equated to an extra $15 billion a week over the first three months of the pandemic as companies invested in remote working tools and additional security measures.
Will Unprecedented Spending Continue? Probably Not
Steve Bates, global leader of KPMG’S CIO Centre of Excellence, told Computer Business Review that the scale of the spending was unprecedented.
“We knew [the increase] was going to be a lot, but to to see it scale at basically $15 billion dollars a week, an annualized 20%, was massive,” he says.
“CIOs basically had an unconstrained checkbook, maybe for the first for the first time in history, and what came out of this huge influx is a recognition that this is not sustainable, that this level of CapEx cannot translate into now new level of unsustainable OpEx. So what do we do now to optimize the environment?
“So next year the I am sure and the CapEx budgets will be more constrained because a lot of that has been backloaded into this year. OpEx will probably be flat, or in some some cases there may be a slight increase. But I think that the comparative levels of the spend is now just higher. So even though the percentage changes might be smaller, the overall bucket will still be almost a trillion dollars higher.”
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Indeed, 43% of those surveyed are still expecting their budget to go up in the next year, despite the heavy investment that has already occurred. Power and utilities CIOs (53%) and Government workers (51%) are most confident about seeing further budget increases, while the outlook is bleakest in the leisure and charity sectors, with only 26% and 32% respectively expecting more cash.
Bright Outlook for Cloud/SaaS
Almost half of respondents (47%) say the pandemic has permanently accelerated digital transformation and the adoption of emergent technologies.
The actual technologies businesses are investing in reflect the post-Covid-19 landscape, with CIOs citing increased cyber security (47%), enhanced customer engagement systems (44%) and cloud/infrastructure projects (35%) as their IT investment priorities.
Fifty three per cent of those surveyed increased their use of the cloud following the onset of the pandemic, and Bev White, CEO of Harvey Nash, says continuing investment in this area is likely to be a theme of the next 12 months.
“As organisations begin to think about how to protect what they’ve got and position themselves for the future, cloud – and also outsourcing – will be areas they turn to,” she says.
“Managing and upgrading their own data centres is unlikely to be an attractive option for most businesses with so many other competing priorities, and therefore utilising cloud for greater agility, and having expert partner organisations manage parts of their infrastructure for them, will be hot tickets. When we come to do the CIO Survey again next year, cloud investment is where I expect to see the big growth.”
SaaS marketplaces were also a big mover, with 54% of respondents saying they had upped spending in this area, and 23% revealing they had put a new large scale project in place over the last 12 months, compared to 7% in 2019.
Though cyber security experts continue to be the most in-demand tech talent, with 35% of CIOs having trouble finding new recruits in this area, the next three most scarce technology skills are organizational change management (27%), enterprise architecture (23%) and technical architecture and advanced analytics both at 22%.
Bigger Mental Health Challenges
Unsurprisingly instances of cyber attacks have risen during the pandemic, with 41% of CIOs saying they had been dealing with additional breaches, particularly spear phishing and malware.
The survey also lifts the lid on the mental health challenges facing technology leaders, with 81% of respondents stating they have been concerned about the mental health of their team during Covid-19, which has resulted in six in ten (58%) putting new programs in place to support their staff.
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