Organizations that fail to invest in technology during an economic slowdown will lose market share to digital-first competitors, a new survey shows.
Sixty-three percent of IT leaders have been able to accelerate or maintain digital transformation initiatives during COVID-19 while 37% will slow down their digital spending, according to a new survey from IT operations software company OpsRamp.
An earlier survey painted a more optimistic picture, with 73% of respondents planning to increase or sustain their digital transformation projects, the pandemic has badly affected industries including hospitality, entertainment, travel and tourism, and oil and gas, OpsRamp said.
"The reduced appetite for digital spending in our latest survey is a function of the bankruptcy filings and layoffs that we have witnessed in these sectors over the last six months," the company said.
The new survey, conducted in October, is based on responses from 230 IT operations and DevOps executives in the US and UK with at least 500 employees and $5 million in annual IT budgets. The survey asked about annual spending plans, cost reduction measures, operational challenges, and investment themes for 2020 and beyond.
Organizations that fail to invest in technology during an economic slowdown will lose market share to digital-first competitors, the survey stated. Cybersecurity, collaboration, and cloud infrastructure are the three technology areas that have received the greatest funding this year, the survey said.
Performance monitoring tools such as AIOps, digital experience monitoring, and network performance monitoring have played a vital role in pinpointing and addressing gaps in the customer experience area.
The survey also found that service providers are helping enterprises safeguard their infrastructure and reduce the cost of delivering IT services.
The top three insights from the report are:
IT is a strategic differentiator: In the face of restrictive lockdowns and stay-at-home orders, IT budgets have held up remarkably well as technology becomes a critical ingredient in launching new products and services.
· In the second and third quarters of 2020, 60% of IT leaders significantly or moderately increased their annual technology budgets while only 22% significantly or moderately reduced their IT spending in the last two quarters.
Business priorities dictate IT investments: The leading technology investments in the April 2020 survey were information security and compliance, big data and analytics, and public and multicloud infrastructure. These priorities have broadly remained the same in the October survey, but remote work and collaboration have grown in importance.
● What is front and center for IT budgets?
The critical priorities for IT leaders include information security and compliance (59%), remote work and collaboration (55%), public and multicloud infrastructure (50%), and monitoring and management (42%). The pandemic has made digital touchpoints a critical differentiator for customer interactions while resilient technology infrastructure remains a priority for employees working remotely.
● What performance monitoring tools did IT teams buy in 2020? In 2020, technology leaders focused on the following tools to ensure compelling customer and employee experiences.
○ Artificial intelligence for IT operations (57%) solutions help technology practitioners maintain the uptime, reliability, and performance of technology services with contextual, actionable, and predictive insights.
○ Digital experience monitoring (50%) tools put a clear spotlight on business transactions and customer journeys by surfacing end-user interaction insights for complex enterprise services.
○ Network performance monitoring and diagnostics (50%) tools ensure responsive network infrastructure with instrumentation analytics and visualizations for device, flow, and packet-level data.
IT cost management and hiring during COVID-19: With global IT spending expected to fall by 7.3% in 2020, technology leaders have had to employ creative measures to get the most bang for their bucks. IT teams are looking to hire people who can not only help them stay relevant during the pandemic but also build a proper foundation for growth when the economy eventually recovers in 2021.
● Cost reduction measures. Technology leaders have used self-service tools (60% in October versus 54% in April), embraced open source (51% in October versus 50% in April), and reduced technology suppliers (51% in October versus 59% in April) to save money and rationalize their IT operations portfolios.
● Hiring priorities. Enterprises have either recently hired or are planning to recruit the following positions:
○ Financial managers (54%) who can help IT teams present a compelling business case for technology investments,
○ Senior IT leaders (47%) who can marshal the right resources to successfully execute digital transformation programs, and
○ Cloud operators (44%) who can shift, monitor, and maintain enterprise workloads on public cloud infrastructure.
The most successful IT operations leaders today are investing in relevant technology capabilities, staff skills, and organizational processes for the post-pandemic era, observed Varma Kunaparaju, CEO of OpsRamp, in a statement.
"Organizations that fail to make these IT investments in this critical phase will lose customer mindshare, fall behind their competition, and slowly become irrelevant in a global economy that is delivering disproportionate returns for digital leaders," Kunaparaju said.