North America: Tech is the pandemic answer but IT still clawing for cash

We examine our North American coronavirus research findings.

Recent IDG Connect research showed that IT leaders from North America were more a lot more likely to highlight budgets as their biggest lockdown challenge than anywhere else in the world. Why is it all about the money in North America?

The pandemic may have hit Google ad revenue hard but big - and innovative - technology solutions still provide ways to manage crisis. These come via surveillance, data management - covering everything from people to poop - and a raft of new techniques which often have to piggyback on the substantial reach of giants like Apple and Google.

There has always been a stark divide between IT and tech, yet this crisis may have made it more pronounced, in North America at least. Recent research comments showed that some IT leaders in Asia were talking about open budgets to tackle the fallout from the pandemic, while in North America lack of cash was biggest hinderance cited. Here are some thoughts on why this might that be.

Lack of safety valve

Many big companies with a global presence are headquartered out of North America where all budgets are set. This makes them the source of the budget with no hope of getting more from elsewhere. For smaller regional markets the feeling is often that money is being distributed by a bigger force and there is always the possibility of more for an emergency. This is not necessarily the case for North America.

Less budget controlled outside IT

This lack of safety valve may be compounded by some specifics on IT budgets highlighted by the Harvey Nash and KPMG CIO study 2019. This suggests that the US is less likely than many other countries to have increased its IT budget in the last year - just over half (56%) of respondents compared to 74% in Belgium. This is slightly higher in Canada but still some way behind the likes of Belgium. It also appears to have less of this reduced tech budget controlled from outside IT.

All this may make IT more of a self-contained island within the business. And could suggest that upper management and the board are more sensitive to any form of additional IT spend - crisis or not.

Remote working more common

More people appear to routinely work from home in North America than in say Europe. It's hard to find stats that exactly compare like for like but 2017 US Census data showed 5.2% of workers in the US usually worked at home compared to the same percentage a year later in the EU. And these numbers are growing annually. Anecdotally though, I've found a lot more North American colleagues work remotely than those based in Europe.

This suggests that the sense of profound change in working circumstances, that requires intervention from IT, may be less severe in North America which means they are less likely to be granted financial assistance.

 

Expectations in freefall

This year many CIOs may end up spending more than they previously anticipated but on different things. Many other projects will also be delayed and hiring frozen. This is all markedly different from what was forecasted last year. In October, more than half of companies expected their 2020 IT budgets to rise, with IT budgets accounting for 9.1% of revenue in North American companies.

Economic fallout is happening the world over but many pundits expect the US to be hit hardest. Some analysts forecast that that unemployment could reach as high as 40% - far greater than the peak of 25% during the Great Depression. This stark revision of expectations everywhere may have hit the collective psyche hard.