Post-COVID CIOs are well placed for business change

Innovating with a reduced budget will become a high priority for tech leaders as the economy returns to health finds major annual CIO survey.

CIOs are having to increase innovation, and to do so on decreasing budgets, as a result of the economic impact of the 2020 Coronavirus pandemic. The annual CIO Survey by search firm Harvey Nash and business advisory group KPMG is the first major analysis of the global CIO community since Coronavirus led to so much tragedy, and a major slowdown in the world economy. This year's survey reveals that age-old challenges which have dogged technology leadership remain, as well as new obstacles exacerbated by the virus.

Globally CIOs gained a median additional spend of 5% of their IT budget to deal with Coronavirus, a figure never witnessed before. Five percent represents $15 billion per week for the first three months of the lockdown. Now though, and to no one's surprise, CIOs face major cuts, driven by organisations expecting a strong return on investment (RoI) from this brief period of profligate spending. There is now a need to make major savings, especially in those economies that mishandled Coronavirus and have been hardest hit economically. 

Sectors that are almost guaranteed to weather the downturn are of course making the lightest cuts, power generators, utilities, government, healthcare and technology firms will continue with strong IT spending. The drastically hit sectors of the leisure and airlines; charities and manufacturing will make the severest cuts to their technology investments.

At the beginning of 2020 just over half of the global CIO community had received a budget expansion. These increases focused on operational efficiencies, digital customer services as well as new technology products. Although denied and ignored by a number of leaders in the west, the arrival of Coronavirus across Europe and North America in particular, led to a sudden shift of technology investment to enterprise cloud and Software-as-a-Service (SaaS). 

Despite the ravages of the pandemic, 43% of global CIOs predict a further budget increase, and 45% plan to up the headcount of their teams in the near future. Compare this to the pre-pandemic figures, 51% of CIOs expected more budget, and 55% were preparing to build their staff numbers.  Given the impact on the economy, this drop in budget and headcount is slight, and according to Harvey Nash and KPMG, the budgets and headcount plans are healthier than they were in 2009, following the financial crisis. 

Whilst those halcyon plans of the early days of 2020 had an eye on the future, post-pandemic, CIOs cannot see the horizon clearly. Six in ten say they will be unable to forecast long-term decision making for another three months, and one in ten CIOs believe it will take at least a year before any reliable forecasting can be completed. Long-term technology plans have been replaced by operational improvements, as CIOs are tasked with reducing technology debt, and putting in the building blocks for the future. Across a number of CIO forums, there has been widespread talk of a second-spike of cloud technology investment, as those businesses that were unable to respond effectively to the pandemic had not fully embraced cloud computing.

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