IT Budget Evolution During the COVID-19 Crisis

IT leaders reacted quickly to the COVID-19 pandemic. As they adapted to support a completely distributed workforce, IT departments had to reprioritize their initiatives to enable their companies to continue to operate during the crisis.

Now, three months into the pandemic, many IT priorities have shifted again. Pulse surveyed 100 CIOs to understand what their top goals are right now.

In this report, you’ll find out:

How IT initiatives have changed three months into the pandemic

Where budgets will be allocated for the remainder of the year

How purchasing decisions are being made

Whether budgets and hiring are frozen, or coming back to life

Data collected from May 7-22, 2020

Respondents: 100 CIOs

FROZEN BUDGETS THAWING SLOWLY, REALLY SLOWLY.

When COVID-19 became an issue, many IT budgets were frozen. 23% of CIOs say budgets are still frozen, and 49% say they’ve declined. 

COMPARING PANDEMIC BUDGETS TO THE REMAINDER OF 2020

In the next 2 months, 24% say budgets will ramp back up, including 9% of respondents who believe they’ll increase more than 10%.  However, the majority of CIOs (27%) say their IT budget won’t change in the near future. An additional 6% anticipate their budget will become frozen in the next two months—though on a positive note, this figure is down from 23% two months ago.

“There’s been a major shift over the last several months, at an aggressive pace, to enable remote work. Freezing budgets may allow organizations to step back and evaluate technology now that the workforce is remote—but the trade-off could mean taking a foot off the digital transformation gas pedal.” 


— Michael Wahl, Sr. Director of IT and Cybersecurity, Tweddle Group

PRIORITIES SHIFTING TO MOBILE SECURITY, FOLLOWED BY INTERNAL AND CUSTOMER COLLABORATION TOOLS

Most CIOs are shifting their budgets to mobile security, internal communication and collaboration tools, and customer communication and collaboration tools.

WHICH OF THE FOLLOWING PRIORITIES WILL YOU SHIFT YOUR SPEND TO IN THE NEXT 2 MONTHS?

The majority (79%) of CIOs say these priorities are the same as a month ago, while 21% say they’re different.

OF THOSE WHO SAID THEIR PRIORITIES ARE DIFFERENT, THE MOST COMMON NEW BUDGET ITEMS ARE:

22% of CIOs will be making a single large spend over the next six months that totals over $100,000.

“Many companies are going to allow (or require) employees to work from home after the pandemic, due to health concerns and reduced overhead. The fact that CIOs are investing in security and end-user technology—even though budgets are decreasing—indicates this.”


— Brian Sampietro, CIO, TGI Office Automation

To inform purchase decisions, 69% turn to their peers for advice, and 46% rely on IT communities.

CIOs RELYING ON PEERS AND COMMUNITIES TO INFORM PURCHASE DECISIONS

HOW ARE YOU MAKING PURCHASING DECISIONS RIGHT NOW?


of CIOs evaluate tech purchasing needs based on both top-down and end-user input.

HOW ARE YOU EVALUATING IT NEEDS FOR THE ORGANIZATION RIGHT NOW?

69%

A MIX OF EXECUTIVE AND END-USER DECISIONS 

10%

END-USER REQUEST ONLY

21%

EXECUTIVE DECISION

35% of CIOs only take 1 week to decide on new tool purchases.

HOW LONG DOES IT TAKE TO MAKE A PURCHASE DECISION RIGHT NOW?

“There are so many sources of information on products, but there’s nothing that can replace direct, meaningful, peer-to-peer interaction. Why build something that already exists and not leverage effective methodologies and tools already out there? Why not learn from the mistakes of others?”


— Hiba Sharief, CIO and Start-up Advisor

LAYOFFS AREN’T DONE YET

While the same number of CIOs have maintained their number of FTEs as cut headcount (48%) so far during the crisis, the majority are planning to reduce team size in the next six months.

HAVE YOU REDUCED HEADCOUNT BECAUSE OF COVID-19?

CIO INSIGHTS

“IT and other cross-functional teams should be diligent in tracking trailing maintenance costs, which of course increase the run costs of the business year-over-year. Some have had some real success renegotiating service contracts, extending service life, and consolidating infrastructure, or moving to the cloud—IaaS, PaaS, or SaaS.”


- Michael Wahl, Sr. Director of IT and Cybersecurity, Tweddle Group

“Disasters are happening more frequently, employees are using unmanaged home devices to connect to office networks, and ransomware attacks are on the rise. Investing in BDR technology—even with the need to reduce spending—can prevent tremendous monetary losses.” 


- Brian Sampietro, CIO, TGI Office Automation

“Remain transparent—but it’s also ok to be vulnerable. This is the best time to learn more about yourself as a leader. How you can remain courageous, compassionate, collected, and encouraging during these challenging times. Focus on building strong bridges with the CFO, and put the company first without compromising people.”


- Hiba Sharief, CIO and Start-up Advisor

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