Tech investment surges to unprecedented levels due to COVID-19

Global IT leaders spent around $15 billion extra a week on technology to enable safe and secure home working during COVID-19, according to the 2020 Harvey Nash/KPMG CIO Survey. This was one of the biggest surges in technology investment in history— with the world’s IT leaders spending an additional 5% more of their IT budget to deal with the COVID-19 crisis, the survey said.

The technology leadership survey of over 4,200 IT leaders analyzed responses from organizations with a combined technology spend of over $250 billion. It also found that despite this huge surge of spending and security and privacy being the top investment during COVID-19, four in 10 IT leaders report that their company has experienced more cyberattacks.

Over three-quarters of these attacks were from phishing (83%), and almost two-thirds from malware (62%), suggesting that the massive move to home working has increased exposure from employees, the survey noted.

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Only 11% of organizations are using tech to ensure a safe return to the workplace

 (TechRepublic)

At the same time, organizations have struggled to find skilled cybersecurity professionals to support this dramatic shift to working from home—and 35% reported that cybersecurity is now the most “in demand” technology skill in the world. This is the first time a security-related skill has topped the list of global technology skills shortages for over a decade, according to the survey.

Although technology spend has risen dramatically during the pandemic, the survey found that technology budgets will be under more strain over the year ahead. Before COVID-19, over half (51%) of IT leaders expected a budget increase in the next 12 months, but during the pandemic this number declined to 43%. This still represents a net increase in budgets and remains almost twice as high as IT spend in 2009—in the wake of the 2008 global financial crisis.

Other key findings include:

Digital companies pull away: Digital leaders were more likely than other leaders to make additional technology investments as a result of COVID-19, with 50% more organizations reporting that they are “very” or “extremely effective” at using digital technologies, spending an additional 21% to 50%.

These investments focused on large-scale implementations of distributed cloud (42%) and SaaS (34%). The crisis has served to emphasize a growing divide between organizations driving their strategy through technology, and those that aren’t.

Concerns over mental health: Eight in 10 IT leaders during COVID-19 said they were concerned about the mental health of their team, which has resulted in six in 10 IT leaders (58%) putting programs in place to support their staff.

Cloud investments are up: After investment in security and privacy (47%), investment in infrastructure and the cloud was the third most important technology investment during COVID-19, with the number of IT leaders actively considering distributed cloud nearly doubling in just 12 months (from 11% to 21%).

Skills shortages increasing: Before COVID-19, 2020 skills shortages remained close to an all-time high. Subsequently, shortages in tech talent have remained high, only marginally dropping compared to the 2008 global financial crisis. In addition to cybersecurity skills (35%), the next three most scarce technology skills are organizational change management (27%), enterprise architecture (23%), and technical architecture and advanced analytics both at 22%.

“This unexpected and unplanned surge in technology investment has also been accompanied by massive changes in how organizations operate—with more organizational change in the last six months than we have seen in the last 10 years, said Bev White, CEO of Harvey Nash Group, in a statement. “Success will largely be about how organizations deal with their culture and engage with their people.”

In a world where the office now includes the kitchen table, and where over 80% of IT leaders are concerned about their teams’ mental health, White added, organizations will need to reformulate their employee offer to attract and retain the talent they need to support them through the pandemic, and beyond.

While every CIO is responding to economic recovery patterns differently, “one thing remains consistent; the urgency to act swiftly and decisively, said Steve Bates, principal, KPMG in the US and global leader of KPMG International’s CIO center of excellence, in a statement. “Technology has never been more important to organizations’ ability to survive and thrive.”

Boards want IT to address several business issues. They include:

• Workforce enablement–In previous years, this has been a mid-ranking priority for technology leaders, but it has jumped to the top three after the onset of COVID-19 (from eighth place before the pandemic) driven by the mass move to remote working. Operational efficiency and customer engagement maintain their top positions, but their purposes have changed due to COVID-19.
• Digital transformation–For almost half (47%) of IT leaders, COVID-19 has permanently accelerated digital transformation and adoption of emerging technology (AI, ML, blockchain and automation).
• Emerging technologies—Small scale implementations of Artificial Intelligence (AI) and machine learning (ML) have jumped from 21% before COVID-19 to 24% now, a significant jump in a period of only a few months.
• Marketplace software as a service (SaaS)–This is the big winner compared to 2019. Large-scale implementations more than tripled from 7% in 2019 to 23% this year. One in six organizations put one in place in the last 12 months.

The survey also found that remote working is here to stay.

Eighty-six percent of IT leaders moved a significant part of their workforce to remote working, and 43% expect more than half of their employees to work from home after the pandemic.

As a result of remote working, 70% of IT leaders report increased collaboration between the business and technology teams and over half (52%) said that it has created a culture of inclusivity in the technology team.

Work location/remote working has risen to become one of the five most important factors for engaging and retaining key technology talent during, and after, COVID-19. Leaders will need to rethink how they attract and engage their employees in a world where physical location lessens in importance, the survey advised.

The survey took place twice: Once in December 2019 and then during the pandemic, between June and August 2020, across 108 countries.

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