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According to the survey conducted by PwC, in the case of 70% of IT directors, the pandemic had a significant impact on their business activities, and 41% of them plan to reduce their IT capital expenditures. In one third of companies, the reductions will not exceed 20%.
The need for a digital transition
The COVID-19 pandemic has led to a growing demand for digital transformation in many organizations around the world. IT managers are faced with the dilemma of allocating their investments properly for future years. According to PwC research, investments in IT infrastructure and services in the cloud will become a priority for the next few years. 96% of IT directors believe so. Other key investments include IT support for employees (96%) and workplace technology (89%).
Mostly, IT directors plan to reduce expenditure on facilities (83%) not directly related to IT infrastructure, and only 3% of respondents plan to reduce investment in cyber security. 10% of organizations intend to reduce IT costs by more than 30%.
Among the new challenges for 2021 were Customer Experience (55%), cyber security (54%) and technologies to create new business models (52%). For comparison, in the last year’s edition of the survey, organisations indicated improvements in the area of cybersecurity (64%), Customer Experience (60%), and implementation of digital collaboration tools and workplaces (58%).
In the case of technology, 26% of organizations intend to reduce spending on business software, 20% on ERP renewal and 15% on cloud solutions. However, 24% of the companies that have announced a reduction in IT spending expressed the desire to reuse these technologies with a stable financial situation of the organization.
The PwC survey was attended by 150 IT directors from such countries as: Portugal, the Netherlands, Italy, Ireland, Poland, Spain, Germany, Turkey, Austria, South Africa, Japan. The survey was conducted in early May 2020.