Knowing how and where to spend money from an IT budget can be a challenge for any organization. You have to fine-tune what you can squeeze out of a tight budget yet still allocate enough money to fund your work from home, cyber security, digital transformation, and other crucial projects. This report will help you look at how and where the precious IT budget can be spent in the next crucial year 2021.
Assess where you stand
During this pandemic, Chief Financial officers (CFO) and business technology budget-holders are struggling to strike a balance between the objectives of saving money and investing in adaptability to help their firms not just survive, but also adapt and grow.
As per the global survey “The 2021 State of IT: The Annual Report on IT Budgets and Tech Trends,”by Spiceworks Ziff Davis during June and July 2020, growth in technology budgets has slowed compared with last year. Among the respondents, 33% said they’re planning for an increase in their IT budgets for 2021, but that’s down from 44% who said the same thing about 2020.
Some 17% expect their budgets to drop next year. Still, that leaves around 50% who expect their budgets to stay the same or go up.
Among those surveyed, more than half said they aim to retain their flexible work policies, while 44% are looking to increase their digital transformation plans. Other goals mentioned include: 1) improving security and governance, 2) enhancing training to support remote workers, 3) connecting employees using secure and standardized tools, and 4) refining their disaster recovery plans to cover more scenarios.
Below is the expected spending on IT in 2021:
5 steps that CFOs can take immediately to remake their budgeting processes for 2021:
Stress-test scenarios and assumptions to counter uncertainty.
Before the budgeting process, it’s of utmost importance that CFOs revisit and pressure test scenarios and decisions that were taken or put on hold during the covid 19 crisis. Finance teams will need to evaluate which of the economic scenarios they projected actually materialized, and then systematically examine how various strategic initiatives launched during the crisis have affected corporate performance (in revenue, pricing, sales volume, and competition).
Reimagine the business from a zero base to determine key business drivers.
In the wake of the COVID-19 crisis—business leaders are no longer faced the base decision about whether to shift spending but rather the more urgent choice of how much and where. For example, an IT service company reallocated its IT budget to work-from-home capabilities whereas a major hospital chain has reallocated conference and travel budgets toward telemedicine.
Hold back some spending centrally—as contingent resources—to build flexibility and optionality into budgets.
2021 Budgets should also include centrally controlled pools of funds (around 10 to 15 percent of a company’s total spending) to be used when certain triggers so indicate—for instance, when demand increases in certain countries, there is a drop in customer retention rates, and specific product, service, or geographic scenarios materialize. The centrally managed pools of funds should be focused on supporting variable-cost categories but may also be released in stages throughout the year to support capital expenditures, R&D projects, and hiring initiatives.
Assign finance talent to the highest-priority areas or topics to prevent burnout.
Looking to 2021 (and beyond), digital tools may take some of the pressure off finance teams dealing with the lingering effects of the COVID-19 crisis and future crises. Finance-team members may still need to embrace agile workgroups, but if they are handling modular budgets and operating under a contingent resourcing approach, the very nature of their work will change—from reactive to proactive.
Rethink decision-making to speed up and debias processes.
To make changes to daily business operations, finance leaders will also need to link their operational KPIs with strategic plans and provide real-time data about the effect of the COVID-19 crisis on their companies. If those things are done well, CFOs can strengthen their positions within C-suites and emerge as core thought partners to business leaders.
4 High priority IT spending for 2021
Companies will continue to prioritize short-term spending on security for remote workers. We also expect them to spend on e-commerce security that can be scaled to cover increased activity (including the SMEs that use third parties to provide such services).
Next-generation identity and access controls
Companies that had deferred adding MFA to legacy systems are accelerating its adoption or are moving to cloud platforms. With more employees working remotely, teams managing business-critical systems are revisiting who qualifies for privileged access.
At SMEs in particular, we expect to see higher than average spending on MFA services that integrate with collaboration tools and system-as-a-service solutions, including file sharing, virtual-desktop infrastructure, and communication platforms.
Companies that can automate routine tasks can free up time for other work that adds more value. At organizations that use outsourced services, we expect CISOs to ask managed-service providers to make up for increased workloads by adding such automated services as security orchestration and automation response tooling rather than by increasing staff or budgets.
Remote workforce – The new normal?
“IT spend on work-from-home infrastructure to touch 19 percent in 2021”: New CIO survey Report
Twenty-nine percent of working professionals say they would quit their jobs if they couldn’t continue working remotely, according to an online survey of 1,022 professionals by LiveCareer, an online resume and job search consulting service
As enterprises battle pandemic-induced challenges to arm the remote workforce with secure devices and collaborative solutions for maximum productivity, the IT spend on enabling work-from-home (WFH) infrastructure is expected to touch 19 percent in 2021, marking a 27 percent increase.
According to the new CIO survey insights from CyberMedia Research, below is the statistics of Enterprise challenges in the WFH era
What is the solution?
As per the analysts, the coronavirus crisis is expected to slow down spending on IT across sectors substantially, but the service providers will have the scope to build on projects that help clients optimize costs by using better technology, said analysts
According to new research by Forrester, the Indian tech market growth will slow to 1.2% in 2020 and jump back to 8.4% in 2021, at best. Tech spending might contract by up to 4.8% in 2020 with only a mild recovery to 1.4% growth in 2021.
As per a survey conducted by Mckinsey “43 percent of the 127 CFO cited the need to streamline their overall budgeting processes to react more quickly and efficiently. Meanwhile, 65 percent anticipate more use of rolling forecasts in 2021 and beyond.
What is a better technology that can help you optimize cost in 2021? Unlike generic VDI solutions, EnCloudEn VDI is a state-of-the-art solution built specifically for Work from Home. Not just new virtual desktops, it also allows users to seamlessly connect to their existing office workstation as well as their enterprise apps & storage.
On the other hand, EnCloudEn Hyper-converged Private Cloud is believed to be the solution for all data center problems. While it brings a higher degree of flexibility, scalability, and reduction in cost, it also is the most efficient solution available in the market today. Know more about EnCloudEn VDI and HCPC here: https://enclouden.com
The financial-planning process for 2021 presents an opportunity to turn hard-earned lessons from the COVID-19 pandemic into an enduring exercise in linking strategy to value.
A “perfect” budget for 2021 may not be achievable—but a better budgeting process certainly is. The typical budgeting exercise, whether bottom up or top down, can get stuck in endless negotiations and may not address critical concerns about strategy, cost saving technology, or resource allocation.
By contrast, radically redesigned and reimagined strategic budgeting can generate bolder discussions that are more in line with strategy, deeper insights that can unlock more value,less cost and more agility.