COVID-19 forces ‘biggest technology investment in history’

Companies spent the equivalent of around $15 billion extra a week on technology to enable secure home working during COVID-19, with global IT leaders spending more than their annual budget rise in just three months.

That is the lead finding of this year’s Harvey Nash and KPMG CIO research, the largest technology leadership survey in the world, with 4,200 respondents from organisations with a combined technology spend of over $250 billion.

However, despite this huge surge of spending - with security and privacy being the top investment during COVID - 40 per cent of chief information officers reported that their company has experienced more cyber attacks.

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

At the same time, organisations have struggled to find skilled cyber security professionals to support this shift to homeworking – and reported that cyber security (35 per cent) 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.

In addition to cyber security skills, the next three most scarce technology skills were organisational change management (27 per cent), enterprise architecture (23 per cent) and technical architecture and advanced analytics both at 22 per cent.

Although tech spend has risen dramatically during the pandemic, the survey found that budgets will be under more strain over the year ahead. Prior to the pandemic, over half (51 per cent) of IT leaders expected a budget rise in the next 12 months, but during the pandemic this number declined to 43 per cent. 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 financial crisis.

Digging further into the research, KPMG and Harvey Nash revealed that so-called ‘digital leaders’ were more likely than non-digital leaders to make additional technology investments as a result of COVID – with double the amount that are ‘very’ or ‘extremely effective’ at using digital technologies spending an additional 21 to 50 per cent.

These investments focused on large-scale implementations of distributed cloud (42 per cent) and software-as-a-service (SaaS) (34 per cent).

After investment in security and privacy (47 per cent), investment in infrastructure and the cloud was the third most important technology investment during the current crisis, with the number of IT leaders actively considering cloud nearly doubling in just 12 months (from 11 per cent to 21 per cent).

For almost half (47 per cent) of IT leaders, COVID-19 has permanently accelerated digital transformation and adoption of emerging technology – defined as artificial intelligence (AI), blockchain and automation.

Small scale implementations of AI and machine learning have risen from 21 per cent before the pandemic to 24 per cent now, while large-scale implementations of SaaS solutions have more than tripled from seven per cent in 2019 to 23 per cent this year. One in six organisations put one in place during the last 12 months.

Steve Bates, a principal at KPMG in the US and global leader of KPMG International’s CIO Center of Excellence, said: “IT will be shaped by economic recovery patterns unique to each sector, location, and company.

“While every CIO is responding to these forces differently, one thing remains consistent; the urgency to act swiftly and decisively – technology has never been more important to organisations’ ability to survive and thrive.”

For a full interview with Steve Bates discussing the survey's findings and more, please listen to our latest podcast here, or wherever you download your podcasts.

Harvey Nash Group chief executive Bev White said: “Success will largely be about how organisations deal with their culture and engage with their people.

“In a world where location has dissolved, where the office now includes the kitchen table, and where over 80 per cent of IT leaders are concerned about the mental health of their teams, organisations will need to reformulate their employee offer to attract and retain the talent they need to support them through the pandemic, and beyond.”

The survey appeared to show that remote working is here to stay, with 86 per cent of IT leaders moving a significant part of their workforce away from the office, while 43 per cent expect more than half of their employees to work from home after the pandemic.

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

Almost two thirds (61 per cent) stated that the pandemic has permanently increased the influence of the technology leader. However, the downward trend for board membership continues from 65 per cent in 2018 to 61 per cent of CIOs, IT directors and chief digital officers on the main board in 2020.

    Share Story:

Recent Stories