We were all faced with a new and uncharted reality as we swapped the office for Zoom, Microsoft Teams and BlueJeans (amongst others) last year. But while remote working was a change of scenery for most office workers, IT teams faced a fundamental change of their entire operation and industry landscape.
IT security systems were overhauled, new platforms rolled out to thousands of employees, and new protocols developed to keep employees and company information safe from proliferating cybercrime.
Our new remote reality has made robust and secure IT systems within a business more essential than ever. As a result, IT investment has quickly shifted up finance leaders’ agenda and become a key budget priority.
In our recent Finance Leaders Outlook report, 74% of US and 72% of UK finance leaders indicated that IT investment had risen significantly as a budget priority as a result of the pandemic. And when quizzed on where IT would sit as a budget priority in 2021, 22% said that it would be their primary budget focus for the year ahead, more than any other spending category.
So as CFOs turn their attention more closely to IT as we look ahead to normality, what are some of the key trends in investment that lie ahead?
Cloud will dominate
IT leaders have turned in droves to cloud computing over the past year, and cloud was one of a few areas in which investment grew in 2020 as CIOs looked to flexible data solutions as a way to get bang for their buck.
A year of intense volatility and fluctuating demand highlighted the value of flexible data solutions offered through the cloud. For businesses that had already fully transitioned to the cloud as the pandemic took hold, this flexibility was a key driver of cost efficiency.
Cloud solutions have also played a key role in facilitating remote working, and the pandemic has been the kickstart that many businesses needed to begin to make the transition to the cloud for the longer term.
With volatility and remote working expected to continue for the foreseeable future, cloud will be seen as a crucial part of any businesses’ strategy and continue to attract investment.
Communication channels have been more essential than ever over the past year as employees were forced away from the office en masse. Corporate communications pivoted last year to increase investment in remote working communication platforms and to provide flexibility.
Meanwhile, existing (and expensive) contracts have continued to roll on in the background, costing businesses huge amounts while only being used intermittently by individual parts of the business. Some of the clients we work with for instance have rolled out a business communications platform to their remote workforce, while also paying for expensive legacy communication services.
This has highlighted huge inefficiencies in corporate spend, and businesses have looked to unify their communications strategy as a result. For procurement professionals like us, this has been a case of implementing the fundamentals – identify inefficiencies, unify contracts and optimise spend.
We have helped our clients cut inefficient contracts loose and focus on those that support the future strategy
Given the pace that businesses implemented remote working solutions last year, robust cybersecurity solutions have not always been enabled and businesses have been more vulnerable to cyberattacks than ever.
Investing in Cybersecurity solutions to protect against this has therefore been one of the key trends of the last year. With hybrid and remote working expected to continue, this will be a trend that we expect to dominate CIO and CFOs agenda for some time to come.
Supply chain and supplier monitoring technology
The volatility of the last year has had an historic impact on the structure and vulnerability of supply chains.
As a result, one of the key trends in IT investment over the past year has been supplier monitoring IT solutions. This technology is offering businesses a crucial snapshot into the performance and stability of their suppliers and allowing them to audit supplier performance on an ongoing basis. As volatility continues, these solutions allow businesses to quickly identify weaknesses and address them as they arise, rather than see one link of the chain falter and the entire chain rupture as a result.
It is perhaps no surprise then that in our Finance Leaders Outlook report, supplier management technology was identified as the most common tactic deployed by U.S. finance leaders to increase the resilience of their supplier base, with 53% indicating that they had introduced these solutions this year.
And this technology is offering businesses more benefits than one. Increasingly companies are becoming hyper aware of the ethical dangers of a lack of visibility in the supply chain. Supplier management IT solutions are allowing businesses to monitor the ethical practice of their suppliers and introduce solutions, for example, that allow factory workers to report on their working conditions.
IT investment will continue to rise
The pandemic has highlighted the fundamental role that robust IT systems and smart IT investment play in overall business performance. While workers will begin to return to the office this year in some form, we expect a hybrid working reality to dominate, and continued IT investment will continue to underpin this.
The past year may have catapulted IT to the top of businesses’ budget priorities, but now it is here to stay.
Proxima’s Finance Leaders Outlook 2021 Report looks into six key items on Finance Leaders’ agendas. Click below to download the report.