The world has changed, possibly forever. And IT budgets are changing along with it, as organisations re-evaluate their priorities, keeping in mind the potential impact of the economic fallout post-COVID-19 while taking stock of what they have, what they plan to achieve, and what it will take to get them there.
Digital initiatives are poised to feature heavily in this phase of business recovery to power contactless trends and operational continuity. But as IT spending has been dramatically reconfigured to compensate for unprecedented conditions in 2020 – an IDC report expected a 1.3% drop in Asia Pacific (APAC) IT spending -- business leaders need to make a compelling business case to pursue modernisation efforts.
The tricky part, of course, is that the pandemic is still playing out, and global economies are very much in a state of flux. Even as they cope with an economic downturn, business leaders in 2021 need to make sustainable investments across core digital pillars to give their organisations a much-needed resilience boost to tackle new disruptions, while still enabling growth.
Pivoting 2021 IT investments for the post-pandemic business landscape
Almost immediately after the global outbreak, technology has assumed a defining role in shaping of the new living reality for individuals as well as businesses. More than half of APAC consumers are expecting to increase online spending within the next 12 months, and 43% have higher expectations of their online experience, according to the 2020 Global Insights Report by Experian launched in September.
The pandemic is, in fact, defining the next era of the “contactless economy”, characterised by consumer convenience, a reduced need for person-to-person contact, and the rise of connectivity technologies and data analytics.
In fact, it is forecasted that ‘at-home consumption’ will more than double and amount to US$3 Trillion by 2025, a fifth of which is driven by the COVID-19 pandemic. Contactless ‘outside-home consumption’ will give rise to a new customer segment, dubbed the “Touchless Store Experiencers” by Deloitte, who continue to opt for the physical experience but demand touchless services within a safe environment. Creating these unique value propositions will set businesses apart from the competition.
Looking internally, employees in most cases have shifted quite comfortably to working from home, which further changes the dynamic of organisations. At the peak of its circuit breaker period, more than 80% of Singapore’s workforce participated in remote working, with nine in ten employees wishing to continue this arrangement.
A digital-first business approach will help businesses strike a balance between tackling COVID-19-related challenges and economic realities, whilst maintaining business continuity and enabling innovation. From supporting a remote workforce to delivering an optimal digital experience for the consumer, it is crucial that IT investments in 2021 reflect emerging business needs.
Streamlined IT decision making with stakeholder buy-in
From a budget planning perspective, any major investments made during this period should serve long-term business goals and transformations. A well-articulated plan is essential to stakeholder buy-in and the overall positive business outlook.
The IT department must have a shared focus on delivering value down the road, not just improving day-to-day operations. It takes time to change legacy structures and bring new updated systems online, a challenge that further underpins the importance of careful long-term planning and collaboration.
Mapping out short-and long-term business objectives, for instance, shorter customer verification time or enabling contactless card payment, will go towards setting tangible return-on-investment (ROI) metrics, managing stakeholder expectation, and enabling enhancement projects to be carried out more effectively.
In an ideal scenario, IT upgrades must address all pillars of business recovery and growth, and demonstrate a clear line of sight into corporate strategies, looking at functional maturity, service and operations agreements, operational efficiency, and network security. This calls for a strong IT talent pool, making technology talent-hiring a key feature in businesses’ 2021 IT strategy, even as the global digital talent race heats up.
To put things in perspective, there is a shortage of over four million cybersecurity experts worldwide. It will take a multi-prong approach that involves casting a wider net, re-skilling programmes, and cross-functional training, just to name a few, to maintain a competitive talent pipeline.
Budget-wise, CFOs will want reassurances that proposed IT investments will provide additional value and efficiency while leaving room for contingency plans to account for potential risks. For example, how might another wave of COVID-19 impact a planned IT project? Organisations should consider creating a review team to evaluate the progress of projects regularly.
Finally, establishing a united vision for the next phase of organisational growth with ensure stakeholder buy-in. It is prudent to keep employees at all levels informed and updated on changes, milestones and progresses. A little internal morale building goes a long way in maintaining a positive company outlook.
Responding to, and rising beyond the current business landscape, beset by unprecedented disruptions, might be the greatest challenge in this decade for business leaders yet. Extraordinary times call for extraordinary measures, and those who set off on the recovery path with a defined response plan, supported by technological innovations, stand the best chance of leading their organisations through this crisis.