The pandemic brought uncertainty and major changes to the world. The pandemic had a huge impact on human health, but it also presented many challenges to businesses. It caused economic instability and forced some companies to close down while others rethought their strategy.
Remote work became necessary as businesses and offices closed. IT departments implemented technologies to ensure business continuity, facilitate remote work, and optimize business processes. They invested in work-from-home technologies as well as cloud computing, data analytics, and automation, which increased information technology spending. The organizations spent 15 billion per week on technology in order to equip their work-from-home workforce. This was a historical technology investment.
The current state of IT spending for SMBs by 2021
Gartner Inc. estimates that global IT spending in 2021 will reach $3.7 trillion. This represents a 4.3% rise from 2020. 70% of corporate boards confirm that the pandemic increased IT spending. The pandemic has led to an increase in IT spending for many reasons. Budgets for IT are allocated towards hardware, software, and cloud services.
The IT budgets and spending in 2021 are expected to vary by industry. The IT costs of key sectors like power and utilities and government have increased. Bank of America Corp., for example, has plans to invest $10 billion in technology this year. Of that, $3.4 billion will be spent on new technologies.
In 2021, businesses have the following plans for IT spending.
- Increase in digital transformation by 44%
- 36% — Improve IT systems and operations performance
- Improve security and reduce risk by 33%
- 32% — Connect workers with standard, secure, and easy-to-use technologies
- Create training materials for remote employees at 30%
- 27% — refine disaster management
In contrast to the past, when businesses focused more on integrating new technologies, they are now focusing more on optimizing their existing operations. In a recent Dive, Electric CEO Ryan Deney stated that businesses are less focused on new technologies and more on building a solid IT foundation for productivity and business continuity.
As new security threats arise, companies will adopt new solutions, such as AI-powered security, employee security training, and breach detection systems.
4 Investments in Technology for 2021
Cybersecurity
According to research, four out of ten companies have experienced a breach in security. Forbes reports that from January to April 2020, there has been a 238% increase in attacks against banks, while attacks on cloud servers have increased by 600%. As a result, organizations around the world should make investing in IT security a priority.
Hackers are a constant threat to any business. The more an organization invests in cybersecurity, the better. Cyberattacks can be detrimental to your business, damage your reputation, and cost you millions of dollars in litigation costs. Cybersecurity skills are in demand as more and more enterprises prioritize security.
Cloud Services
Businesses are now looking for technologies they can access from anywhere and at any time. Cloud technologies are becoming more lucrative due to their flexibility and scalability. They can also be accessed remotely.
Small businesses have found these technologies appealing because they are affordable and don’t require extensive technical expertise. In 2021, nearly a third of IT budgets will go to the cloud.
Work anywhere Initiatives
In the years to come, more workers will work remotely. By 2021, and even beyond, there will be more remote workers. According to 43% of leaders of companies in the US, they expect more than half their employees to work from home after the pandemic.
Microsoft, a technology giant, has, for instance, adopted a hybrid work policy that allows more employees to be remote. Both employees and companies can benefit from working remotely. Companies benefit from lower in-office costs and employees’ improved work-life balance.
The investments made by businesses to equip remote workers with the right equipment will pay off when they can work from home. Investing in technology to support employees who work from home is also a priority for companies. In 2021, productivity software will account for 12% of the software budget. The new technologies will ensure that business continuity is maintained as well as high productivity.
Customer Experience and Engagement
During the pandemic, it was crucial to establish relationships and attract new customers. Enterprises spend IT budgets to support initiatives aimed at customers. CRM software is one of the technologies that enterprises use to manage interactions with their customers. Salesforce reports that 24 % of smaller businesses have implemented software for CRM as of March 2020. CRM tools improve customer communication, automate reporting, and streamline collaboration.
Why should your business budget for IT costs?
- Increase revenue. According to a research study, SMBs who increased their technology adoption and investment during the pandemic were 42% likely to increase revenues.
- Increase agility: Businesses that budget their IT expenses based on changing business needs and the environment will be more competitive. Whoever fails to plan for future technology will fall behind.
- Reduce costs: By budgeting for IT costs, you can reduce costs by reducing the likelihood of technology failure.
- Budget for unanticipated expenses. The COVID-19 epidemic taught businesses to plan for unforeseen costs. Companies needed to budget for unexpected expenses when employees worked from home.
COVID-19 has undoubtedly increased IT spending in organizations. Remote working became a necessity with lockdowns, stay-at-home orders, and other restrictions. To support remote workers and ensure productivity and business continuity, businesses had to invest huge sums of cash in IT infrastructure.