The pandemic has injected all types of uncertainties into daily life and has therefore hurt business confidence. While most budgets have plummeted, companies across the nation have made a significant investment in technology to allow employees to work from home. From Q4 2019 to Q1 2020, the Coupa Business Spend Index (BSI) plummeted from 92 to 76 for all industries. By comparison, High Tech BSI was more stable, only dropping from 95 to 91 during the same period. Business spend sentiment remained positive and generally better for High Tech compared to other industries from Q1 2020 to Q2 2020. In fact, the only other sector seeing gains besides technology is shipping and freight, consistent with increased home delivery for booming e-commerce pivots.
With shelter-in-place mandates, millions were suddenly forced to work from home. Not surprisingly, the demand for virtual networks, software-as-a-service (SaaS) and security firewalls has boomed. Many organizations that deployed these technologies in response to the pandemic will accelerate their usage, given the requirements for remote work.
According to a Gartner survey of chief financial officers, released earlier in April, 74% of companies surveyed plan to permanently shift to more remote work even after the crisis is over. An overall need to facilitate increased work from home is manifesting itself through an emphasis to build capacity to support virtual workspaces, remote learning, and video conferencing.
The economic lockdown that began around the end of the first quarter depressed IT growth by about 2%. However, a rebound is expected for 2021 tech spending based on many vendors having reported "strong bookings" for future quarters. Consumers and companies alike have embraced more of the digital technology shifts, given work-at-home scenarios. Besides spending, there are behavioral indicators such as daily Google searches increasing from 3 billion pre-pandemic to almost 6 billion currently.
Cloud-centric digital infrastructure and faster application services will be deployed to support the estimated 300 percent increase in remote work compared with pre-COVID estimates. Legal experts warn of potential conflicts concerning employee privacy with the blurring of home and work assets. Phishing and malware are being used in cyber-attacks against employees and businesses. Organizations will need to safeguard laptops, files and Internet connections from hackers or accidental data breach. With more work being conducted from home, the blurring of home and work assets raises potential conflicts concerning employee privacy, data ownership and company liability. With possibly more tethered connections to vendor, data security needs to be considered. As a matter of safety, it may make sense to review things from a legal, technological, insurance and compliance perspective all at once.
Remote work is our new reality, especially given a pending third wave of the Covid-19 crisis. Re-imagining how to feed sales pipelines, coordinate employees’ efforts, maintain data security, enable teams to check in, and even support the psychological health of remote employees are all front and center issues now. Will the growth in IT spending offset the sharp decline in Real Estate and commuting expenditures? Either way, the desire to respond to the changed environment has required new business processes to support remote work. Enabling a working environment that maintains productivity and engagement is as much an IT challenge as it is a management opportunity.
