2020

IT Report: COVID-19 Response & Recovery

How The Pandemic Has Impacted IT

In early 2020, a new infectious disease emerged to become a global pandemic that would bring the world to a standstill. Global economies would face the worst recession since World War II. Healthcare systems struggled with increasing patient loads and diminishing protective equipment availability. Air travel was flooded with flight cancellations. Businesses across the world closed their doors and sent employees home.

IT professionals took center stage, challenged to keep institutions solvent and viable during this uncharted, unpredictable time. IT professionals were forced to enact business continuity plans on a grand scale, help over 16 million US workers quickly transition to remote work, while meeting organizational demands shaped by the effects of COVID-19.

In an effort to understand the IT experience during this crisis, we compiled responses from almost 300 participants on how COVID-19 has impacted their spending, operations, tactics and more. The following report shares findings and insights to help you see how your peers pivoted and to take a look at what’s ahead in 2021.

46% Excellent Preparedness Rating | IT Professionals & COVID-19

46%

of respondents gave a preparedness rating of excellent in the face of the pandemic

26% Infrastructure Project Delays | IT Professionals & COVID-19

26%

of respondents cited Infrastructure project delays as the most significant challenge
25% Remote Technology Demands | IT Professionals & COVID-19

25%

Additional technology demands due to working remotely accounted for 25% of responses for the short-term COVID-19 impact

Good news on overall preparedness

Survey results indicate that IT professionals were prepared to deal with the impact of COVID-19 crisis on their IT operations. Well done! Effective responses included streamlined decision-making, resource reallocation and swift action.

A high preparedness rating could point to most everyone in the organization being able to pivot to working at home early on. The IT department was able to or had already provided the required laptops, monitors, system applications, and VPN options to equip employees with the necessary resources and access to be productive remotely as quickly as possible.

Zoom added more than 183,000 enterprise customers . . . up 353.7% year over year.

S&P Global Market Intelligence June 2020

IT Overall Preparedness to Respond to COVID-19

A direct correlation to operations, spending and security

COVID-19 impacted IT plans causing additional technology demands due to working remotely, budget restrictions and increased security demands (66% of responses represented in the top three).
Higher revenue companies indicated that security demands had a greater impact than budget restrictions. However, responses from those at lower revenue companies found budget restrictions to carry a greater impact.

IT Response: The short-term impact of COVID-19

IT Plans

There was no escaping accommodations, disruptions and wild predictions starting in early March.
Participants saw changes in plans for security, budget, staffing, cloud migration and more.

COVID-19’s short-term impact on IT plans

  • Additional technology demands due to working remotely (25%)
  • Budget restrictions (21%)
  • Increased security demands (20%)
  • Hiring Freeze (8%)
  • CapEx spending freeze (8%)
  • Move to cloud (6%)
  • Staffing cuts (5%)
  • Pause moving to the cloud (2%)
20% Increased Security Demands | IT Professionals & COVID-19

20%

of respondents faced Increased security demands in response to the pandemic’s effects

Immediate action was needed to protect companies from attack during the height of uncertainty. The swift and massive overall switch to working remotely also increased network vulnerability.

In response, IT departments purchased more security licenses, granted more VPN access, set up additional firewalls, implemented stronger security measures and invested more in IT team and company-wide security training.

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“Additional technology demands due to working remotely” accounted for 25% responses (average)
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“Budget restrictions” and “Increased security demands” represented 21% and 20% of responses (average)
Remote work has increased the average cost of a data breach by $137,000.

IBM Security, Cost of a Data Breach Report 2020

IT Spending

37% Short-Term Spending Cuts | IT Professionals & COVID-19

37%

implied that their organizations plan to cut spending over the short-term

In many cases, IT budgets were overtaken by the need for COVID-related spending on key concerns such as meeting new security demands and supporting the massive switch to remote work for a large portion of the business operations.

IT leaders upended planned spending to fund immediate business needs. Tough decisions were made to delay non-essential projects, postpone hiring and find additional avenues for cost-savings.

E
Just over one-third of responses (34%) indicated that for the short term, IT spending would remain “Unchanged”
E
29% indicated that IT spending would increase over the short-term

COVID-19’s short-term impact on
IT spending

  • Increase Spending 50%+ (3%)
  • Increase Spending 26%-49% (8%)
  • Increase Spending 1%-25% (18%)
  • Spending Unchanged (34%)
  • Decrease Spending 1%-25% (27%)
  • Decrease Spending 26%-49% (4%)
  • Decrease Spending 50%+ (6%)
COVID-19's Short Term Impact on IT Spending | Revenue Breakdown
However, decisions about whether to increase or cut IT spending varied by business size.
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26% representing companies with revenues from $250K to $50M plan to increase IT spending
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32% plan to cut IT spending. The largest differential appeared in companies with revenues of $1B or more
E
16% of companies with revenues of $1B or more indicated that their companies plan to increase IT spending

IT Tactics

30% Focus on Personal Safety & Restrictions | IT Professionals & COVID-19

30%

of respondents saw Focus on personnel safety and restrictions as their most significant tactical shift

To comply with CDC mandates, IT time, budget and planning efforts were focused on making the necessary adjustments to keep essential onsite employees operational.

Many IT teams pitched in to help with coordinating in-office needs such as masks, cubicle spacing, revising or adding physical partitions, launching new safety and security protocols to protect employee health.

Unlike strategies that represent long-term goals, tactics are more concrete and are oriented toward smaller steps and shorter time frames.

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“Responding to remote service demands” represented the most significant tactical shift encountered by the survey participants (40%)
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“Focus on personnel safety and restrictions” and “Increased safety” rounded out the top 3 responses at 30% and 21%, respectively

COVID-19’s short-term impact on IT tactics

  • Responding to remote service demands (40%)
  • Focus on personnel safety and restrictions (30%)
  • Increased security (21%)
  • Capacity management (5%)

Data Center Operations and Plans Changes

Data center operations and plan changes due to due to COVID-19

  • Project prioritization due to budget limitations or staff reductions (17%)
  • Hardware refresh activities postponed (16%)
  • Supply chain disruptions (16%)
  • Identifying cost-saving measures (15%)
  • Security management (13%)
  • Adjusted demands due to revenue loss or reduced customer activity (11%)
  • Delaying plans for cloud services (4%)
E
“Hardware refresh activities postponed” and “Supply chain disruptions” tied for causing the second most substantial impact on data centers (16%)
17% Changed Project Prioritization | IT Professionals & COVID-19

17%

of respondents saw Project prioritization due to budget limitations or staff reductions as their most significant change

The sudden demand for equipment for remote workers and the heightened stockpile ordering of critical parts in response to the unknowns taxed even the most robust supply chains.

In addition, slowdowns and shutdowns of production due to COVID-19 combined with the ripple effect of the lack of available parts and materials between manufacturers increased delays in fulfillment.

Data Center Operations & Plan Changes Due to COVID-19 | Revenue Breakdown

IT Operation Challenges

26% Infrastructure Project Delays | IT Professionals & COVID-19

26%

of respondents saw Infrastructure project delays as their most significant challenge

With multiple resources being diverted to ensure that businesses were operational within the new and shifting influences of COVID-19, previously planned projects were postponed. IT leaders were faced with the need to institute spending freezes and navigate supply chain issues, along with establishing temporary (or potentially permanent) measures for remote workers or account for sudden staff reductions. Infrastructure strategy was undergoing a revamp as processes, revenues and forecasts called for a significant re-evaluation.
E
“Supply chain issues” (19%) and “Spending freezes” (18%) followed, representing the second and third most significant challenges

IT operation challenges due to COVID-19

  • Infrastructure project delays (26%)
  • Spending freezes (18%)
  • Budget cuts (16%)
  • Additional internal approvals needed when making decisions (8%)
  • IT staff layoffs (6%)
  • Consolidating data centers due to closures or budget demands (1%)

IT Recovery: The future impact of COVID-19

What does the future hold in terms of IT spending?
Participants indicated both good and bad news in terms of their spending forecasts.

Future impact of COVID-19 in 2021

  • Increased Spending 50%+ (2%)
  • Increased Spending 26%-49% (4%)
  • Increased Spending 1%-25% (28%)
  • Spending Unchanged (37%)
  • Decreased Spending 1%-25% (21%)
  • Decreased Spending 26%-49% (6%)
  • Decreased Spending 50%+ (2%)
The rush to fill the gap for remote working demands, the slowdown in infrastructure project spending and the impact COVID-19 has had on revenue has caused a reallocation of funds.

2021 spending will be driven by industry and overall business transformation requirements. COVID-19 is forcing organizations to prioritize digital optimization to keep the business relevant.

E
37% signaled that 2021 IT budgets should remain “unchanged”
E
34% indicated that IT budgets would increase in 2021
E
29% anticipate budget reductions for 2021
Spending on remote working apps and platforms is projected to reach double-digit growth rates this year. Forbes
Future Impact of COVID-19 in 2021 | Revenue Breakdown

Rebuild: The long-term outlook with COVID-19

2020 is proving to be one of the most tumultuous years for IT leaders in decades. The scope and sustained impact of the pandemic has and is forcing organizations to pivot rapidly to remote work, take action to increase security and ensure supply chain resource availability.

In Summary

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Spending remained relatively stable the past six months and although some future spending appears to face decreases, most organizations will see it increase or remain unchanged
E
Security demands have increased as did IT’s focus on addressing new ways to prevent cyberattacks
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Even facing a challenge on this scale, IT was able to take quick and effective action to maintain business operations and support the transition to work from home
Moving forward, 2021 will be a year of accelerated digital transformation. The effects of COVID-19 have shown organizations the value of digitizing key processes, improving the customer experience and leveraging technology to increase revenue and customer success.
Even as the uncertainties of the COVID-19 crisis multiply, the goal must be to rebuild for the longer term. McKinsey
Todd Piper, CIO | Service Express

Todd Piper

CIO, Service Express

Todd drives the development and execution of IT strategy ensuring alignment with overall business objectives and direction for design, development, operation, security and support of IT systems and business applications. He is also an Experts Panel® member on the Forbes Technology Council.

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Learn more on how to lead organizations through the disruption in the Gartner Coronavirus Resource Center.

Methodology

294 participants with IT roles and responsibilities completed our survey between August 5 – August 21, 2020.

Participants by Revenue | IT Professionals & COVID-19
Participants by Number of Employees | IT Professionals & COVID-19

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