IT spending in the UK on the rise to meet the new normal

The spending of British businesses on IT has risen dramatically over the last year, as employers rush to adapt to the bulk of their staff working from home. While eight-in-ten firms have already implemented quick fix solutions, more than half have implemented a longer-term strategic shift of their entire business operations to digital.

Digitalisation has skyrocketed over the last year. While the trend was already top of the agenda for many businesses, the lockdown in response to the coronavirus pandemic saw many organisations forced to further ramp up their changes in response to fundamental changes to consumer behaviour.

Following the sea-change of 2020, many businesses have surprised themselves with the speed and success of their digital initiatives in response to Covid-19. On average, digital offerings have leapfrogged seven years of progress in a matter of months.

Now, a new survey of 138 organisations has further illustrated how organisations across Britain are adapting to the ‘new normal’ of pandemic-era business.

According to the research from Coeus Consulting, IT leaders have had to urgently prioritise and accelerate programmes that focus directly on increasing revenues, improving customer experience, improving operations or optimising the current cost base.

Predictably, almost 80% of respondents implemented quick fix solutions in the scramble to accommodate remote working during the lockdown months – however, this includes a 53% chunk who also claimed they were able to implement a strategic shift of their entire business operations to digital.

While firms have had to work to adapt to short-term change, this shows the majority have also kept in mind the bigger picture which may give them the edge during a recovery. 

Of the business leaders polled, 69% said they had increased end user solutions – otherwise known as remote working – but a further 52% accelerated their operation stability initiatives over the last 12 months. Meanwhile, 63% either saw no change or accelerated their customer channel development, and 74% found the same regarding their efforts to boost customer experience. These are crucial measures if companies are to adapt to historic shifts in consumer behaviour relating to the pandemic.

The scale of these changes are perhaps best highlighted by the fact that almost a fifth of companies have seen IT budgets grow by between 11% and 20%. While prior to the crisis many respondents expected IT budgets to fall then, over the longer term, Coeus also found thar there is a clear upward trend in expectations, with organisations now much more likely to expect a year-on-year IT budget increase.

Ultimately, Coeus found that almost two thirds received additional funding to accelerate initiatives to boost their future projects. As well as organisational transformation, this involved spending on emerging technology to stay on the cutting edge of every aspect of business.

This has given the IT department of many firms a far more proactive role than they have had historically, with 82% stating that business and IT leadership now played a key role in improving ways of working across the business.

Overall, this has drastically hastened the digital transformation journey of many firms. 12 months ago, many more organisations said they were still amid the early stages of their digital journeys or in the planning stages when they had to re-prioritise and pause non-urgent initiatives to focus on operational continuity during the pandemic.

Today, respondents claim to be further down the line. Almost one-third (32%) of respondents have largely transitioned to digital ways of working, while 16% of firms claim to be a digital-first, technologically mature operation. The key factor behind this seems to be speed at which organisations were forced to adapt to the pandemic meant it was critical for departments to work in partnership.

The co-ordinated work aimed at minimising disruption has fostered longer-term change, with 82% of respondents agreeing that business and IT leadership both see this as an improved way of working.

Concluding, the researchers said that since it has been seen how fast companies can transform digitally when the appropriate level of funding and business support is given, IT leaders must grasp “this huge opportunity” and keep up the momentum. According to the firm, focusing on cloud solutions, customer channels, cost optimisation and cyber security will be essential to do just that.