'Cash is king' and changing plans: new study looks at IT costing trends
The need to manage IT costs and budget planning is increasing as the need for new IT capabilities is on the rise. This is according to a new study from Apptio, the provider of technology business management (TBM) solutions.
The survey data details significant cuts to IT budgets and shifting business priorities in the wake of the COVID-19 pandemic and subsequent economic fallout.
Across all sectors, companies have had to re-plan budgets, while some sectors, including healthcare and financial services, are seeing even more remarkable shifts.
For instance, 93% of healthcare IT leaders are seeing an increased demand for IT capabilities post COVID-19.
Key findings include IT teams feeling increased pressure, cost optimisation increasing in priority, and CIOs finding they must deliver faster business decisions.
The study finds that while the majority of organisations feel pressure to reduce IT spend, 63% report an increase in demand for new IT capabilities.
In healthcare, the demand is even higher at 93%, while half of financial services leaders and 64% of government organisations are experiencing a demand for new capabilities.
On cost optimisation, 72% of CIOs say the disruption caused by COVID-19 has changed their business priorities. Across sectors, organisations have shifted from prioritising operational excellence and revenue growth to reducing IT spend.
Two-thirds of healthcare organisations say optimising costs is now the number one priority. On the decision making side, three out of four CIOs say the ability to rapidly re-plan is a critical capability during the pandemic.
Yet 39% of organisations have a quarterly forecast cadence. Ongoing uncertainty surrounding the pandemic means organisations cannot afford to wait to respond every three months.
Technology Business Management Council GM Jarod Greene says, “Leaders are facing some of the most difficult decisions of their careers. We are seeing organisations from all industries impacted, some harder than others.
“In all cases, these organisations have had to look at how technology will enable them to come out of this disruption stronger than when they went in. But they have to balance the need to manage costs and accelerate innovation, particularly in an environment where cash is king and plans can change on a daily basis.
“With financial management software, organizations can automate these processes, surface insights they would not have otherwise found in their data and make collaborative, informed decisions that take into account the business impact of their choices."
This survey was conducted between March and June 2020. There were 100 total respondents, of which 12% were CIOs and 30% were IT finance leaders.
Respondents represent a variety of industries, including banking and financial services (14%); healthcare (11%); and professional services (9%), among others.