The COVID-19 pandemic has disrupted every industry at an unprecedented scale, causing nationwide lockdowns and mandatory social distancing. Nine months after the pandemic’s arrival in Australian shores, many businesses are still reeling from the heavy economic impacts the health crisis has brought.
Halted supply chains, reduced consumer demand, and widespread job losses were a predicament for a majority of organisations in the country. Recent reports also found that Australia has fallen into recession, with GDP declining by 7% in the second quarter of 2020.
In fact, the pandemic has resulted in a global recession, which has completely surpassed the downturn from the 2008 financial crisis. This means the future looks uncertain for many businesses, especially when it comes to their IT budget.
Issues in tech according to analysts
Gartner reports that global IT spending in 2020 will reach $3.5 trillion, which is a 7.3% decrease from the previous year. Every industry segment in IT will experience significant losses compared to 2019. The device market will experience a 16.1% decline, while the communication services market will only decrease by 3.3%. One explanation for this trend is because businesses are forced to move away from traditional office environments and implement bring your own device (BYOD) strategies to cut costs.
In a similar report by Forrester researchers, tech spending in Australia is said to likely go down by 2.7% and bounce back by 4.5% in 2021. During the start of the outbreak, the top concern for businesses was their cash and liquidity. The massive drop in demand meant that companies were eating through their revenue, so they had to furlough employees and cancel IT projects. For example, initiatives like installing Internet of Things (IoT) devices and artificial intelligence were postponed because they required on-site setup.
More recently, however, the challenge for Australian businesses is adapting their operations to new, virtual working environments. A 2020 Spiceworks survey found that major pain points include infrastructure maintenance, cybersecurity, business continuity, and cloud platform management.
Respond, recover, renew
Legislatively imposed lockdowns and decreased tech spending due to COVID-19 requires business owners to reimagine their organisation’s future. To guide executive decision makers through the crisis, Gartner proposes a three-phase plan: respond, recover, renew.
The response phase involves triage, identifying the most critical processes and using temporary fixes to keep people safe and your business operational. Deploying BYOD policies and delaying IT projects were crucial for this in the early stages of the pandemic.
In the recovery phase, business owners must focus on stabilising and resuming operations in a new environment. This is a period of rebudgeting and enabling mobility when businesses reopen. In-house hardware and server budgets, in particular, may be repurposed for more flexible solutions like business messaging apps and project management software.
Finally, the renewal phase deals with establishing new workflows and solutions based on lessons learned from the previous phases so the company can thrive in the new normal. Companies that see the value in long-term remote work, for instance, may invest in mobile device management platforms and cybersecurity. Other organisations may focus on building a robust cloud framework to enable secure and flexible working conditions on the fly.
Spending priorities in IT for the coming year
As Australian companies work towards the renewal phase of their post-pandemic journey, it’s important that they direct their budget to the right solutions. Most businesses will be reining in their spending and may reduce headcounts in IT to stay out of the red. Yet despite these trends, there are some key IT spending priorities companies will be making in the coming year.
Researchers predict that cloud applications and infrastructure will be a top priority investment. This is primarily to accommodate an increasingly mobile workforce that may work 100% remotely even when the pandemic is over.
By migrating to cloud platforms like Microsoft 365, employees get all the tools they need for work at their fingertips. They have access to feature-rich productivity applications like Word and Excel, Microsoft Planner for project management, and Teams for business communication. Plus, company data is stored in a centralised repository, ensuring that remote workers always have access to the same information.
Businesses are also accelerating digital transformation projects to be more agile in a post-pandemic world. Some companies are expanding their eCommerce platforms to serve an ever-growing virtual customer base. Meanwhile, others are incorporating data analytics to their processes to better understand market trends and clients.
What’s more, businesses will undoubtedly need to dedicate a huge portion of their IT budget to cybersecurity. That’s because home office networks are not as fortified as enterprise ones. While cloud platforms use advanced defence mechanisms, businesses can inadvertently create vulnerabilities through weak passwords, poor access management, and misconfigured settings.
How can managed IT service providers help?
Given the budget limitations businesses have coming into 2021, finding cost-effective solutions are more important than ever. Managed IT services providers (MSPs) offer businesses everything they need to thrive in the post-pandemic world at a price point they can afford.
For starters, MSPs serve as outsourced IT departments, proactively maintaining systems for a small monthly subscription fee. They even assess each client’s business, customise an IT plan based on the insights, and recommend best-in-class solutions to optimise processes.
Additionally, MSPs like Empower IT partner with industry leaders to give businesses the best deal on enterprise-grade solutions. They offer subscriptions to cloud platforms like Microsoft 365 or set up businesses with their own private cloud to enable remote work. If companies need cybersecurity, Empower IT safeguards businesses with 24/7 network monitoring, endpoint protection, identity and access management, security training, and so much more.
The point is, with a dependable MSP partner like Empower IT, you can maintain a competitive edge even under a strict budget. Consult with us today to implement an agile and flexible IT infrastructure that can put your business forward in 2021.