latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/covid-19-driving-lasting-change-for-business-practices-it-spending-451-survey-60716654 content esgSubNav
In This List

COVID-19 driving lasting change for business practices, IT spending – 451 survey


Next in Tech | Episode 49: Carbon reduction in cloud


Price wars in India: Disney+ Hotstar vs. Amazon Prime Video vs. Netflix


Volume of Investment Research Reports on Inflation Increased in Q4 2021


Using ESG Analysis to Support a Sustainable Future

COVID-19 driving lasting change for business practices, IT spending – 451 survey

While the COVID-19 pandemic initially left many companies scrambling to adapt to a more virtual work environment, the effort is resulting in lasting new organizational practices and technology spending priorities that many business leaders view as positive, according to a new survey report from 451 Research, an offering of S&P Global Market Intelligence.

451's "Voice of the Enterprise: Digital Pulse, Coronavirus Flash Survey, October 2020" found that half of the enterprises represented in the survey viewed the pandemic-induced strain on their IT resources as a driver of change, with knock-on effects on technology use, priorities and policies.

About 40% of surveyed organizations said their usage of workforce productivity and collaboration tools, such as Zoom Video Communications Inc.'s video conferencing app, was directly influenced by the pandemic. The sudden spike in virtual workers also resulted in higher demand for other IT initiatives among organizations, including bandwidth/network capacity (37%), information security (33%), and IT infrastructure such as servers, storage and networking (20%).

SNL Image

The survey found that information security was the top technology objective for organizations in the wake of the pandemic, with about 45% of respondents saying it had become a higher priority. Business continuity and resilience ranked as the No. 2 tech objective, with 42% of respondents assigning it higher importance.

SNL Image

"The pandemic is forcing many organizations to make changes in their technology plans that they had previously considered but not yet pulled the trigger on," said Liam Eagle, research vice president for 451 Research and lead analyst for the report.

Moving operations to a virtual environment involves increasing investments in digital transformation strategies, Eagle noted, such as moving workloads to public cloud platforms such as Microsoft Corp.'s Azure or Alphabet Inc.'s Google Cloud, leveraging corporate VPNs to safeguard user security, and increasing reliance on communication.

"These technological requirements will help shape IT spending for these enterprises going forward," Eagle said.

The survey also found that 60% of enterprises agree that inefficiencies exposed by the pandemic will drive their technology investments well into the future. Moreover, 93% of "digital transformation leaders" — or organizations that are ahead of the curve in their digital transformation strategies — agreed that technology investments they made prior to the pandemic allowed them to better deal with the repercussions and changes, compared with 65% of digital transformation laggards.

"Essentially, COVID highlighted all the ways these companies were lagging behind in essential IT infrastructure, and as a result, will drive more investments into tech to help them avoid these issues in the future," Eagle said.

As COVID-inspired practices become permanent policy, the shift to remote work will be major, and the impact to office space widespread. The survey found that the increase in remote working is a permanent change for 64% of responding organizations. Moreover, 33% of organizations have permanently reduced their office footprint as a result of the spike in remote/virtual work.

SNL Image

Companies with more than 1,000 employees indicated they were significantly more likely to implement "smart" building technologies (31%) and contact-tracing tools (29%) as part of their future office plans. Eagle said it is not logistically feasible for larger companies to keep track of thousands of employees and enforce distancing practices, so investing in infrastructure that can regulate the flow of people in certain areas of a building or mobile apps that provide contact-tracing makes sense.

Many business leaders ultimately view the changes inspired by the pandemic to be beneficial, with 80% agreeing that the procedural or operational changes they made will benefit their businesses in the long run and 79% agreeing that their employees have welcomed changes such as remote working and reduced travel.

"Because of COVID, many companies had to adopt new and innovative ways to conduct business," Eagle said. "That is the silver lining of the pandemic — the forced introduction of new modes of collaboration, more flexibility and more innovation."

Additional findings from the survey can be found here.