IT leaders have a natural bias toward optimism when it comes to spending on IT initiatives that isn’t as often equally shared by finance executives. Nevertheless, a survey of 340 finance executives in North America conducted by Hanover research on behalf of OneStream Software, a provider of corporate performance management (CPM) tools, finds nearly three-quarters (73 percent) expect that they will return to normal growth by the end of 2021.
However, many of those plans are contingent on two factors that are beyond the control of finance leaders. A full 86 percent of respondents said their companies will need to change their financial forecasts in the event of a tax change being implemented under the Biden administration.
The other factor is the degree to which organizations will be able to hire additional personnel. Even more respondents (89 percent) said they have already made plans to change hiring and staffing to adjust to potential wage increases that might be required by any new legislation.
On the plus side, the survey also finds nearly all respondents (98 percent) said their companies have made budgetary plans for returning to the office. In fact, more than a third (36 percent) plan on dedicating over 15 percent percent of their budget to reopening offices. Data privacy tools are the most commonly cited technology earmarked within return-to-office budgets that might drive increased spending on IT in on-premises environments in the second half.
Impacts on upcoming IT spending
Managed service providers (MSPs) will need to pay close attention to the potential impact any of these changes might have on their businesses. Obviously, increased taxes mean less to spend on IT. However, if organizations are hiring fewer people they may need to rely more on external service providers. Most organizations are going to be cautious when it comes to hiring full-time employees.
The rate at which employees might be returning to the office is also a critical metric given the impact the location of those workers will have on the way IT services are consumed. Work from anywhere (WFA) initiatives make IT more complex to manage regardless of who is providing the service.
While consumption of #ManagedServices appears to be robust right now, every #MSP should be prepared, knowing how fragile the global economy can be, as evidenced in the past year.
Savvy MSPs will also want to track the strategic investments organizations plan to make. The survey finds financial executives are increasing or plan to increase investments in environmental, social, and corporate governance (ESG) management and reporting systems (85 percent), as well as diversity, equity, and inclusion training (86 percent). Each of those initiatives will require some level of additional IT support.
In terms of how IT budgets were allocated in the last year, the top areas of investment cited were increased use of cloud-based planning and reporting solutions (65 percent) and artificial intelligence (59 percent). The survey also notes most organizations already use (69 percent) or plan to use (18 percent) low-code development platforms.
There’s no immediate indication those priorities will change any time soon as the economy improves. Right now, consumption of managed services especially appears to be robust. However, the one thing that every MSP should have learned in the last year is just how fragile the global economy really is.
Photo: Sener Dagasan / Shutterstock