European IT budget share reflects home-working challenges brought by Covid

Businesses in Europe have cut their IT budgets in response to the Covid-19 pandemic and its ramifications, and have redirected the remainder to address challenges that home-working policies have forced upon them.

According to the latest, updated edition of the TechTarget/Computer Weekly IT Priorities 2020 survey, 33% of businesses in Europe have reduced the IT budget by more than 5%. At the same time, 55% of organisations said their budgets remained flat, and only 12% said their IT budgets had increased by more than 5%.

Most of the businesses questioned in the survey were from the UK, Germany and France, with about 20% made up of organisations in the rest of Europe.

The pandemic response has seen a major shake-up in where IT budgets are deployed, with remote-working projects, for example, much easier to justify than in the past. According to the survey, nearly half (46%) of organisations said spending on remote working has become easier and has accelerated because of the pandemic.

The survey revealed that half of the businesses interviewed are now investing in preparations to enable home working for the foreseeable future.

Across Europe, there are examples of businesses backing a future in which home working becomes the norm for many.

Early in the pandemic, Jes Staley, CEO at the UK’s Barclays Bank, which has 85,000 staff, said the company would change how it thinks about its locations, adding: “The notion of putting 7,000 people in a building may be a thing of the past.”

Staley said more recently that the reaction to the coronavirus lockdown had been a learning curve for the bank and had helped it to understand how a “dynamic work environment” would operate.

In June, Denmark’s Danske Bank said that sending thousands of staff from the office to work from home would have a lasting impact on how work is structured and conducted.

Chris Vogelzang, Danske Bank’s CEO, said the Covid-19 experience “has proved that there is so much untapped potential in the virtual workspace that we need to explore and use to create a more attractive and flexible workplace, while still maintaining the inspiration, energy and social connection that comes with belonging to a physical team and environment”.

Recent figures in a KPMG report reveal that if financial services firms want to continue to attract the best staff, they will have to have policies that enable employees to work from home permanently or part-time. It found that workers aged between 31 and 45 want to work more flexibly (53%) and workers under 30 are the most interested in working from home permanently (28%).

Meanwhile, in line with reduced numbers of people on-premise, 28% of organisations questioned said they are increasing spending on automation to reduce reliance on people – a trend that Gartner calls “hyperautomation”.

According to the TechTarget/Computer Weekly report, hyperautomation is the result of “the aggressive adoption of robotic process automation (RPA) and the artificial intelligence renaissance” of recent years.

It says: “Hyperautomation adds machine learning to RPA, enabling RPA’s tactical bots to pass along intelligence from other AI technologies.”

The pandemic has also made it easier for IT leaders to justify spending more money on security. Regulations and defending reputations are factors that ensure cyber security is always a top priority, with spending easy to justify. But add in the fact that huge numbers of people are working remotely and the justification for spending more on security becomes even easier.

With staff out in the wild, businesses must secure potential points of vulnerability. To this end, the most common security initiative revealed among European businesses was end-user security training, with 54% of organisations planning such an initiative over the next year. A huge proportion of security breaches are caused by human vulnerabilities, so organisations must ensure remote workers are educated about the risks and best practices.

Connecting remote workers is also problematic for many organisations. According to the TechTarget/Computer Weekly survey, businesses face major networking challenges with staff working remotely. With higher numbers of people using bandwidth-heavy applications, businesses have reported connectivity issues.

A total of 62% of businesses reported some bandwidth or network performance issues. More than a quarter (26%) said remote user personal networks were causing problems, and 25% said remote user connectivity to business resources was causing issues.

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