If there is one important business lesson that organizations should glean from the global move to telecommuting, it’s that they must step up technology investments to support this rapid shift to remote work or risk being left behind, experts say.
With an increasing number of studies suggesting that companies plan to continue to offer remote work — at least partially — even after the pandemic ends, an acceleration in tech spending “is now a given,” said Lars Hyland, chief learning officer of U.K.-based Totara Learning, a provider of learning technologies for enterprise. “It’s an existential threat to not transform your business to prepare for a primarily digital future.”
To be sure, the pandemic that spurred companies to abandon their offices exposed many companies that didn’t have remote-friendly IT setups, forcing many to adapt on the fly.
Businesses that have been content to just to sit out the remote revolution and continue with their legacy systems are doing so at their own peril, Hyland warns, especially since companies will need the right technology to support this new way of work.
“Now we know we are in a new normal of more flexible, hybrid working patterns,” he said.
It appears many agile organizations appear to be getting the message.
IT spending surge
IT spending worldwide is expected to reach $4.1 trillion this year — an increase of 8.4 percent from 2020, according to Gartner, which predicts it will grow by 5.5 percent in 2022.
The consulting firm also expects all IT segments to grow through 2022 — mostly from devices and enterprise software.
Industries that are not far along on the digital-transformation curve may think it’s fine to go back to previous ways of doing business, but they’ll be missing out on a crucial opportunity to prepare for an uncertain future, Hyland says.
“If your technology tools and your people can’t respond quickly and resiliently, then you are likely to lose out to more nimble competitors,” he said, citing the retail industry’s general slowness to adopt to e-commerce solutions as an example.
While spending on tech has risen significantly across the board at many companies amid the remote-work explosion, “as the shift and transformation to digital-business models has increased, spending has been reduced in traditional business models and the systems and process that support them,” said Les Ottolenghi, a board member for the TBM Council, a nonprofit professional organization focused on technology-business management.
Eric Florence, a Connecticut-based cybersecurity analyst at Security Tech, says companies that are spending less or the same year after year on IT probably aren’t adapting to the current technological landscape. He added that spending at his company has climbed about 4 to 5 percent in recent years.
However, “chances are this would’ve been the case, pandemic or not, as we seek to streamline work processes and make sure people have no trouble accessing their work from home safely,” he added. “Software and hardware are also changing year after year, so we make sure to adapt … to make sure we don’t stumble and fall behind as others push ahead.”
What companies are spending on
Companies have been not only purchasing more laptops and mobile phones for their newly remote workers. Tech spending also is being focused on network virtualization and security, Ottolenghi says.
“I have seen this across the board.… companies are moving toward models which support the remote-work model,” he added, citing a trend by organizations to invest in cloud-based security services.
Virtual networks are much less expensive than owning your own data center and all the equipment that goes with it, Ottolenghi notes.
“The businesses that have shifted their models to digital-first will be the winners, which means more capital deployed on cloud and edge computing,” he said.
Security Tech’s Florence also has seen increased investments in cloud-based storage and cybersecurity programs.
“People had to access the software and data needed from home, and cloud-based storage allowed us that access,” he said. “As we made the transition to working from home, investing in our cybersecurity made sense as people had to access confidential files and accounts from their home networks.”
Even IT investments as simple as providing a firewall, segmented gateways via separate virtual local area networks (VLANs), Wi-Fi service set identifiers (SIDs) or a separate account with an internet service provider can secure work devices and networks, experts suggested.
Last month, Gartner reported that spending in the social software and collaboration market will reach $4.5 billion this year, up 17.1 percent from 2020, which it says is attributable to more remote workers.
Totara’s Hyland says businesses must invest in applications that can support a remote and flexible workforce, including both employee productivity and well-being.
Learning-management systems, performance-management systems, collaboration and online communication all need to “mesh into a friction-free user experience,” he said.
What to know before you buy
As IT outlays rise, businesses must weigh flexibility over costs during the procurement process, Hyland advises.
“IT spend is most expensive when it doesn’t deliver on return on investment,” he added.
Companies should ask if a solution can be changed in a cost-effective manner in response to new business needs, if they’re locked into something that may not be suitable for the business and how much control they have over the platform, Hyland said.
In addition, IT leaders such as CIOs should be prepared to make the case for increased spending, notes Ottolenghi at TBM Council.
These leaders have to be able to speak and act like businesspeople focused on profit and loss as well as strategy and not just technicians, he says.