Post Pandemic Information Technology Spending

IDC Canada has predicted a slowdown in IT spending for 2020 of 2.3% reduction from the prior year. This is down from a pre-pandemic projected increase of 5%.

In formulating its report, IDC postulated three scenarios:

1. Optimistic, where the major impact of the virus is stabilized by mid-May,

2. Probable, where the major impact of the virus is stabilized by mid-June, and

3. Pessimistic, where the virus is stabilized by mid-July but the economic damage is so large that short term recovery doesn't happen and there is a continuance of further waves of the virus in subsequent periods.

The IDC prediction is based on the "probable" model, but some or all of the other scenarios are possible. The predicted decline would exceed the decline of the great recession and would represent the largest decline in IT spending in modern history.

This decline comes at a time there is increasing evidence that some of the changes in behaviour may be long lasting. This would include the increases in work at home, with the concomitant need for restructuring company IT infrastructure and investing in the technologies necessary to support remote workers.

Many companies have already made some of these adjustments, but others have not. The adjustments made have sometimes been of a short-term nature, devised and implemented in emergency circumstances. But changes in behaviour call for longer term responses, and extend beyond IT to strategic planning, management, operations, procurement, marketing, and so on.

The pressure to implement changes will conflict with the reduced budgets and place great pressure on management to focus on priorities more clearly.

For the ISC report summary, check this link.

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