Like countless others across the United States, small and medium businesses in Connecticut changed the way they work, practically overnight. And to accommodate for this, many businesses like yours were left reinventing their IT budgets.
Our state has recovered 69% of the 292,400 jobs lost to COVID. However, despite a record number of unfilled job openings, paradoxically, there are 91,000 fewer people working in Connecticut than in February of 2020. One way for Connecticut business owners to access a larger talent pool is to invest in adapting their business to function well with remote workers. After all, remote work is here to stay.
Below, we share 4 ways remote work has impacted IT budgets and a few insights on what these changes might mean for you in 2021.
1. Investing in Remote Workforce Productivity
It's likely that your SMB was one of the millions forced to change gears and adapt to this new way to work. So, what's needed to ensure you can have a productive remote workforce? We recommend that you talk to employees and managers on how best you can support them when building your IT budget.
In our experience, it's also best practice to take a look at what other companies are doing to adapt.
In February, global business data platform Statista released the results of a survey they conducted between December 2020 and January 2021 on investments for remote workforce during COVID-19. More than 6,200 businesses worldwide responded to the survey. The top four investments among all participants were: cloud-enabled tools and technologies, digital collaboration tools, productivity management tools, and remote monitoring technologies.
The data from Statista supports other data from a Hewlett-Packard Enterprise study last year, in which more than half of the nearly 5,000 responders cited remote workforce productivity as a critical driver of investments addressing the impacts of COVID-19. The HPE study also revealed that companies are not yet striking an equal balance between IT maintenance and innovation. In other words, despite the push to digital transformation and cloud computing, more than half of the companies surveyed said that they spend 60% or more of their IT budgets on maintenance.
We believe that the lesson to be learned here is that businesses — especially SMBs — would benefit from truly evaluating how they can get the most return on investment from technology, so that they can use tech to drive more innovation in their organizations, particularly to adapt to new consumer expectations.
2. Adapting to New Consumer Expectations
With more of the workforce working remotely, consumer expectations began to shift for most industries. Especially during the first few months of lockdowns, the pandemic exposed major weaknesses in the supply chain, such as sharp increases and dips in demand, coupled with reduced productivity. To survive, many companies had to develop solutions to meet the fluctuating demand, seeking ways to promote worker productivity, while at the same time creating remote solutions for their workers.
In addition, more and more consumers began to expect an immediate response from customer service units, and some companies, but not all, were able to keep up due to the investments they made in technological innovations, such as automation tools. In the new normal, companies rely on video, mobile, and other digital tools for their communication among all stakeholders in the business rather than traveling locally or nationally to join clients or colleagues for in-person meetings.
The pandemic certainly brought with it important lessons for many SMB leaders, particularly when it comes to business continuity, technological infrastructures, and how ready they were to deal with crisis.
A study by CIT showed that in 2020, approximately 68% of small businesses surveyed wish they had invested in technology in a greater capacity in the 12 months prior to the study. About 81% agreed that technological investment is an ongoing business requirement, and 84% were planning to invest as much or more in 2021.
The bottom line: swift investments in technology were a great provider of resiliency for SMBs during the crisis. Our recommendation is that you task your IT department with updating your IT budget in a way that better positions the company for success in the current circumstances. In our experience, it's also good risk management practice to allow for flexibility in your IT budget.
3. Industry and Vision Determine Your Technology Spending
In general, IT spending in 2021 hasn't changed when compared to 2020. Specific industries are investing heavily in IT while others are seeing a steep decline. For example, the hospitality and transportation industries had to cut back significantly on IT spending when faced with stay-at-home mandates that significantly reduced their demand and the available workforce.
For industries that could still function in spite of the restrictions on mobility, these challenges became an opportunity to accelerate investments in IT that they had planned to implement over the course of months or even years. For these industries, the majority of IT spending was in categories such as supply chain enhancement, remote work productivity, digital economy, and automation.
However, industry type is not always the determinant for what business leaders choose to do with technology. In our experience, the vision you have for your business will highly determine your technology spending. Leaders that continue to monitor trends in the regional and local workforce, will likely be better prepared to continue innovating in support of business goals. For example, one recent Gallup study suggests that roughly 66% of U.S. remote workers would prefer to continue working remotely.
For businesses that will support these preferences, our cybersecurity specialists recommend that leaders encourage their IT departments to provide for a secure, collaborative, and productive distributed team. This may mean spending on tools you may not have previously considered, like automation for repetitive tasks.
4. Investing in Automation Tools
There is no doubt that the pandemic brought with it many difficult challenges that had SMBs scrambling for several months in 2020. However, what many have learned in the past year and a half is that the future of work is here. Digital transformation, distributed teams, and even a possibility of a distributed client base are no longer concepts of a distant future.
In fact, workforce shortages had many businesses looking into tools like automation for the first time, to improve productivity and take care of mundane tasks. Adopting artificial intelligence and machine learning into the workflow afforded businesses with the opportunity to focus on more important tasks, like innovating to meet the evolving demands of their clients. In our experience, the businesses that best-used automation made sure that the IT department was properly equipped to strategically guide implementation.