Companies globally spent the equivalent of around US$15bn[1] extra a week on technology to enable safe and secure home working during COVID-19, reveals the 2020 Harvey Nash / KPMG CIO Survey.
This was one of the biggest surges in technology investment in history - with the world's IT leaders spending more than their annual budget rise2 in just three months, as the global crisis hit, and lockdowns began to be enforced.
- Security and privacy the top investment, but 4 in 10 of Australian IT leaders report cyber attacks
- Huge surge in IT spend isn't sustainable - as 2020/21 technology budgets come under more strain
- 8 in 10 Australian IT leaders concerned about the mental health of their tech teams due to the pandemic
The largest technology leadership survey in the world of over 4,200 IT leaders (265 based in Australia), analysing responses from organisations with a combined technology spend of over US$250bn, also found that despite this huge surge of spending, and security & privacy being the top investment during COVID-19, 4 in 10 Australian IT leaders report that their company has experienced more cyber attacks. Nearly nine in ten (89 percent) reported an increase in phishing attacks, and over two thirds (77 percent) of these from malware (suggesting that the massive move to home working has increased exposure from employees.
At the same time, Australian organisations have struggled to find skilled cyber security professionals to support this dramatic shift to homeworking - with 42 percent of Australian CIOs reporting that cyber security is now the most 'in demand' technology skill. This is the first time a security related skill has topped the list of global technology skills shortages for over a decade.
Although technology spend has risen dramatically during the pandemic, the survey found that technology budgets will be under more strain over the year ahead. Prior to COVID-19, over half (55 percent) of Australian IT leaders expected a budget rise in the next 12 months, but during the pandemic this number declined to 38 percent. This still represents a net increase in budgets.
Other key findings from the world's largest technology survey include:
Digital companies pull away
Digital leaders3 were more likely than non-digital leaders to make additional technology investments as a result of COVID-19 - with 50 percent more organisations that are 'very' or 'extremely effective' at using digital technologies spending an additional 21-50 percent globally - notably in Australia this figure is three times more. These investments focused on large-scale implementations of Distributed Cloud (42 percent - 30 percent in Australia) and SaaS (34 percent - 32 percent in Australia). The crisis has served to emphasise a growing divide between organisations driving their strategy through technology, and those that aren't.
Concerns over mental health
Nine in 10 Australian IT leaders during COVID-19 are concerned about the mental health of their team which has resulted in 8 in 10 IT leaders (78 percent) putting programs in place to support their staff.
Cloud investment up
After investment in security and privacy (58 percent), investment in infrastructure and the cloud was the third (fifth in Australia) most important technology investment during COVID-19, with the number of IT leaders actively considering Distributed Cloud nearly doubling in just 12 months (from 11 percent to 21 percent). This has tripled in Australia from 7 percent in 2019 to 22 percent during the COVID-19 pandemic.
Skills shortages
Prior to COVID-19, 2020 skills shortages remained close to an all-time high. Subsequently, shortages in tech talent have remained high. In addition to cyber security skills (42 percent), the next three most scarce technology skills are organisational change management (24 percent), advanced analytics (24 percent) enterprise architecture (22 percent) and IT strategy (17 percent).
Bev White, CEO, Harvey Nash Group said: "This unexpected and unplanned surge in technology investment has also been accompanied by massive changes in how organisations operate - with more organisational change in the last six months than we have seen in the last ten years. Success will largely be about how organisations deal with their culture and engage with their people. In a world where location has dissolved, where the office now includes the kitchen table, and where over 80 percent of IT leaders are concerned about the mental health of their teams, organisations will need to reformulate their employee offer to attract and retain the talent they need to support them through the pandemic, and beyond.
Bruce Goldsmith, Managing Director, Harvey Nash Australia said: "It may seem obvious that the threat to an organisation's cyber security would increase with so many employees working remotely, but for 4 in 10 that threat has become very real. This is exacerbated by the fact that the same number of organisations are also suffering from a shortage of skills in cyber. Hopefully with the increase in investment in cyber and privacy these organisations can protect themselves going forward, particularly as many employees won't be going back to the office full-time."
Guy Holland, Partner-in-Charge, KPMG Digital Delta in Australia said: "Technology has never been more important to Australia organisations' ability to survive and thrive in the new reality IT has proven its role as a critical enabler throughout the pandemic as organisations have rapidly transitioned to hybrid working. As the new reality continues to be shaped by economic recovery patterns unique to each sector and location, digital transformation will become a key driver of recovery and growth. One thing remains consistent; the urgency to act swiftly and decisively."
COVID-19: The business issues the board wants IT to address:
- Digital Transformation - For almost half (42 percent) of Australian IT leaders COVID-19 has permanently accelerated digital transformation and adoption of emerging technology (AI, ML, blockchain and automation).
- Marketplace Software as a Service (SaaS) - This is the big winner compared to 2019. Large-scale implementations more than tripled from 7 percent in 2019 to 23 percent this year. One in six organisations put one in place in the last 12 months.
Remote working and the new deal for employees:
- Remote working is here to stay - 85 percent of Australian IT leaders moved a significant part of their workforce to remote working, and 53 percent expect half or more of their employees to work from home in some capacity after the pandemic.
- Collaboration and culture - As a result of remote working, 74 percent of Australian IT leaders report increased collaboration between the business and technology teams and over half (58 percent) said that it has created a culture of inclusivity in the technology team.
- The new deal for employees - Work location and remote working has risen to become one of the five most important factors for engaging and retaining key technology talent during, and after, COVID-19. Leaders will therefore need to rethink how they attract and engage their employees in a world where physical location is no longer a prime asset.
Influence of the technology leader:
- Influence on the rise - Almost two thirds (62 percent) stated that the pandemic has permanently increased the influence of the technology leader.
- Board membership - Australia bucked a downward trend globally for board memberships, rising from 58 percent in 2018 to 60 percent of CIOs, IT Directors and CDOs on the main board in 2020.
Diversity:
- Women in Tech still an issue - The gender diversity of technology leaders remains broadly unchanged from last year's survey (11 percent).
- Promoting diversity - 28 percent in Australia of IT leaders feel that their organisation is successful at promoting diversity, and this has improved trust and collaboration in the technology team (52 percent), and engagement with the business (48 percent).
