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Recession is in the air. Given the talk of inflation and economic uncertainty, enterprises are scrambling to decide whether to hit the brakes or accelerate spending to zoom past the competition. IT departments are no exception, and the reactions are mixed.
Analyst firms like Gartner forecast that IT spending will grow by 3% in 2022. Similarly, ETR research projects IT spending to rise 6.7% YoY. While both of these figures show a rise in IT spending, it is at a slower pace than in previous years. By contrast, some predict enterprise IT investment to increase over the next year.
After the challenges and uncertainty brought about by the pandemic, it is no surprise that some companies are confused. But it would be a huge mistake to hit the brakes now.
IT is critical to business productivity. IT teams are enablers, helping employees find and make the most out of their technology to get day-to-day work done. In fact, according to our research, 80% of IT professionals say that in the next 12 months, IT will be increasingly responsible for employee experience — which became a new charter for IT as a result of the pandemic.
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IT also creates massive efficiencies in business processes. IT staff serve as in-house experts on all of a company’s systems and applications and can help reduce waste in the organization’s tech stack. For example, they have the insight to detect “idle” applications that get no use and trim the fat where needed. Case in point: Recent research conducted by BetterCloud found that 40% of IT professionals consolidated redundant SaaS apps this year.
Last but far from least: IT secures a business’s most critical data. Despite consolidation, SaaS adoption is still on the upswing. On average, organizations use 130 SaaS applications, up 18% from last year. More apps mean more dispersed data and more administrative work for IT to secure that data. Every year, unintentional and intentional data leaks happen. It’s part of doing business in the digital workplace. And it’s IT’s job is to set guardrails. According to our research, 81% of IT professionals say they’re responsible for protecting sensitive data within SaaS apps.
The bottom line is that cutbacks in IT could have unforeseen implications. Understandably, there are times when making adjustments makes sense, but they need to be made carefully. Otherwise, it can have the opposite effect, potentially impacting productivity, creating operational inefficiencies and weakening a company’s security posture.
IT: What can be done in times of uncertainty?
First, use your insights to continue to fuel productivity and empower the business. You have a bird’s-eye view across the digital workplace that no other department has. You are perfectly positioned to share ideas on how to improve productivity, reduce friction and create greater efficiencies across the business.
Start with a thorough assessment. Figure out the answers to questions like: Which apps empower our employees to do their best work? Which apps are hindering productivity? Where does our sensitive business data live? Where are the biggest risks?
Once you know where the weak spots and risks are, see where you can create efficiencies. If it’s a headcount issue, consider hiring. The talent market in tech is scarce today, so it won’t be easy. But rest assured that if you’re a modern IT organization that gives its teams strategic roles, you will find the support you need.
If it’s a technology issue, consider reviewing the current productivity stack. What’s being used, and what’s not? By consolidating intelligently, you may be able to lower the number of SaaS apps without significantly impacting productivity. Low-hanging fruit includes targeting redundant applications and orphaned apps. If you have 300 apps, but employees only use half, purge, purge, purge. It will lighten the workload and cut costs.
If you have to pull back, look to reduce the factors that consume resources. A good place to start is automating workflows that chew up IT time and money. For example, automate repetitive tactical admin work for IT. Embrace zero-touch IT, a rising framework in modern organizations. Adopt technology that will help accelerate automation and give you insight and full control over your SaaS application ecosystem.
IT investment in the face of inflation
IT budgets will come under pressure as companies prepare for glum 2022 results in the current inflationary environment. If you are compelled to make reductions, make them surgically. IT is the motor for many business functions, and IT cutbacks tend to unnecessarily expose a company to greater risk.
Employee demands for impeccable advice, ready expertise and accessible support are through the roof. The 3% to 6% increase in estimated IT spend for 2022 may not suffice for your organization in 2023. As you prepare budgets and look at the resources IT will need to succeed, part of the business justification is simply that IT success pays off in digital transformation, productivity and business success.
Putting strain on your IT team by trying to do even more with fewer people can lead to a mass exodus. For CIOs who meet the expected recession with a plan and vision, this is an opportunity to up-level the impact and visibility that IT has within the organization. The coming year, despite bringing price and recession issues, is an opportunity for better resource allocation and beneficial innovation.
David Politis is CEO of BetterCloud.