Companies spent the equivalent of around US$15bn extra a week on technology to enable safe and secure home working during COVID-19, reveals the global 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 rise in just three months, as the global crisis hit, and lockdowns began to be enforced.
The largest technology leadership survey in the world of over 4,200 IT leaders, including over 100 leaders from mainland China and Hong Kong, analysed responses from organizations with a combined technology spend of over US$250bn. Surveyed CIOs in mainland China and Hong Kong together ranked the top three business aims that their management board is looking for IT/technology to address as: Improving operational efficiency, improving agility and speed to market, and developing new products and services.
Adam Stuckert, Partner, CIO Advisory, KPMG China in Hong Kong says: “The majority of CIOs in mainland China and Hong Kong have seen their technology budgets increase in the last year and expect that trend to continue over the next 12 months. They have prioritised analytics and systems of insight, new technology development, IT management and operations, and cloud as key areas for investment. For Hong Kong, security, privacy, and automation also factor into the top areas for investment.”
In mainland China, 32% of CIOs surveyed indicate their organisation has been implementing or piloting the usage of augmented/virtual reality; this figure rises to 34% for the usage of blockchain/distributed ledger;
Harry Huang, Partner, CIO Advisory, KPMG China, says: “As all mainland China CIOs survey agreed, the COVID-19 pandemic has increased collaboration between the business and technology teams, and also accelerated digital transformation and adoption of emerging tech such as artificial intelligence, machine learning, IoT and intelligent automation in China. A skills shortage is however preventing their organisation from keeping up with the pace of change. Companies must develop a talent management strategy through good remuneration and career progression opportunities.”
Skills shortage is at an all-time high, according to the survey, with 96% of mainland China’s CIOs think a skills shortage prevents their organisation from keeping up with the pace of change, much higher than the percentage of global CIOs (62%) or Hong Kong CIOs (52%) who indicate the same. While only about half (52%) of global CIOs expect a IT/technology headcount increase, in mainland China 74% of CIOs expect an increase. Mainland China CIOs indicate that COVID-19 has emphasized a shortage of artificial intelligence for their organisation, whereas Hong Kong CIOs see a shortage of cyber security highlighted by the pandemic.
The survey found that despite this huge surge of spending, and security & privacy being the top investment during COVID-19, 4 in 10 IT leaders report that their company has experienced more cyber attacks. Over three quarters of these attacks were from phishing (83%), and almost two thirds from malware (62%) suggesting that the massive move to home working has increased exposure from employees. Globally, organizations have struggled to find skilled cyber security professionals to support this dramatic shift to homeworking – and report that cyber security (35%) is now the most ‘in demand’ technology skill in the world. This is the first time a security related skill has topped the list of global technology skills shortages for over a decade.
In terms of the most important factors in attracting technology talent, mainland China and Hong Kong CIOs’ views are in line with global CIOs, ranking career progression opportunities, good remuneration and the brand/reputation of the organisation as the top three factors.
Other key findings from the world’s largest technology survey include:
- Digital companies pull away – Digital Leaders were more likely than non-digital leaders to make additional technology investments as a result of COVID-19 – with 50% more organizations that are ‘very’ or ‘extremely effective’ at using digital technologies spending an additional 21-50%. These investments focused on large-scale implementations of Distributed Cloud (42%) and SaaS (34%). The crisis has served to emphasize a growing divide between organizations driving their strategy through technology, and those that aren’t.
- Concerns over mental health – 8 in 10 IT leaders during COVID-19 are concerned about the mental health of their team, which has resulted in 6 in 10 IT leaders (58%) putting programs in place to support their staff.
- Cloud investment up – After investment in security and privacy (47%), investment in infrastructure and the cloud was the third 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% to 21%).
- Skills shortages – Prior to COVID-19, 2020 skills shortages remained close to an all-time high. Subsequently, shortages in tech talent have remained high, only marginally dropping compared to the 2008 Global Financial Crisis. In addition to cyber security skills (35%), the next three most scarce technology skills are organizational change management (27%), enterprise architecture (23%) and technical architecture and advanced analytics both at 22%.
Bev White, CEO of Harvey Nash Group said: “This unexpected and unplanned surge in technology investment has also been accompanied by massive changes in how organizations operate – with more organizational change in the last six months than we have seen in the last ten years. Success will largely be about how organizations 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% of IT leaders are concerned about the mental health of their teams, organizations will need to reformulate their employee offer to attract and retain the talent they need to support them through the pandemic, and beyond.”
COVID-19: The business issues the board wants IT to address:
- Workforce enablement – In previous years, this has tended to be a mid-ranking priority for technology leaders, but it has jumped to the top three after the onset of COVID-19 (from eighth place before the pandemic) driven by the mass move to remote working. Operational efficiency and customer engagement keep their top positions, but the purpose of these have changed in the light of COVID-19.
- Digital Transformation – For almost half (47%) of IT leaders COVID-19 has permanently accelerated digital transformation and adoption of emerging technology (AI, ML, blockchain and automation).
- Emerging technologies – Small scale implementations of Artificial Intelligence (AI) and Machine Learning (ML) have jumped up from 21% before COVID-19 to 24% now, a significant jump in a period of only a few months.
- Marketplace Software as a Service (SaaS) – This is the big winner compared to 2019. Large-scale implementations more than tripled from 7% in 2019 to 23% this year. One in six organizations put one in place in the last 12 months.
Remote working and the new deal for employees:
- Remote working is here to stay – 86% of IT leaders moved a significant part of their workforce to remote working, and 43% expect more than half of their employees to work from home after the pandemic.
- Collaboration and culture – As a result of remote working, 70% of IT leaders report increased collaboration between the business and technology teams and over half (52%) said that it has created a culture of inclusivity in the technology team.
- The new deal for employees – Work location & 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 (61%) stated that the pandemic has permanently increased the influence of the technology leader.
- Board membership – However, the downward trend for board membership continues from 65% in 2018 to 61% of CIOs, IT Directors and CDOs on the main board in 2020, suggesting technology leaders are finding ways to be relevant and influential without the need for permanent board / ExCo membership.
- Women in Tech still an issue – The gender diversity of technology leaders remains broadly unchanged from last year’s survey (11%).
- South America is a leader – With 16% of its technology leader’s female, South America has 60% more female IT leaders than the UK (10%). This could be interpreted as the reward for being a growing hub for female STEM entrepreneurs and actively running multiple programs to get women into the world of technology.
- Promoting Diversity – 24% of IT leaders feel that their organization is successful at promoting diversity, and this has improved trust and collaboration in the technology team (67%), access to the right skills (56%), and their teams’ ability to innovate (53%).