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Stop worrying and learn to love COVID-driven digital transformation, says Gartner

Survey sees CIOs loosening purse-strings, execs feeling mushy about IT crowd (but there are caveats)

As the nights draw in, COVID-19 lockdown restrictions tighten across Europe, and the number of cases in the US accelerates, techies who despair may turn to Gartner - the omniscient overseer of IT trends - for a bit of light relief.

In its autumnal conference, set to be held in sunny Barcelona but now an online-only affair, the research house was tempting IT departments to look on the bright side. Sort of.

Despite the global pandemic ravaging human health, being responsible for socially restrictive lockdowns and body-slamming the global economy, 69 per cent of boards of directors want to accelerate their digital business initiatives as a result of the pandemic, the analyst firm crowed.

Unveiling its survey of around 1,877 CIOs, Gartner said the overall IT budget position was a lot better than it could be. A 2 per cent rise between 2020 and 2021 was expected by CIOs across the globe, with strongest expectations in Europe (2.7 per cent) and the weakest in North America (1.2 per cent). This compared favourably with the comparable economic crash after the financial crisis, when IT leaders expected a drop of 8 per cent.

Sorry to dampen the mood, but while we can welcome confidence in IT spending, Gartner’s latest research is not the whole story, even by its own reckoning. The research firm itself previously forecast IT spending in 2020 to total $3.6 trillion, down 5.4 per cent from $3.81 trillion in 2019. Although it is set to increase 4 per cent between 2020 and 2021, it won't recover to the 2019 level; it will be about $60bn less at $3.75trn.

It turns out, some CIOs are actually less optimistic than Gartner in terms of IT investment. And, according to the survey data, the CIOs' optimism depends not so much on their location, but the sector they work in: CIOs in retail, life sciences, and banking expect strong growth in IT budgets while transport, automotive and higher education expect to see them cut next year.

Even that may lack detail. For example, the generic category of transport includes air travel, an industry that was practically brought to a standstill by the pandemic. Industry association IATA has said 2020 passenger figures will be half that of 2019, and it expects 2021 traffic to be 34 per cent below 2019 levels.

Nonetheless, Gartner's CIO survey found overall IT investment is driven by a board-level perception that, given the digital gold-rush during the pandemic, IT departments are finally worth their time. Nutanix made similar claims last month in its survey.

Board-members seeing the relationship with IT as "transactional" or "at risk" fell from 33 per cent to 16 per cent between 2019 and 2020. Meanwhile, those viewing it as a "partnering" or "trusted" relationship climbed from 67 per cent to 84 per cent over the same period.

Gartner research director Tomas Nielsen said on a conference call with The Reg: “From an outside, IT point of view, there is an acceptance and recognition of the fact that COVID-19 has allowed CIOs to deliver, trust has gone up and board of directors are increasingly willing to continue that investment journey.”

Nielsen said that, anecdotally, CEOs have been struggling to see the value of digital transformation. But now the tech department is seen to be “saving the company during COVID-19”, at least for one CIO he worked with, apparently.

“That's the sentiment, and the challenge is for CIOs to build on it. For 2021, it's about CIOs accelerating that journey and capitalising on their gains,” he said.

Of course, the picture could have been tinted slightly by survival bias, that logical error of concentrating on companies that have made it through the storm, discounting those that have not because we don’t see them in the data. And across the economy, there will be fewer survivors. For example, UK bankruptcies are set to climb 27 per cent this year, with a 39 per cent rise expected in the US, according to trade credit insurer Atradius.

While it is wise to take some of Gartner’s words with a large pinch of salt, it’s helpful to know the thinking that might inform management’s next bright idea for technology strategy, even if it does present a rose-tinted world view. ®


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