Gartner Research

3 Key Findings From Gartner’s IT Cost Management Survey

Published: 20 July 2020

ID: G00732024

Analyst(s): CIO Research Team

Summary

Many CIOs are falling behind in their 2020 IT plans. To navigate the fast-changing consequences of COVID-19, CIOs are using scenario-based planning techniques, pausing initiatives to achieve savings and improve reallocation flexibility, and making investments in process digitalization and virtual collaboration tools.

Many CIOs and other IT leaders are under pressure to reduce costs while maintaining performance due to the fast-changing consequences of COVID-19. Gartner conducted a survey during April-May 2020 to understand how CIOs are reacting to cost pressures.

Three out of five leaders (60%) are running behind in meeting their 2020 IT plans (see Figure 1). Multiple reasons could account for this reality, such as declines in revenue, changes in customer demands, market disruptions, delays in payments and other external economic conditions.

Figure 1: Effect of COVID-19 on 2020 IT Plans

Since their plans are off track, CIOs and other IT leaders should revisit core strategic assumptions that previously shaped their priorities, budgets and investment decisions. Armed with a better understanding of how their circumstances and assumptions differ, CIOs and other IT leaders may need to revise their strategic plans. CIOs should use scenarios or "plausible futures" to help make strategic decisions. IT and business leaders need to take an adaptive approach to strategy creation to respond more quickly to risk and opportunity. The main purpose of such an approach is to move the enterprise from a rigid, top-down, calendar-based process to a more adaptive, event-driven strategy — a continuous learning activity, instead of a one-off planning exercise. For more about this approach, see

Preserving necessary resources for the most important initiatives and “keeping the lights on” are paramount to maintaining business continuity. Most organizations (69%) are continuing critical projects or carefully assessing their IT spending. In addition, almost half of surveyed organizations indicate that they are shifting IT resources to critical business outcomes and deferring any new spends and/or reducing current spend (see Figure 2).

Figure 2: IT Cost Changes Implemented in Response to COVID-19

To find the initiatives that are the best candidates to be “paused,” CIOs should work with business partners to look at the risks that could result from delay, as well as cost/benefits associated with resuming that initiative at a later date. Gartner profiled an that needed to reorganize in the face of financial pressure to address issues in operations, customer experience and revenue. The CIO identified the business value priorities across the organization and coordinated technology and business process changes to maximize value. By aligning IT efforts to business value priorities, the company was able to ensure IT focused its efforts and resources where they were most needed .

Many organizations are increasing or redirecting IT investment in areas such as virtual collaboration tools, platforms, conferences licenses, cyber and data security (see Figure 3). One of the key reasons behind this is the implementation of mandatory work-from-home policies and practices due to the pandemic.

Figure 3: Areas Where IT Funding Increased or Redirected

However, investing in virtual collaboration tools, platforms and other remote-work enablement technologies alone will not fully boost remote worker effectiveness. This is because staff is often slow-paced in adopting new technologies (even for the technology capabilities the enterprise already possesses). To overcome this challenge, CIOs should provide enterprise leaders with visibility into how technology drives core business priorities, and help managers encourage employees to take full advantage of the enterprise’s technology tools. To explore more about this approach, read our research on

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Case Study:

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Explore our step-by-step guide to identify and prioritize cost optimization opportunities for IT that best align with your organizational context, business strategy and IT strategy.

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Endnotes

Gartner’s IT Cost Management through COVID-19 Crisis survey was conducted online from 27 April through 9 May 2020 with 180 participants from Gartner Research Circle Members, a Gartner-managed panel. The results of this study are representative of the respondent base and not necessarily the market as a whole.

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