The 2021 Information Technology Budget: What Leaders are Doing to Creating an Effective Strategy

If 2020 has thrown us any curveballs, it’s that we should be actively expecting the unexpected. It feels that this has been the summary of this entire year. We’ve seen organizations of all sizes become impacted by today’s trends, and many have become far more creative in how they leverage technology to stay ahead.

So, when 2021 budgets were being done, many thought that IT budgets would take a hit despite the criticality of technology. As it turns out, this isn’t the case.

The latest Spiceworks Ziff Davis report shows us some exciting details into what organizations are doing with their technology spending.

Here are some interesting findings:

• Among all businesses, 64% enabled a remote workforce in 2020. More than half of all companies plan to retain flexible work policies even after the pandemic ends — which will necessitate additional technology investment.
• 80% of businesses surveyed expect IT budgets to grow or stay steady over the next 12 months.

One of the most interesting findings in the report was the small and medium enterprise segment metrics. Even though economic fluctuations greatly impacted these smaller companies, they’re still investing more dollars into technology.

As the report points out:

Mid-size businesses (100-999 employees) and enterprises are significantly more likely to increase budgets in 2021 due to supporting a remote workforce during COVID-19. Enterprises are significantly more likely to increase IT funds due to changes in business operations during COVID-19 and changes in regulations.

In diving a bit deeper, we saw that this spending on IT, even though it’s increasing, is much different in how dollars are actually allocated to technology. These changes became evident when some small and mid-sized businesses faired better during today’s climate than others. It’s also those organizations that got creative in how they achieved innovation, alongside increasing their IT budget spending.

Here’s what some of those leaders are doing.

Taking the Technology Dollar Further Than Ever Before
Feedback from industry leaders has primarily been that technology continues to serve important purposes for the business. This includes everything from basic back-office operations to ensuring a company can stay alive during uncertain times. However, specific points were made in how the technology dollar is going further and what it’s doing to support a much more digital economy.

• Remove clutter, and simplify. Complexity can grind a business to a halt. This is especially true in today’s business climate. It’s critical to remove management, infrastructure, software, and even access complexity from your environments. This includes portals, pieces of hardware, end-points, security solutions, and more. Just because something ‘works’ does not mean it’s bringing value to you or your users. Stagnant technology that requires investments needs to have a focus on your budget. Spending money to simplify is a crucial way to become more agile in the digital market.
• Find your balance between cloud and data center. Neither is here to cannibalize or take away workloads from the other. The good news is that we’re mature enough in the technology that leaders know when to be on-premise versus using the cloud. To that point, if you’re heavily invested in managing a data center, and it’s just burning cash, look to the cloud to offload some of those resources. On the other hand, if you’re experiencing cloud-sprawl and are spending too much on resource costs, look at a colocation or data center partner to offload.
• There is no more comfort zone when it comes to new technology adoption. This was a key consideration. Leading vendors around converged, hyperconverged, storage, virtualization, and security solutions have all indicated that demos and request for proof-of-concept projects have skyrocketed. And, the time between demo and deployment is much less. The feedback? If there is a technology that can fundamentally revolutionize your business approach and competitive stance in the market, try it out, validate results, and quickly jump on it. You’ll have a lot of success when involving business IT and non-IT personnel in the decision-making process.
• Convergence, cloud, and virtualization are your friend. Agile organizations remain relevant even in the hardest of times. Companies that have adopted containerization, cloud-based microservices, new virtualization solutions, and converged infrastructure are all seeing their IT investment dollars pay off. For example, convergence allows for a deep reduction in space and infrastructure required to support your business. Virtualization can help you deliver desktops and applications to users leveraging any device, and the cloud can give you the agility to support distributed users and customers. The feedback here is to know where you lack in your business in these areas and what you can do to improve. It’s not just physical infrastructure savings either; there are significant performance gains as well. Converting from legacy spinning disk to all-flash, for example, can help reduce space, create less heat in the data center, and vastly improve user experience.

Finally, there was a significant consensus regarding working with critical gear, which’s sometimes bought second-hand. That is if you’re planning on working with the ‘gray’ market, be very careful. Yes, buying products through the gray market can save you a tremendous amount; but you have to consider the cost. This can be everything from concerns around warranties to unknown tampering before the device went in your rack.

Some things to consider:

• Only work with trusted and certified OEM partners.
• Challenge suppliers and validate sources.
• If it’s too good to be true, it probably is.
• The last thing you want is unsupported or untrusted infrastructure.

More than ever before, organizations are findings ways to get creative with technology. That includes how they spend their IT budgets. We know that technology isn’t going anywhere, and we also know that IT is critical to surviving in a data-driven, digital world. A final point of feedback revolved around simplifying your technology ecosystem. Like our first point earlier, leaders stated that working with good partners helped them make better decisions and improve their technology investments. We’re asking our technology budgets to be stretched and work ever harder for us. A good partner can ensure you allocate those dollars to solutions that bring you as much value to your business and users as possible.

Arguably, that’s the most significant difference. We see fewer ‘nice-to-have’ purchases and far more investment in ‘must-have’ solutions. Like business leaders are doing today, it’ll be essential for you to know where your spending is going and how you can ultimately stretch that technology dollar.