by Bob Violino

Best bang for your IT budget

Aug 03, 2020
BudgetingIT Leadership

With budgets uncertain and project priorities pivoting in the wake of the pandemic, IT leaders are finding several key areas worth investing in.

Tracking trends  > data / charts / graphs / money / budgets / salaries
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For many IT departments, the pandemic and its economic repercussions have led to constrained spending on technology products and services — if not outright budget cuts.

This is leading many IT leaders to rethink their strategies on a short-term and medium-term basis. The current environment is forcing tech executives to consider which areas cannot afford any cutting, and where they might want to direct spending to get the most out of their IT dollars.

Much of the shift in IT spending these days has to do with supporting the vast numbers of people now working from home. While some workers have returned to corporate offices as regions move out of lockdown, IT leaders are anticipating that a good number of employees will be working remotely for the foreseeable future — and they are planning accordingly.

Here are some of the areas IT leaders deem to be most important from a budget standpoint, or where their organizations will most likely gain a solid return on investment (ROI) in the coming months.

Remote work and employee/customer access

For most organizations, the pandemic has led to a massive shift to a work-from-home model that in many cases may be permanent or at least long term. In industries such as healthcare, it has also meant learning how to serve consumers remotely. This requires investing in technologies that support remote work and remote access to services.

“This pandemic has forced me to rethink the way my team operates,” says Isaiah Nathaniel, CIO at Delaware Valley Community Health (DVCH). “We had to rethink how we delivered our most important service, caring for our patients, remotely.”

From an IT perspective, the company has had to make a significant investment to support the transition, Nathaniel says. This includes increased spending on its wide area network (WAN) to support teleworking, as well as its local networking and WiFi network to enable telehealth programs.

“And of course we also had to think about storage, virtualization, and our application development layer,” Nathaniel says. “But ultimately, you need to have the right infrastructure to enable all the other services.”

With its revamped approach, DVCH has focused on serving five areas: patient pre-arrival, arrival, entry, encounter, and post-visit. “Our IT spend has actually increased in those areas due to telehealth, while the budget in other areas of our business has decreased,” Nathaniel says. “We’ve invested in our patient portal, clinical outreach, social distancing registration kiosks, and WiFi capacity to improve the patient experience.”

The IT team was able to do this quickly because it had invested in a hyperconvergence platform from Nutanix right before the pandemic hit, Nathaniel says. Nutanix’s backend system enables the company to provide services to patients and providers quickly and efficiently, he says.

“These were significant investments, but from an ROI perspective making the decision to spend money on [the platform] has ended up saving us tons of money in the long run,” Nathaniel says. Prior to deploying the technology, DVCH did not offer telehealth because its infrastructure couldn’t support it.

“Now that we do, we’ve noticed an increase in positive patient experiences, since we’re meeting the patient where they are and allowing for more flexibility,” Nathaniel says.

Customer communication and engagement

The pandemic has not only changed the way IT organizations support employees, but how they enable customer experience as well. For many businesses such as retailers, transactions that were once handled in person are now conducted remotely, which can require a shift in support.

“Letting your consumers know that you are still active and present will change the way consumers interact with your business,” says Omer Subedar, IT manager at Peninsula, a provider of human resources outsourcing services.

For example, prior to the pandemic the firm conducted purely in-person meetings to discuss its service offerings. Following the lockdowns Peninsula transitioned to a video conferencing platform but found that communicating with prospects via video conference has its own challenges, such as heavy downloads and security concerns.

The company invested in a browser-based collaboration tool from RingCentral that enables its contact center agents to connect to prospects without having them download any applications or software.

The platform also provides data that enables the firm to identify trends, spot opportunities, and optimize workflows for its sales and service staffs, which in turn allows staffers to respond to inquiries faster and more accurately.

Software company Freshworks is also investing in customer engagement tools. “Customers are harder to get than ever before,” says Prasad Ramakrishnan, CIO. “Not focusing on retaining and expanding your existing customer base poses an existential threat to organizations.”

Customers have more options and are more discerning and demanding when selecting technologies, Ramakrishnan says. “They’re expecting a frictionless consumer-like experience with the product and support.”

In most cases, the reason for negative customer experience is due to the way internal systems and processes are configured, Ramakrishnan says. “Today, a poor customer experience and lack of engagement is a death knell and a chief underlying reason why customers churn,” he says.

Freshworks is investing in products that enhance the initial engagement with customers as well as ongoing interactions. These include communications tools such as chat, instant messaging, and

automation delivered via artificial intelligence, machine learning, and bots.

Security — especially in support of remote workforces

In the past few years, investments in cybersecurity tools and services have been on the rise. But the pandemic and resulting work-from-home shift has made systems and data protection an even bigger concern for many organizations.

“Businesses should be investing in ways to keep their remote staff safe and secure,” whether it’s deploying virtual private networks (VPNs) or secure virtual desktop infrastructure (VDI) sessions, Subedar says.

During the pandemic, Peninsula has seen a sharp increase in phishing attacks and other security events within its email platform. “We no longer have an enterprise network in place protecting all our workspaces, so it’s important we have a solution to keep things safe,” Subedar says. “These [security] implementations have a huge effect if something did go wrong.”

Companies’ office real estate and corporate network-related investments will be replaced by security-related investments, Ramakrishnan says.

“Securing endpoints and the routes that a company’s web traffic takes via unsecured and partially secured home networks will become key investment areas,” Ramakrishnan says. “CIOs will need to make meaningful investments in zero-trust security to keep bad actors out.”

As such, it will be key to redeploy existing budget to capacity planning and capacity expansion for virtual environments, as well as data loss prevention (DLP), Ramakrishnan says. “In addition, it’s only a matter of time before a new set of regulations are introduced to handle this changing environment,” he says. “Any new regulations will require investments in technology to effectively comply and address them.”

Application programming interfaces (APIs)

As consumer buying patterns change with the rapid shift to online commerce, it’s more important than ever that organizations create seamless, data-driven customer experiences, says Charlie Li, executive vice president of application and cloud technologies at technology consulting firm Capgemini North America.

“APIs, which connect data across applications, systems, and devices, are key to these experiences,” Li says. “Because of this, we’ve seen an increased demand for APIs, enabled by cloud-native architecture, that help companies respond to spikes in volume and embrace new capabilities.”

For example, the firm has been working with a quick-service restaurant on its API-enabled online ordering platform as the company faces unprecedented change given that customers now engage exclusively on online channels. “The company has seen a 10-fold increase in online traffic over this time period,” Li says.

Another client company has leveraged APIs to streamline the ordering process across multiple delivery service providers for an optimal ordering experience for customers.

People with skills to deliver high-quality services

For many companies, the pandemic and its economic impact has led to layoffs and furloughs of all types of workers. But some IT leaders see investments in skilled professionals as essential to moving important projects forward.

“We identified key areas within our budget that we felt comfortable cutting or pushing to 2021 that would not directly impact our ability to deliver value to the business,” says Brian Balzer, executive vice president, digital technology and business transformation at bottling company G&J Pepsi-Cola Bottlers.

“However, we were diligent not to cut headcount,” Balzer says. “We have a lean organization as it is, but it’s our people that have the system knowledge, business knowledge, and the ability to keep the company running. Without them, we would risk supporting the business day to day.”

The company has also taken steps to make the work environment more appealing to employees. For example, it has redesigned its office space for improved collaboration within internal teams and with business partners.

“We have open work areas, mobile MS Surface stations and small conference rooms for isolated areas when needed,” Balzer says. Deploying cloud services has also played a key role in enhancing work processes.

“Had we not had the foresight to have all cloud-enabled applications across our environment, we would have been in a much different position” because of the pandemic and work-from-home demands, Balzer says. “We need our brightest and most creative minds solving business problems, not supporting servers and hardware.”

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