New PwC Europe CIO survey: Investment in technology has paid off, however less investment expected

COVID-19 government restrictions have constituted a challenge to technology leaders, with the adequacy of existing IT facilities under sudden scrutiny. PwC asked more than 150 Chief Information Officers (CIOs) and Chief Digital Officers (CDOs) throughout Europe, including in Ireland, about the impact of the COVID-19 crisis on their business operations. The survey found that the majority of respondents moved successfully to home-working during the pandemic. Consequently, over eight out of ten expressed satisfaction with their organisations’ IT performance. However, while respondents are clearly shifting from survival mode too long term strategy, the survey reveals that there is likely to be less IT investment in the future. They do need to invest more in digital, not less.

CIO survey states IT infrastructure handled the immediate crisis well

89% of organisations moved their staff to work-from-home arrangements within a 5-day timeframe; 72% of these moved within 3 days. Not surprisingly, given those statistics, 84% of CIOs rate their IT performance as good or better (Ireland: 86%).

The survey responses also provide insight into some of the challenges and priorities that CIOs and CDOs face. The top digital “new normal” priorities  for organisations are:

• improving resilience in cybersecurity & privacy (54%)

• investing in digital customer experience (55%)

CIOs are shifting emphasis from tactical, operational solutions to long-term digital strategies supported by the entire business. They are looking outwards for digital opportunities, while cognisant of associated risks.

According to PwC Ireland’s Technology Consulting Leader David Lee, “it is now time for companies and organisations to shift the focus from survival mode to accelerating real digital transformation to help with those relentless challenges of cybersecurity, and what customers are now looking for online.”

Investment in technology has paid off, however future investment likely to be cut

Companies have been experiencing significant business dynamics in which global disruption and increased competition are creating complex, rapidly changing technology priorities. To respond to this organisations have invested heavily over the recent past in technology to support their business operations. The COVID-19 pandemic proved the worth of these investments with the majority of businesses in a position to pivot their organisations to work-from-home arrangements very quickly. More than four out of every five CIOs are satisfied with their IT business’ performance.

However, a significant proportion – four out of ten (41%) respondents – reported to be planning a reduction in IT investment in 2020 and beyond (Ireland: 36%).  A large majority of this (75%) said they would reduce this investment by more than 20%. This was similar in PwC’s recent survey of Irish chief finance officers where 37% reported to be planning a reduction in digital investment and significantly more than global counterparts (18%).  The focus for CIOs and CDOs now needs to shift to building differential digital capabilities and supporting digital transformation for the long run.  They need to spend more on digital, not less.

Robert Byrne, Partner, Technology Consulting, PwC Ireland, said: “COVID-19 has put a spotlight on how critical the role of technology is within organisations. More investment in digital is needed not less.  And particularly, with the move to remote working and the surge in online, companies who do not invest will be at a competitive disadvantage.    More than ever the technology strategy needs to be aligned to enable the overall business strategy.” 

Pay-back from technology investments

The success of COVID-19 business transitions has given CIOs and CDOs confidence to start looking outward at new opportunities for their organisations. Digital leaders see the opportunities for their organisations but rightly consider the associated risks such as cyber threats and privacy issues. One of the main priorities for respondents is investment in digital customer experience.

Robert Byrne concluded: “Given the current landscape, we now expect to see an accelerated drive towards digital across all sectors. This is a theme we saw prior to COVID-19 and we expect, as organisations seek to remain competitive, to see an acceleration to digitalisation to help attract and retain customers. Looking forward this means investing in strategic transformation by focusing on reimagining the possible in terms of new solutions and service offerings.

“CIOs and CDOs really need to keep their seats in the boardroom by acting as business partners ensuring all-new digital business models are well supported and embedded in firm activities across every firm level.”

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