90% of Large Enterprises are Maintaining or Increasing Digital Transformation Budgets Amid COVID-19
Though a majority of businesses have seen revenues declines amid COVID-19, 90% of organizations are maintaining or increasing their digital transformation budgets amid the pandemic. This has been finding of a global survey by Tata Consultancy Services among 300 senior business leaders from across North America, Europe and Asia.
Firms reporting revenue decreases were more common in Europe (70%) and North America (69%) than in Asia (64%). European firms are significantly less likely to expect revenues to recover with in a year (10%) compared to Asian (22%) and North American firms (28%). Nearly half of European firms foresee revenue recovery in one to two years. Asian companies (19%) said it is too early to tell when revenues will recover.
Despite the budget pressure, 90% of organizations have either maintained or increased their digital transformation (DX). The survey found that 66% of respondents have maintained their digital transformation budget, and 25% have actually increased it. Among those who have dedicated additional funds to digital transformation, the average increase is 33%.
According to the research though the commitment to digital transformation is strong, there is a significant lack of clarity on how to strategically move on multiple digital fronts cost effectively in this economic environment.
When asked what their main pandemic ¬related concerns are, respondents ranked “keeping employees healthy, both physically and emotionally” “continuing to serve the customers,” and “shifting the office work to remote work” as the top three. These were followed by ‘”managing our cash flow & budgets” and “IT security” as well as more than 10 other concerns.
Organizations are changing their technology investments due to the pandemic. Increases significantly outnumber decreases. The most common increases have been to technologies that support remote work. These include “collaborative technologies,” “cybersecurity” and “cloud native technologies.”
While the pandemic may have accelerated investment in these areas, TCS’s survey data suggest that these technologies will remain critical to how companies operate in the future, even after the pandemic is over.
An average of 64% of the workforce of the organizations surveyed worked from home during the pandemic. Prior to the pandemic, this was only 9% which means a seven-fold increase. That percentage is expected to remain elevated through 2025, when the average company projects 40% of its employees will work largely from home.
Geographically, 70% of employees in Europe currently work remotely followed by Asia Pacific (67%) and North America (60%). After the pandemic, those in the Asian region will be more likely to work from home (45% of the average workforce) than Europeans (41%) and North Americans (37%).