Post-Covid Efficiency Will Enable Greater Long-Term Success

Getting the most bang for the buck will be the focal point for enterprise decision makers as the business world works to extract itself from the fears, uncertainties, and outright dangers of the Covid-19 pandemic.

A Gartner, Inc. survey of 103 CFOs and senior finance leaders taken at the end of May revealed that CFOs will continue to scale back spending by 4% to 11% across their selling, general, and administrative expenses (SG&A) functions for 2020. Marketing budgets have already been cut by 14% on average against their original 2020 plans, with plans for additional 11% cutback in the remainder of 2020, resulting in a 25% spend reduction for the year. Real estate budgets have already been cut 7% on average, with plans for an additional 8% reduction in 2020. In addition, CFOs are projecting more cost cuts this year of 5% or more to IT and Communications, as well as a number of other corporate departments during the remainder of the year.

Business confidence levels declined in the last week of May, according to IDC, which reports that IT buyers in the US and elsewhere expect total IT spending to decline by more than previously anticipated. Significant spending declines are predicted for traditional technologies including PCs, peripherals, software applications, and project-oriented IT services.

Meanwhile, Trusted Advisors in the agent community and elsewhere will be playing a key role in helping their customers leverage Information Technologies to maximal effects in the midst of a projected widespread spending slowdown. Numerous partners report that those discussions are currently under way, and that demonstrating a strong business case will be even more important to securing necessary budgets.

Enterprise decision makers should take a hard look at top priorities with particular emphasis on how to bundle together key priorities in order to accomplish what needs to be done at the highest levels of efficiency and cost-effectiveness. Some projects will move forward immediately, others will be delayed, and a few might be determined to be not so important, after all.

This is not the time to completely circle the wagons from an IT spending point of view. It is instead a time to look at the circumstances creatively, with an eye towards leveraging Information Technology as a competitive differentiator. While this advice is nothing new to our industry, the current business environment will raise our game even more than in the past. Each industry will need to develop strategies based on their individual circumstances.

Efficiency will reign supreme for the immediate future. But it will also make us better at what we do, and positively impact what we can accomplish over the long haul. Your Trusted Advisor can play a critical role in this objective.  Feel free to reach out to them.