Special Feature
Part of a ZDNet Special Feature: Tech Budgets 2021: A CXO's Guide

How CXOs are reconfiguring budgets in the new normal of increased remote work

With remote work commonplace, many companies are changing IT priorities as they set budgets for 2021.

Balancing budget pressures in a time of budget cuts

Remote work has become the norm this year, and 2021 is looking like it will be more of the same. The coronavirus pandemic has impacted companies across the globe as lockdowns resulted in office closures and widespread remote working. 

As a result, budget planning for next year has taken on a new spin, with some organizations pivoting and changing priorities. IT departments are bearing the brunt of the budget impact, since technology plays a crucial role for remote employees.  

Special Feature

Special Report: Tech Budgets 2021: A CXO's Guide (free PDF)

COVID-19 has accelerated trends like remote work and digital transformation, and forced IT leaders to adapt their budgets accordingly. Our Tech Budgets 2021 special feature examines how business leaders are spending their tech dollars.

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The ability to be flexible with budgeting is essential, as needs will change even during 2021.

"In many ways, the COVID economy has given us more focus. We postponed or canceled anything that was not closely aligned with our company's strategy and delivered tangible value," said ServiceNow CIO Chris Bedi.

At Pega, CFO Ken Stillwell said, "No-one really knows how long this pandemic will last or what the long-term impact will be, so it's critical to be able to pivot as circumstances change. We were able to do that early on in the crisis, most notably in shifting our robust events schedule into successful virtual events. Those businesses that can quickly adapt their budgets are more likely to survive in times of economic uncertainty and come out stronger on the other side. Today it's COVID-19, but tomorrow it could be something completely different."

Motus sent all of its employees home as soon as the pandemic began, and now they're permanently remote.

Craig Powell, president and CEO at Motus, said, "Our budget planning completely changed as a result of COVID-19. Real estate has historically been our second-largest budget item behind only our people, and our transition to permanent remote work allows us to reinvest that spend in our team members as well. This reinvestment includes technology upgrades, reimbursement for home office setups and usage, and partnerships that support wellness initiatives for our team members."

When people began working remotely, Stillwell said, "we had to shift everything we did to digital and ensure our staff could securely access our systems and work effectively from home. Our IT team handled this seamlessly and was able to scale our remote working solutions across our global employee base. For example, our sales and consulting teams quickly mastered collaboration tools like Zoom and Mural to run the types of workshops with clients that used to only happen in a conference room. In some cases, we found these digital tools to be even more effective than traditional means. We expect to see a hybrid of old and new technology taking hold when we come back to our offices, whenever that may be. As we typically do with crises, we will experience, learn, develop, and adopt new capabilities that we take forward."

Michael Litt, co-founder and CEO of Vidyard, said one of the biggest changes this year was on travel. "Like any company, we spent lots of money on travel for employees (T&E budgets), especially related to sales. In this new normal, when travel is next to impossible, we've naturally funneled that budget to video, which fortunately is our business, to keep a relational touch in team dynamics, sales, marketing, employee communication -- even in communicating with the media."

As a result, he said, "we've had to make certain our IT infrastructure and those of our employees working at home can handle the requirements of a distributed team. It's a good investment, as flexible work and video communication may well be the norm moving forward as it is proving to be equally as expressive, more efficient and therefore more effective than travel-based communication."

Business continuity plans at Kyriba were tested by the working-from-home (WFH) environment. Eric Adams, CISO of Kyriba, said, "Our team had a good and accurate understanding of the potential demand for secure interfaces to our more than 65,000 clients and 1,000-plus employees and consultants worldwide. What was unexpected was the need to replace hallway conversations that are often significant and allow colleagues to confirm the issuance of company-wide notifications of phishing scams. Recognizing this, the IT team adapted with internal security emails and specific phishing training to ensure our teams were better educated and informed. Having the first line of defense prepared, our back-end operations that filter for phishing scams and other malware were better reinforced."

Bedi said for his current budget,"We are looking at our IT investments and making sure the value is clear and achievable in the short-term, as well as relevant to the most important company strategies. Having clarity of specific value drivers allows us to prioritize features and enable a faster time to market. Additionally, we are leaning into automation initiatives through AI/ML that increase productivity and cut costs, freeing up funds that can be used for more strategic investments."

And for next year, he said, "We've refined our 2021 budget planning for the COVID economy, wherein the only things that are getting funded are those that drive tangible value, namely growing revenue, maintaining business continuity, and pursuing productivity."

Powell said for 2021 his IT budget is focused on expanding his company's reimbursement and mobile workforce solutions for his clients because their needs are evolving as a result of the rapid shift to remote work.

"We're not focused on the pandemic, but the impact of COVID-19 clearly factors into each decision we make. The world has shifted, and the result is a new normal for the way our team and our customers conduct business. We're fortunate to have positioned our team and platform for agility and have been able to quickly adapt with the changing landscape as a result. We're committed to helping our end-users do the same, and we must consider how COVID-19 has impacted them in order to accomplish that," Powell said.

But others, like Lynx Software, haven't had to change things around with their budget. Neeraja Vemulapalli, vice president of program management and quality, said, "COVID-19 has caused no change to our IT programs or engineering program spend."

Also See

What's on the minds of technology execs as they wrestle with tight budgets

Pandemic to IT: 'Do more with less!'

What is an IT director? Everything you need to know about one of the top jobs in tech

How to adjust your tech budget to survive or thrive in the pandemic recession

IT budgeting: A cheat sheet (TechRepublic)