China CIOs ahead in usage of technologies in intelligent automation, artificial intelligence/machine learning, edge computing/IoT, blockchain and augmented/virtual reality
Hong Kong – 24 September 2020 – Companies spent the equivalent of around US$15bn extra a week on technology to enable safe and secure home working during COVID-19, reveals the global 2020 Harvey Nash/KPMG CIO Survey. This was one of the biggest surges in technology investment in history – with the world’s IT leaders spending more than their annual budget rise in just three months, as the global crisis hit, and lockdowns began to be enforced.
The largest technology leadership survey in the world of over 4,200 IT leaders, including over 100 leaders from mainland China and Hong Kong, analysed responses from organizations with a combined technology spend of over US$250bn. Surveyed CIOs in mainland China and Hong Kong together ranked the top three business aims that their management board is looking for IT/technology to address as: Improving operational efficiency, improving agility and speed to market, and developing new products and services.
Adam Stuckert, Partner, CIO Advisory, KPMG China in Hong Kong says: “The majority of CIOs in mainland China and Hong Kong have seen their technology budgets increase in the last year and expect that trend to continue over the next 12 months. They have prioritised analytics and systems of insight, new technology development, IT management and operations, and cloud as key areas for investment. For Hong Kong, security, privacy, and automation also factor into the top areas for investment.”
In mainland China, 32% of CIOs surveyed indicate their organisation has been implementing or piloting the usage of augmented/virtual reality; this figure rises to 34% for the usage of blockchain/distributed ledger; 45% for edge computing/IoT; 56% for artificial intelligence/machine learning; 57% for distributed cloud technologies; 61% for SaaS marketplace platforms usage; and 67% for intelligent automation, all except the distributed cloud technologies and SaaS marketplace platforms areas are ahead of the overall global averages.
Harry Huang, Partner, CIO Advisory, KPMG China, says: “As all mainland China CIOs survey agreed, the COVID-19 pandemic has increased collaboration between the business and technology teams, and also accelerated digital transformation and adoption of emerging tech such as artificial intelligence, machine learning, IoT and intelligent automation in China. A skills shortage is however preventing their organisation from keeping up with the pace of change. Companies must develop a talent management strategy through good remuneration and career progression opportunities.”
Skills shortage is at an all-time high, according to the survey, with 96% of mainland China’s CIOs think a skills shortage prevents their organisation from keeping up with the pace of change, much higher than the percentage of global CIOs (62%) or Hong Kong CIOs (52%) who indicate the same. While only about half (52%) of global CIOs expect a IT/technology headcount increase, in mainland China 74% of CIOs expect an increase. Mainland China CIOs indicate that COVID-19 has emphasized a shortage of artificial intelligence for their organisation, whereas Hong Kong CIOs see a shortage of cyber security highlighted by the pandemic.
The survey found that despite this huge surge of spending, and security & privacy being the top investment during COVID-19, 4 in 10 IT leaders report that their company has experienced more cyber attacks. Over three quarters of these attacks were from phishing (83%), and almost two thirds from malware (62%) suggesting that the massive move to home working has increased exposure from employees. Globally, organizations have struggled to find skilled cyber security professionals to support this dramatic shift to homeworking – and report that cyber security (35%) is now the most ‘in demand’ technology skill in the world. This is the first time a security related skill has topped the list of global technology skills shortages for over a decade.
In terms of the most important factors in attracting technology talent, mainland China and Hong Kong CIOs’ views are in line with global CIOs, ranking career progression opportunities, good remuneration and the brand/reputation of the organisation as the top three factors.
Other key findings from the world’s largest technology survey include:
Bev White, CEO of Harvey Nash Group said: “This unexpected and unplanned surge in technology investment has also been accompanied by massive changes in how organizations operate – with more organizational change in the last six months than we have seen in the last ten years. Success will largely be about how organizations deal with their culture and engage with their people. In a world where location has dissolved, where the office now includes the kitchen table, and where over 80% of IT leaders are concerned about the mental health of their teams, organizations will need to reformulate their employee offer to attract and retain the talent they need to support them through the pandemic, and beyond.”
COVID-19: The business issues the board wants IT to address:
Remote working and the new deal for employees:
Influence of the technology leader:
- ENDS -
 Over an eight-week period (5th June – 10th August 2020), global IT leaders reported a median additional technology spend of 5% to deal with the COVID-19 crisis as a percentage of the total of their annual IT/technology budget. Data from Forrester, published 3rd February 2020, shows that global IT spending was forecasted to reach US$3.5trillion in 2019 and US$3.59trillion in 2020 (https://go.forrester.com/blogs/new-forrester-forecast-shows-global-tech-market-growth-will-slip-to-3-in-2020-and-2021/). As global IT leaders report a median additional spend of 5% of their IT budgets on technology to deal with the COVID-19 crisis, this was an additional surge/spike in IT spending of around US$175bn (5% of the US$3.5trillion global IT spend in 2019 forecasted by Forrester) – to deal with the initial impact of COVID-19. This is equivalent to around US$15bn per week during the first three months of the crisis, when this spend would have undoubtedly taken place to support the sudden move to remote/distributed working.
Analysis by Harvey Nash and KPMG of a range of publicly available global data on IT/tech spending shows that annual rises in spend have tracked at 5% and below for more than a decade, reaching a peak of 5% growth in 2018. For instance, Forrester research, published 3rd February 2020, found that the growth in global spending on tech goods and services dropped from a peak of 5% in 2018 to 3.9% in 2019. (https://go.forrester.com/blogs/new-forrester-forecast-shows-global-tech-market-growth-will-slip-to-3-in-2020-and-2021/). As global IT leaders report a median additional spend of 5% of their IT budgets on technology to deal with the COVID-19 crisis, this level of spend, in just three months, is more than their annual budget rise.
Digital leaders are those that have organizations that are ‘very’ or ‘extremely effective’ at using digital technologies to advance their business strategy.
In its 22nd year, the 2020 Harvey Nash/KPMG CIO Survey is the largest IT leadership survey in the world in terms of number of respondents. The survey of over 4,200 CIOs and technology leaders took place in two pulses - one prior to COVID-19 (commencing on 17th December 2019) and one during the pandemic (5th June – 10 August 2020), across 108 countries. For more information about the survey and to request a full copy of the results, please visit www.hnkpmgciosurvey.com.
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