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2020 Harvey Nash/KPMG CIO Survey: COVID-19 forces one of the biggest surges in technology investment in history

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Companies spent around US$15bn extra a week on technology during the pandemic’s first wave; Security and privacy the top investments

Huge surge in IT spend isn’t sustainable as 2020/21 technology budgets come under more strain

PETALING JAYA, 7 October 2020 —  It is revealed that in a week, companies spent the equivalent of around US$15bn[1] extra on technology to enable safe and secure home working during COVID-19, as reported in the 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[2] in just three months, as the global crisis hit and lockdowns began to be enforced.

For most organizations, while technology spend has risen dramatically during the pandemic, the survey found that technology budgets will be under more strain over the year ahead. Further analysis of the survey results show that digital leaders[3] were more likely than non-digital leaders to make additional technology investments as a result of COVID-19 – with 50% more organizations that are ‘very’ or ‘extremely effective’ at using digital technologies spending an additional 21-50%. These investments focused on large-scale implementations of Distributed Cloud (42%) and SaaS (34%).

“As digital leaders accelerate their investments, they will be better positioned to pivot and scale into new opportunities. But on the opposite side of that, those who had not invested in emerging technology were more likely to pull back their investments. So, this crisis has served to emphasize a growing divide between organizations driving their strategy through technology, and those that aren’t,” observed Datuk Johan Idris, Managing Partner, KPMG in Malaysia.

The survey also found that security and privacy are the top investments during COVID-19, with 4 in 10 IT leaders reported 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.

With the pandemic accelerating digitalization, IT leaders can look at implementing key cybersecurity measures such as embedding pragmatic remote working security controls to deal with COVID-19 themed threats, conducting stress test to review the organization’s security protocols, as well as bolster cloud transformation and cyber resilience.

Datuk Johan added, “The pandemic has been a wakeup call for many and has hastened the pace of digital transformation here in Malaysia. This dramatic shift required organizations to rethink their digital strategy to cope with the risks and upskill their talent without compromising on the security and privacy aspects of their organization, especially in this new way of working today.”

Other key findings from the world’s largest technology survey of over 4,200 IT leaders include:

 

  •  Digital Transformation – For almost half (47%) of IT leaders, COVID-19 has permanently accelerated digital transformation and adoption of emerging technology (AI, ML, blockchain and automation).
 
  • Emerging technologies – Small scale implementations of Artificial Intelligence (AI) and Machine Learning (ML) have jumped up from 21% before COVID-19 to 24% now, a significant jump in a period of only a few months.

 

  • Marketplace Software as a Service (SaaS) – This is the big winner compared to 2019. Large-scale implementations more than tripled from 7% in 2019 to 23% this year. One in six organizations put one in place in the last 12 months.

 

  • Cloud investment up – After investment in security and privacy (47%), investment in infrastructure and the cloud was the third most important technology investment during COVID-19, with the number of IT leaders actively considering Distributed Cloud nearly doubling in just 12 months (from 11% to 21%).

 

  • Concerns over mental health - 8 in 10 IT leaders during COVID-19 are concerned about the mental health of their team, which has resulted in 6 in 10 IT leaders (58%) putting programs in place to support their staff.

 

  • Skills shortages – Cyber security (35%) is now the most ‘in demand’ technology skill in the world. This is followed by skillsets in organizational change management (27%), enterprise architecture (23%), and technical architecture and advanced analytics both at 22% to make up the top 5 most scarce technology skills.

According to Alvin Gan, Head of IT-enabled Transformation at KPMG in Malaysia, this is the first time a security related skill has topped the list of global technology skills shortages for over a decade.

“The scarcity of cybersecurity skillsets is also felt in Malaysia. Statistics revealed there were only 10,733 cybersecurity professionals as of March 2020, which means the ratio is 1 to every 2,600 Internet users, although this is an improvement compared to 2015 where the ratio was 1:3,800[4]. This further accentuates that, locally, cybersecurity skills have been scarce and still remains as the most sought-after skill,” added Gan.

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 17 December 2019) and one during the pandemic (5 June – 10 August 2020), across 83 countries.

For more information about the survey and to request a full copy of the results, please visit www.hnkpmgciosurvey.com or view the infographic here.

Notes to editors:

1 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 on 3 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.

2 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 on 3 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.

3 Digital leaders are those that have organizations that are ‘very’ or ‘extremely effective’ at using digital technologies to advance their business strategy.

4 Cybersecurity Malaysia, Malaysian Communications and Multimedia Commission (March,2020)

About Harvey Nash

We are global leaders in technology recruitment, delivering solutions that connect organizations with the very best talent – from software developers to business transformation leaders. With over 30 years’ experience and global reach, we have an unparalleled knowledge and capability in all areas of technology. ​

www.harveynash.com

Harvey Nash is part of Harvey Nash Group, a global professional services organization with three key areas of focus: Technology recruitment, IT solutions and Leadership services. We partner with clients, helping them unlock the power of individual and team talent.

www.harveynashgroup.com

For media queries, please contact:

Kimberly Sammy

Manager, MARCOM

KPMG in Malaysia

Direct: +603 7721 3924

Email: kimberlysammy@kpmg.com.my

Yong Suk Zanne

Officer, Marketing & Communications

KPMG in Malaysia

Direct: +603 7721 3836

Email: sukzanneyong@kpmg.com.my

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