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The Real Cost of Pausing Your IT Projects Amid COVID-19 Economic Fears

Posted on 21st July 2020 by FinXL

The COVID-19 pandemic has placed enormous demands on business leaders. It has forced changes to working conditions and staffing levels and created a high degree of uncertainty about mid and long term economic conditions.

The sheer scale of the global outbreak and its ongoing unpredictability make it very challenging for executives to know how best to respond. Not knowing exactly how long the pandemic will last and exactly what impacts it will have leads many decision makers to be understandably cautious.

This may lead to decisions to delay or even cancel IT projects that were previously on the roadmap. But are these types of decisions helping or harming your organisation?

Caution and consequence

Case numbers and government business support plans are changing by the day. Medical advice and recommendations issued by public authorities to contain the spread of COVID-19 are also rapidly evolving and have sometimes been contradictory. As a result, many employers are having to rely on their own judgment and make some challenging decisions with limited information. 

There is a tendency towards caution during such a trying economic environment. This makes sense, as companies look to cut costs and reduce capital expenditure when future revenues become threatened or harder to predict.

However, McKinsey research shows that it could take up to five years for some of the most affected sectors to get back to 2019 year levels of contributions to GDP. Which means that business leaders holding off on IT project plans until more clarity emerges or business conditions return to normal may find themselves waiting a far longer time than they might have expected.

In addition, being overly cautious and holding off on new infrastructure or IT projects can lead to companies reducing their internal efficiency and effectiveness. It can also lead to reduced competitiveness as other companies choose to press on with their scaling and IT infrastructure plans.

Increasing reliance on technology

One of the clearest strategies to slow the rate of the transmission of COVID-19 has been to put in place policies to minimise human contact. Consequently many employers are continuing with staff work from home policies, restricting travel, and cancelling conferences and work events.

This is leading to an increased reliance on technology-based solutions to facilitate meetings and maintain employee connections and engagement. Therefore, despite the uncertaInty around future revenues, for most companies it actually makes sense to speed up rather than slow down the deployment of IT infrastructure upgrades. There is a clear trend towards faster and greater reliance on communications and computing technologies that support the working conditions of the post pandemic world.

The next normal

The COVID pandemic is something that we will have to learn to accept. It is unlikely to go away any time soon so it makes sense from a personal as well as business sense to accept that things are now different and rather than resist a new normality to instead push ahead to forging the next normal for your organisation.

Use the resources you have available now to push ahead with the goals and plans that best suit the future of the company. Avoid wasting time waiting for things to return to normal because things were already in transition to a greater tech reliant landscape even before the pandemic emerged. We may now just need to realise the future sooner than we’d planned.

If you’d like to learn more about how the COVID pandemic is reshaping the working world and how you can best position your organisation for the future, talk to FinXL.