Where And How To Adjust Tech Budgets In The Pandemic Recession

Most businesses and governments face the prospect of revenues dropping by 10%, 20%, 30%, or more. CIOs will come under unprecedented pressure to cut tech budgets. To help them, Forrester analysts have gone through all the categories that make up a tech budget and prepared advice on where CIOs should look to cut — or, in some cases, increase — spending. Our advice is tuned to firms facing three modes of operating through the recession: 1) survival mode, with revenue declines of 30% or more; 2) adapt mode, with revenue declines of 5% to 25%; and 3) growth mode, with revenue flat or even increasing.

Key takeaways:

• CIOs who need to cut tech budgets should start with the traditional cost-cutting areas of hardware, telecom services, and new project spending.
• However, demands to support work-from-home arrangements and the need to strengthen security, risk management, eCommerce, customer experience, and employee experience will constrain how much CIOs can cut those categories.
• So, CIOs will have to look more heavily at their existing software and outsourcing contracts for the cost savings they may need to deliver and even look at where to cut staff spending. 
• CIOs also need to be able to shift gears, if their firm changes mode from growth to adapt, adapt to survival, or survival back to growth.
• We provide a detailed checklist of 70 tech budget items and how to address each item based on your firm’s mode of operations.

Target audience level: all levels