Experts Discuss IT Operations Strategies During an Economic Slowdown

The world of IT operations is witnessing major changes with the Covid-19 pandemic. Gartner’s recent Business Continuity Survey found that only 12% of organizations were highly prepared to handle the impact of the coronavirus. With technology spend expected to decline by 8% this year, IT leaders will need to prioritize the right technology investments to meet customer, employee, and stakeholder expectations.

OpsRamp recently hosted a webinar featuring industry experts Donnie Berkholz and Mike Kavis to discuss IT Operations Strategies During An Economic Slowdown. Given the budget cuts and economic uncertainty facing organizations, the panelists discussed how technology leaders could not just survive but thrive in the coming months.

Donnie and Mike discussed the results of our recent survey which asked IT executives about technology priorities, budgets, and hiring plans in the current economic environment. Here are edited highlights of our interactive discussion with Donnie and Mike:

Digital Transformation Stays On

Enterprises are doubling down on digital transformation. One of the interesting findings of the survey was that 73% of IT operations and DevOps leaders expect to either accelerate or maintain their digital transformation initiatives.

Donnie Berkholz (DB): Covid-19 has forced a lot of organizations to suddenly support remote work environments. Such a transition can happen only in the digital world. Companies who were earlier skeptical of digital transformation are now prioritizing and accelerating the launch of new digital products and services.

Mike Kavis (MK): Even though overall IT spending may be down, digital projects will see an investment surge. The pandemic has created a sense of urgency and forced organizations who were earlier reluctant to transition to digital. The focus will be on making the right digital investments that can help organizations become more efficient and effective. For some companies, digital will now become a matter of survival.
Increase in annual technology spending. Our survey shows that 58% of IT leaders expect to either significantly or moderately increase their technology budgets while 38% expect to either significantly or moderately decrease overall IT spending.

DB: This was the most surprising data point from the survey. Increased spending on technology today is due to unplanned budgets for employee productivity tools and new digital channels to support remote work. Technology spending has grown today as budgets are getting re-allocated from other functions to enterprise IT.

MK: Technology spending is very sector-specific. Some industries like travel and non-grocery retail have been badly affected and seeing a big reduction in IT budgets. Other verticals like government and healthcare are facing a massive increase in demand for their services and will need to invest more in technology.
Staying agile during the downturn. The survey found that agile delivery (64%) and cloud cost optimization (62%) are the two most important priorities for IT leaders today, underlining the twin needs for customer-centricity and fiscal discipline.

DB: During a pandemic, it is easy to understand the difference between companies that have invested in agility and the companies that haven’t. Agility does not mean using a certain framework like Scrum but more about whether organizations can pivot quickly when something drastic like this happens. Organizations that have invested in agile and DevOps approaches can iterate and change faster during a crisis.

MK: The industries that have been hit the hardest are now taking a hard look at cloud cost optimization. They are analyzing how they are currently delivering their services and how to run them more cost-effectively. This will be a catalyst for greater cloud adoption but with a more pragmatic and strategic approach as compared to before.

Technology Priorities for 2020

Renewed investments in security and multi-cloud infrastructure. The three areas where IT operations teams will increase funding this year include information security and compliance (62%), big data and analytics (46%), and public and multi-cloud infrastructure (45%).

DB: Business leaders, who are not used to leading remote teams, are driving increased investments in information security and analytics to track the performance of their teams and check whether the intended business outcomes are being achieved.

MK: Cybersecurity threats have increased multifold with an increase in remote work. Information security and compliance will remain a number one priority regardless of the specific technology stack. Investment in analytics is not a surprise given the importance of measuring the impact of digital transformation initiatives.
A new breed of performance monitoring tools takes center stage. Enterprises are looking at modern IT incident management/AIOps (69%), cloud-native observability (51%), and network performance monitoring (51%) tools for ensuring service availability and delivering compelling user experiences.

DB: The ‘self-healing’ aspect of AIOps is appealing to IT leaders. Organizations don’t want to invest a lot of their time and effort in managing infrastructure as it doesn’t add any business value. This has increased the adoption of AIOps and machine learning.

MK: Humans can longer cope with the complexity of modern IT environments and need machines to help them. Artificial intelligence for IT operations (AIOps) has given us the ability to assist, automate, or take over self-healing of applications.
Managed service providers need to ramp up now. Our survey shows that more than 90% of technology leaders expect to use managed service providers for technical expertise, knowledge, and real-time security.

DB: The survey pretty much nailed this point. You work with partners when they can bring some unique value which complements what you’ve got in-house. MSPs help you focus on your core competencies while they do the undifferentiated heavy lifting for you.

Delivering Business Value: Time For An Equal Partnership

IT leaders are still struggling to align and partner with their business counterparts on joint organizational outcomes. The survey shows that business-IT alignment (41%) is the biggest challenge for operational transformation.

DB: Business-IT alignment has an endemic challenge because a lot of technology leaders tend to think they lead their group instead of owning technology for the entire company. IT executives don’t often take ownership of proposing and delivering business initiatives that happen through technology. A lot depends on who the CIO reports into and more importantly, what the CEO thinks about technology. Leadership alignment and support are key to overcoming operational challenges.

MK: Business-IT alignment has always been a challenge. However, there is hope that the pandemic will bring these two teams together and help them drive business value. Business-IT alignment is more about culture than strategy. Business and IT partnerships happen when organizations are willing to change their culture and adopt a collaborative approach to delivering value.

New Challenges, Old Problems

IT leaders face difficult operational challenges with an unknown end date to digital-only, remote work. Yet the greatest hurdle they face is nothing new: alignment with the business. To remain viable, IT leaders will need to demonstrate how their work has a transformative impact on business goals.

Catch the entire conversation by accessing the webinar slides below or by watching the on-demand Tech Talk to learn more IT Operations strategies during an economic slowdown. Here is a Twitter moment that captures all the key insights of the webinar.

IT Operations Strategies in an Economic Slowdown from OpsRamp