The recession fears are still being debated and inflation appears to be stubbornly high for at least the rest of this year, but when it comes to technology spending for businesses, everything is going full steam ahead.
A new survey from CNBC’s Technology Executive Council shows that more than three-quarters of tech leaders expect their organization to spend more on technology this year. No one said you will spend less.
Tech leaders say if they’ve learned anything from past recessions, it’s that technology is not a cost center but a business driver.
The areas they are focusing investments on include cloud computing, machine learning and artificial intelligence, and automation.
“In other cycles we’ve seen in the past, technology investment was one of the first casualties,” said Nicola Morini Bianzino, chief technology officer at professional services giant EY. “But after the pandemic, people realized that in a downturn, or even potentially downturn, we still need to maintain our technology investments.”
Danny Allan, chief technology officer at data protection firm Veeam, said “if you look at what’s happened in the last two years, it’s clear that technology is the sustainable differentiator that sets companies apart.”
That was certainly the message from veteran investor, LinkedIn co-founder and Greylock partner Reid Hoffman, who was a guest speaker at a recent CNBC Technology Executive Council town hall.
“In this environment, we are competing to get the most value and the longest term for our businesses,” he said.
Drive positive business agendas
Guido Sacchi, chief information officer of Global Payments, said that for many companies the technology agenda and the business agenda have become one and the same. In his conversations with Global Payments business unit leaders, he says that no executive has suggested that cutting technology spending is the right way to respond to a potentially sharp economic downturn.
“Everyone understands what technology brings to the table,” he said. “None of them want to cut anything,” he said.
Global Payments has a particular focus on cloud-native products and platforms, analytics, artificial intelligence and machine learning, areas it describes as essential to “driving positive business outcomes.”
Working with clients, Sacchi says it’s clear that technology is firmly woven into the fabric of everything his clients do to keep moving forward. The company works with many of the best quick service restaurants that have doubled down on AI and other advanced technologies to facilitate faster delivery and drive-thru pattern recognition for their customers.
The same goes for his healthcare clients who took advantage of telemedicine during the pandemic when patients were unable to see their doctors in person. “The pandemic has accelerated the deployment of many of these new technologies and now companies are not willing to back down,” Sacchi said.
The recent annual survey of CIOs from J.P. Morgan confirms it. It brought together the spending plans of 142 CIOs responsible for more than $100 billion in annual business budgets and found that IT budgets are growing, even if they don’t keep up with inflation. For this calendar year, surveyed CIOs see IT budget growth of 5.3% and 5.7% in 2023. That’s a big change from when the survey was conducted during the pandemic and IT budgets shrank in almost 5%.
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