Published Thursday 6th August 2020
There is no doubt that the Covid-19 outbreak has had a huge impact on the UK people, their way of life, businesses and of course the wider economy. For businesses it has created both uncertainty and adversity. With adversity comes change and change often presents opportunity.
From an IT perspective, companies have been forced to reconsider how to keep the business trading where possible, but in most cases without some or even all of the employees normally found at work in business premises. This meant somehow providing access to computer systems from many new, remote locations, creating a number of issues from provision of suitable hardware and software to security of the central systems. The IT team suddenly found itself responsible for minimising the impact on the ability of those people to be able to work collaboratively without the usual luxury of meetings, conventional visual aids or chats by the coffee machine and water cooler.
Everything had to suddenly be online with some surprising outcomes:
- The major hardware manufacturers suddenly found themselves deluged with orders for laptops and accessories as employees needed to have access to the systems. These devices were frequently bought in large numbers by companies and distributed once configured, rather than by the employees themselves, to ensure the company security policies were not violated.
- Share prices, valuations and profiles of previously relatively minor technology players in niche sectors of the IT supply chain suddenly ballooned. Ask Zoom. Video conferencing, webinar delivery platforms, shared cloud storage and collaboration software amongst others have enjoyed a mini boom.
- After years of resisting the work from home, or ‘WFH’ option, bosses were reluctantly forced not only to adopt it, but also to find ways to make it work effectively for them and to embrace the technology. Many of those people, having tried it now find it is actually a better and more cost-effective way to work than having everyone commute into an expensive central office and some have even subsequently closed offices, intending to retain the new way of working.
This has altered the asset and cost blend of many companies. Fixed assets look different with less property on the balance sheet. Travel expenses are significantly reduced, as are communications costs. However, some of these are then balanced out by increases in expenses where employees are claiming for more costs incurred whilst working from home. These should net out with a significant benefit to the employer in cost terms, although many companies will not have taken steps to lower the actual IT outlay in the first place, thereby missing out on some of the overall cost reduction benefits.
Companies will also find continued investment in IT is going to be required, albeit in different areas in order to maintain the optimum employee performance level in the ‘new normal’. This expenditure will look different to previous investments and is likely to be fraught with confusion as requirements are now so different. On the supply side, IT suppliers will need the business – even those who enjoyed unexpectedly high sales in the first half of 2020. The future remains uncertain and the combination of uncertainty and lower sales in general will create a lot of opportunity to gain preferential commercial terms.
Perhaps surprisingly, opportunities do exist for companies to refill cash coffers, optimise agreements, and use savings to fund continuing IT investment. Taking advantage of those opportunities requires working with a trusted partner who is able to identify and match the best opportunities to individual client scenarios. Clients with a potential interest in this area should contact Simon Atkinson at Expense Reduction Analysts for a discussion with their own specific needs in mind.
About the Author: Simon Atkinson, has an extensive career in the Information Technology market, spanning over a quarter of a century. Initially in technical roles, then rising through a variety of commercial to senior management positions, covering both UK and international remits, across EMEA (Europe, Middle East & Africa) to India and the Far East.