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Though survey respondents identified the economic slowdown, inflation, and rising energy as the three leading factors impacting their organizations, 58% say that investment in technology has increased because of these pressures, while only 26% say they have invested less, and 16% say they have maintained the same level of investment but have reprioritized based on evolving needs. Looking forward, 69% of those surveyed say the current economic climate is leading them to invest more in IT infrastructure, while only 31% plan to reduce their overall investment.
“While organizations are increasingly scrutinizing their IT expenditures and searching for greater efficiencies, the survey results underscore a broad understanding that investment in technology is a key factor in helping businesses grow and compete during challenging times,” said Jeff DeVerter, Chief Technology Evangelist at Rackspace Technology. “We’re not seeing organizations draw back and retreat. Instead, they are allocating more resources to projects that can have the biggest impact on efficiency and competitiveness.”
Seeking Efficiencies Through the Cloud, Innovation
According to the research, IT organizations are adopting a variety of approaches to adjust to the current economic climate, led by an increased focus on cloud projects that can drive efficiencies (62%) and investment in innovation projects (58%). Across all global regions, leaders identified cloud projects as the single most important factor in navigating the current economic climate, as well as the leading source of re-prioritized investment versus their original budget allocation.
Moreover, when asked to rank their leading areas of investment focus for the next 12 to 18 months, cloud operations emerged as the most important strategic IT priority, at 75%, followed by security (60%) and digital transformation (51%). More than 30% of respondents also say they either have already moved or plan to move all their IT infrastructure to the cloud, while a further 45% only expect a small percentage of infrastructure (between 1% and 10%) to never move to the cloud.
As they increase their cloud investments, organizations are also becoming more sophisticated at managing cloud costs and deriving value from their investments, with 82% of organizations saying that their FinOps capabilities are either of medium maturity or high maturity.
“Cloud transformation projects are one of the key enablers of scalability, innovation, cost-effectiveness, and flexibility – all key factors in thriving in even the toughest of environments,” DeVerter commented. “For organizations seeking to navigate economic uncertainty, having well-developed FinOps will be the key to making these projects pay off.”
Even in Tougher Times, Talent Remains Scarce
Even amidst economic uncertainty, IT organizations are still facing a tough talent environment. 54% said they are struggling to fill vacancies, especially in the areas of cybersecurity (61%), machine learning (54%), data analytics (48%), network engineering (40%), data engineering (36%), and cloud architecture (33%).
56% of organizations are also struggling to retain IT staff with specific in-demand skills. In response, they are offering additional training opportunities (63%), increasing the value of rewards (57%), instituting salary increases (52%), and making work/life balance improvements (45%), among other tactics.
Over half of respondents (52%) said their organization is downsizing employees, led by reductions in HR (56%), sales and marketing (47%), and business operations (42%). Finally, given talent scarcity, 78% of organizations are also looking for ways to enable technology to perform work traditionally performed by humans, especially in the areas of customer service (66%) and IT operations (64%).
“Though economic conditions have shifted, it’s clear that organizations are still fighting against a very challenging market for talent, especially in key priority areas,” added DeVerter. “Finding new ways to leverage technology to address some of these shortfalls can help companies navigate the next 12-18 months, as will strategic use of outside resources.”