26% of transformation budgets grew 'dramatically' as pandemic speeds up digital

Dive Brief:

At 79% of companies, digital transformation budgets grew in response to global consumer patterns shifting, according to a survey of 2,569 global enterprise leaders published by Twilio. For 26% of respondents, budgets grew "dramatically."
The pandemic sped up digital transformation strategies at 97% of companies, with a special focus on digital communications. One-third of companies began deploying live chat or interactive voice response (IVR) platforms for the first time in responding to the pandemic.
Getting executive approval or buy-in stopped being a barrier for digital transformation processes at 37% of companies, creating space for more line-of-business experimentation. Reluctance to replace legacy software went away at 35% of businesses.

Dive Insight:

When COVID-19 hit, businesses needed to reassess their operations in real time. The pivot to remote work made digital transformation objectives move up the priority pipeline: from aspirational to necessary.

Roberto Torres / CIO Dive, with data from Twilio.

The process of choosing the initiatives that receive funding has changed "because the overall business strategy has shifted" in the pandemic, Monika Sinha, research vice president at Gartner, said in an interview with CIO Dive.

Regardless of how the pandemic impacted their industry, executives expect tech investments will help solve the business problem they're facing, Sinha said.

The last few months compressed "years-long digital transformation roadmaps" into days and weeks in order to adapt to the COVID-19 way of doing business, said Glenn Weinstein, chief customer officer at Twilio, in a statement accompanying the survey. Customers "in nearly every industry" needed new channels to communicate with stakeholders.

Tech goals changed depending on industry context. Travel industry CIOs are more likely to press the pause button on capital intensive initiatives than their peers at software companies that enable remote work.

The changes impacted global IT spend forecasts, slated to reach $3.5 trillion in 2020, according to Gartner projections. The number represents a 7.3% drop from 2019, in stark contrast from its January projections of a 3.4% YOY boost.

Though response was swift at most businesses, CEOs continued to oversee digital transformation budgets at the majority of companies, according to data from Tata Consultancy Services. At just 18% of businesses the CIO makes budget determinations on digital transformation spending.