Dive Brief:

• Despite the economic contraction, 70% of businesses plan to sustain or increase their 2020 investments in digital transformation, according to a survey of 3,000 global executives published by software company IFS. The survey was conducted between April and May.
• The construction sector is most likely to sustain digital transformation, with 75% of executives planning to invest this year. In contrast, 58% of IT and 55% of manufacturing companies intend to maintain or increase their projected investments.
• In the energy and utilities sector, 37% will sustain digital transformation budgets. A similar contraction took place in retail, where just 35% of companies plan to continue their tech initiatives.

Dive Insight:

The tension between budget constraints and capital-intensive tech projects is far from new. The realities of the pandemic, and the recession it brought along, merely intensified it.

As the impact of COVID-19 unfolds, the C-suite has begun investing in technology to make up for lost revenue, lower expenses or increase efficiency. One in five CFOs polled by PwC say tech investments will help them reduce costs.

But changing consumer behaviors are leading CIOs to rethink the plans initially laid out for 2020. Alignment with business goals dictates where to cut spending and where to double down.

The difference between industry sectors will determine how companies change course. For tech companies enabling digital processes, it's boom times. For travel and entertainment industries, survival is the short-term focus.

Growth is the key factor pushing forward tech investments in the next 12 months, according to one-third of finance leaders surveyed by PwC. But the swift, unforeseen pivot to working remotely also played a role in rising tech spend.

For 72% of businesses, the change to distributed work caught businesses off-guard, according to a Xerox survey. In response, 55% of leaders say they're prioritizing tech spending on remote technology resources. Another 40% say their budget will focus on a mix of remote and in-office resources.