With workers gradually returning to the offices, organizations are relying on technology to operate smoothly under the new framework, from virtual whiteboarding solutions to augmented collaboration tools and hybrid-ready meeting rooms. 

But new ways of working can impact the technology budget, with executives pressured to hit the right balance between supporting a top-grade employee experience and bringing IT spend under control. Keeping CFOs and workers happy at the same time can be challenging.

During 2020, as businesses relied on technology to uphold their operations, 75% of IT budgets rose according to one survey. The sudden shift to remote work caught 72% of businesses technologically unprepared, and 40% of organizations said their IT budgets would prioritize supporting a mix of remote and in-office resources as a response, another study found.

Organizations likely to overspend as they outfit companies with hybrid work tools are the ones who will "rip and replace," technologies, according to John-David Lovelock, distinguished research VP at Gartner. In other words, those that were already on the wrong path toward tech outfitting prior to the pandemic.

"Companies that recognize that there's an evolutionary path to everything that they put in are going to be able to get to that full, human-centric remote work productivity-based utopia," said Lovelock. "A little bit slower but much more cost-effectively."

Switching to hybrid work will represent a monetary upside for employers, to the tune of $11,000 per employee working from home half the time, by one estimate by Global Workplace Analytics. But employee experience expectations are rising, and technologies such as virtual whiteboard capabilities or enhanced meeting rooms add to an already-complex IT ecosystem.

Curbing overspend in hybrid work starts by right-sizing software tools, matching up that technology's scope to what is needed for the organization, according to Peter Tsai, head of technology insights at Spiceworks Ziff Davis.

"You can always buy more," said Tsai. "You can buy a solution that does way more than you really need, but are you ever going to actually use that? You need to pick the right solution for your organization, taking into consideration not only costs but ease of use."
 

Hybrid work — without breaking the bank

Software tools that deliver value under hybrid work drives global IT spend in 2021. Overall IT spend will expand by 9% this year, according to Gartner estimates.

In April 2020, IT priorities were less focused on budgeting, and more on outfitting a remote work environment in the very short term, said Lovelock. "Since then it's been about what tools we use in order to improve our overall work environment," Lovelock said. 

With certain exceptions, there's no avoiding the reality of hybrid work, with 70% of employers expecting to adopt a hybrid work model. Enabling this work environment is a task organizations expect CIOs to help solve while avoiding wasting resources.

Cloud is a frequent tech stack element to review when overspend is a concern, especially because cloud-based tools and applications enable so much of hybrid work. The benefit of cloud-based tools is that it's easy to scale licenses up or down, Tsai said.

"You shouldn't give access to every single tool to every single person in your company," said Tsai. "You should really monitor usage of those tools so you don't need to buy like 100 licenses for every single thing." 

Experts recommend putting in place cloud governance models that allow for usage control, as well as spinning up cost management solutions and financial modeling strategies. 

Centralizing devices around the desktop-as-a-service model can help reduce spend on devices and security software, Lovelock said. 

But too close an eye on cost control has its risks, and CIOs must balance keeping a close eye on cost with streamlining business outcomes. CIOs can take the opportunity to reframe the strategy. 

"I think this discussion surrounding overspending is slightly misguided," said Dana Daher, senior research analyst at Info-Tech Research Group. "Because we're focusing so much on streamlining what IT can do, but it's more of a discussion about how the business has to change, and how IT can support it."

Any cost savings that hybrid work can ultimately deliver shouldn't go back into business revenue, and should instead be reinvesting directly into IT, according to Daher. "The business has to drive how IT operates, what you're investing in, what the business truly needs to move forward, and then begin to consolidate around that."