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A CIO’s Guide to Manage IT Budget during COVID-19


When we shut down a computer, it rests. But what happens when we pause the lives of human beings? We do not rest. We think, reflect, imagine and take steps to adapt to the new circumstances, a new world. Almost overnight, COVID-19 changed people’s lives, businesses and economies – bringing the world to a standstill. While it’s apparent that several uncertainties will persist, we need to plan for a future that is being thrust upon us, especially with the financial setback wrapped in a cloak of ambiguity.

The crisis brought with it several challenges: numerous companies have had to close their doors temporarily. Supply chains have got disrupted. Manufacturing slowed down. Demand is plunging. Consumers are no longer making many discretionary purchases and so on. This all signifies that cash is not just king—it’s critical for survival. 

Just as the CFOs are under pressure to put their companies on a sound financial footing, CIOs too have the responsibility to cut-down IT budgets, leverage technology to save costs and improve efficiency. How is that possible? Definitely by understanding that business continuity is not only meant for technology and operations but also for effective financial management. The journey starts to the New Normal by prioritizing IT spends, addressing the current service portfolio, migrating to secure clouds, leveraging emerging technologies, and embedding security and compliance across operations.

Prioritizing IT spends

With businesses running on a tight leash, the impact does fall on IT to bring down the costs – quickly yet smartly. CIOs will have to act on a full arsenal of measures that help prioritize IT spends. 

  • It is important to establish a baseline of IT costs, including having a holistic view on managing lights-on budget that is absolutely necessary to maintain the company’s critical IT and business operations.
  • Another step would entail creating a contingency budget in parallel for dealing with any expense, important from business continuity perspective.
  • CIOs will also have to consider an innovation budget that helps them plan implementation of digital transformation initiatives for quicker turnaround and business continuity while dealing with the New Normal.
  • Optimizing shadow IT budget is another critical step to ensure there is no duplication of efforts and consolidation of budget spends that can be prioritized as per the need of the hour in a way that businesses remain competitive. 

Once the areas of opportunities are identified, these can be bucketed in must-to-have, good-to-have and nice-to-have; so timely decision can be taken on which initiatives are to be prioritized and how.

While budgeting and planning is being done, CIOs will also have to work closely with the businesses and negotiate with them on certain parameters.

These include optimizing the consumption of software licences available to the users, providing IT helpdesk support for a reduced timeframe, and reviewing the Service Level Agreements to find out which SLAs are flexible and can be re-considered to bring down costs while not hampering business operations. Another step would be to coordinate with the supplier’s network and renegotiate with them for SLAs as well as cost can also come in handy as a step to save money.

While doing all this, gig resourcing model can be looked at to expand on temporary gains and meet the demands of the current business landscape.

Adopting cloud for the evolving customer experience

Cloud adoption is another significant step that can help enterprises make IT infrastructure flexible, bring in agility and responsiveness, and reduce capital expenditure and op-ex cost.

For instance, changing the firm’s policy to enable remote connectivity with Bring Your Own Device and Virtual Desktop Infrastructure to reduce cost spent on machines and end-point protection. 

Cloud-based collaboration tools will further enable enterprises to move towards location-independent model of working. 

Cloud will also help improve speed-to-market and develop innovative solutions in the New Normal. 

Innovating during the time of crises

Ironic as it may seem, cutting down IT budget yet investing in emerging technologies is one of the best ways to drive seamless operations and save money. The first step is to consider challenges that customers are facing and drive innovation that helps them cut costs while leading through the crises.

Creating a digital ecosystem with capabilities such as analytics, AI and RPA can help improve productivity and drive efficiency with lesser manpower – thereby saving costs. For instance, automating IT service operations that are manual and repetitive can save time and cost on resources. CIOs can coordinate with the business and re-look at the processes that are tedious and can be performed by RPA bots to reduce man-hours and any human errors.

Leveraging open-source technologies is also a great way to decrease the total cost of ownership for infrastructure, deliver greater flexibility and innovate more quickly.

Security and compliance to the core

The post-COVID-19 era will continue to see new channels, increasing interconnectivity, digital platforms and 24/7 access. Not to forget, every enhancement in the digital domain can drive increased security risks, threats as well as fraud. As we focus on lowering costs, investing in security and compliance would be the key priority for businesses to help maintain data protection. 

For security of systems and business-critical data, enterprises must focus on building information security controls in every layer of technology viz., data, devices and applications. It is also significant to invest in cloud security and compliance to ensure security from any malicious activities.

Enterprises must also focus on end-user awareness and training campaigns that can help individuals steer clear of falling victims to any cyberattacks.

What next?

If we go by what Einstein once said that in the middle of difficulty lies the opportunity, this is the time that calls to focus on mitigating any damage caused by COVID-19 to the business and better manage finances for the long run. While it would vary for each company, overcoming the crises and coming out stronger will be what differentiates the victors from the vanquished.

(The author is Chief Information Officer at KPMG in India and the views expressed in this article are his own)

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