Tag Archives: budgets

News

Node4’s New Independent Research Finds Over Half Of Mid-Market IT Budgets Have Already Been Impacted by Higher Fuel Prices, Rising Energy Costs and Inflation

New independent research from Node4, the cloud-led digital transformation Managed Services Provider (MSP), reveals that over half the UK’s mid-market businesses are starting 2023 with pressure on already stretched IT budgets due to rising energy costs, fuel price increases and across-the-board inflation. That’s just one of the key findings from the company’s Mid-Market IT Priorities Report 2022/2023, which was officially launched earlier today.

This year’s edition of the report — which features multi-year benchmarked data analysis on IT budgets and investment drivers — also uncovers that around nine out of ten IT decision-makers expect the increased costs of doing business to have an even greater impact on their budgets over the next 12 months. This is particularly concerning as the research found that around a third of UK businesses think their current IT budgets are insufficient. Furthermore, close to one in ten don’t expect to see a funding increase during 2023.

The report’s findings also suggest that, despite the many benefits of public and private cloud adoption, inflationary pressures have led to a re-examination of these models and a desire to access more predictable, stable costs — as well as a wider choice of pricing models. This could explain why, year-on-year, 11% more IT decision-makers have adopted a hybrid cloud model — underpinning its credentials as a viable long-term and potentially more flexible option that combines the best aspects of public and private cloud.

Looking at the four market sectors covered in the report — healthcare, transport & logistics, insurance, and online retail — healthcare has seen the biggest comparative uptake in hybrid cloud over the last 12 months, with 19% more companies having adopted the strategy. In addition, online retail companies are most likely to reduce their public cloud investment during 2023.

Commenting on the findings, Paul Bryce, Managing Director at Node4, says: “Investment in public, private and hybrid cloud — as well as managed and colocation services — was central to facilitating the pivot to remote working during the pandemic. And those companies that were further along their cloud transformation journey when COVID hit, coped better. The same is true this year; those with more mature cloud transformation strategies, such as those that have led the way with hybrid cloud consumption models, may be better placed to cope with the uncertainties surrounding the rising costs of fuel, energy, goods and services.”

The research also suggests that over the last 12 months, mid-market companies have reprioritised a range of other IT investment plans to deal with challenges posed by the rising cost of doing business and adjusting to long-term hybrid working. For example, last year, respondents said delivering access to additional tools and services was their top driver for IT infrastructure investment, but this year, productivity and security are in joint first place.

While IT security concerns also dominated last year’s report, it’s clear that mid-market companies are acutely aware that a hybrid workforce will present an even bigger security challenge this year. As such, any vulnerabilities resulting from the speed at which remote working was introduced during the pandemic must now be addressed as a key priority.

“Since publishing our Mid-Market IT Priorities 2021/2022 Report last year, the impact of COVID continues to diminish for most businesses,” explains Paul Bryce. “Where last year, it was a case of getting remote working up and running quickly — and, in some instances, at almost any cost — the current economic climate has brought value for money, productivity and a push for rapid growth into sharp focus — all without compromising IT security or compliance directives.”

He concludes: “A lot of mid-market businesses will be trying to drive productivity improvements through the additional tools and services they delivered to enable homeworking during the pandemic. This will go some way to ensure that hybrid working doesn’t hamper long-term growth targets or shorter-term productivity — which, given the financial pressures faced by businesses right now, has never been more important.”

To download a full copy of the report, please visit https://node4.co.uk/resource/mid-market-it-priorities-report-2022-23/.

Marketing, PR and SEO, News

3 key tips for any marketing budget during the COVID-19 pandemic

The pandemic is taking its toll on business and now recession looms. Brand marketing is essential for businesses to flourish post-COVID, state experts Dr Omar Merlo and Dr Andreas Eisingerich, Co-Academic Directors of the MSc Strategic Marketing (online, part-time) programme at Imperial College Business School.

“Many businesses have had to assess how to survive while consumers are spending less. A question that’s often asked during an economic slump is where to make cuts. Misguidedly, marketing is often first on the chopping block,” says Merlo.

Merlo and Eisingerich outline three ways business leaders can optimise spending during the pandemic:

1. Avoid cutting the marketing budget

In March, a study by Marketing Week and Econsultancy of 900 UK brand managers showed more than half were delaying or reviewing their marketing campaigns.

But cuts for short-term benefit can have dangerous outcomes. Maintaining marketing spending at pre-COVID-19 levels may be the only way to survive, and even gain market share from cautious competitors. A business that spends wisely can succeed as communication clutter decreases, advertising cost drops, and share of voice increases. And it can stay ahead; research shows advertising aggressively in tough economic times increases sales as well as profits.

During the 2008 financial crisis, Audi’s decision to increase its marketing spend while other car makers were more cautious elevated the car maker from a niche brand to a global leader.

2. Use a “sniper” instead of a “shotgun” approach to cost cutting

If spending adjustments are unavoidable, indiscriminate cuts across the board should be avoided, as they can destroy value in the long term.

Coronavirus has affected demand for most products and services, reducing it for most, and creating two polarised opposites in others; first, industries that have experienced a huge drop in demand, like travel and leisure, and second, those that have seen an enormous spike, such as online groceries.

In either case, budget cuts can be attractive, whether due to lack of resources or for fear of creating demand above capacity – but companies should ultimately focus on protecting long-term spending.

3. Budget for innovation

After the 2008 recession, Amazon grew by 28%. This was partly down to innovative new products, such as the Kindle and e-books, which cemented Amazon in the minds of customers as an innovator that introduced a lower-cost alternative to traditional books at a time when they most needed one.

This is probably not the time for radical innovation and risky endeavours, but for relatively simple customer-centric differentiation. Brands should try to understand what customers need most and what problems they can solve for them with a view to winning customer loyalty in the long term.

These insights come from the lessons of Merlo and Eisingerich on the MSc Strategic Marketing (online, part-time) programme at Imperial College Business School, designed for ambitious graduates and motivated early-career professionals to level-up and solve the marketing challenges of tomorrow.