The effects of the pandemic wield lingering influence on 2021 budgets.
To better understand what companies are spending money on, ZoomInfo surveyed over 400 CEOs, IT professionals, and marketers to understand patterns of near-term investment and cost cutting. Privacy, regulatory compliance, and employee safeguards are among the leading reasons that companies will put big money towards strengthening IT security in 2021. In fact, one in six companies plans on investing in security initiatives.
Meanwhile,marketing departments find themselves challenged by how to effectively track ROI and generate more leads. Over 60% of marketers surveyed mentioned increasing their budget over the next 6-months to solve issues related to lead generation and analytics.
Let’s look in further detail at these budget initiatives and how companies will invest in them.
IT Security Spending Trends
The security landscape is fraught with risks for companies. Not only is it important for organizations to avoid malware and other intrusions, but customer expectations are high that their data will remain safe with vendors.
Prior research from ZoomInfo showed data privacy projects rose 2,200% from 2016 to 2019, so it’s no surprise to see these efforts continue to prompt significant IT budget investment.
A survey of IT professionals conducted by ZoomInfo at the end of 2020 indicates that of companies planning security-related projects, nearly 10% will spend up to $500,000 on those efforts, and another 14% will spend more than that amount.
Taken together, that’s nearly one in four companies planning the highest levels of spending on security.
Authentication and endpoint protection are the two areas most often cited for current, upcoming, or recently completed security projects, according to survey results. Both act as core, early-stage methods to defend network systems from hackers and malicious software.
Application and Network Spending Trends
Other areas of planned IT budget spending include application and development and networks. In fact, more companies will invest in these areas compared to security initiatives, but spend far less per project than security.
Of those companies planning app-and-dev projects, the majority will spend $50,000 or less. Leading areas of focus will be collaboration tools — an expected result given how many people worked from home during the past year — and configuration management. The latter technology helps administrators maintain the settings of apps and systems.
As for networks, top initiatives include virtualization, network infrastructure, and servers. Among companies planning these projects, 53% will devote $50,000 or less to them, while another quarter will spend up to $100,000.
Marketing Spending Trends
Switching the discussion to marketing investments, the survey asked marketers what challenges they faced and whether they would resolve these issues.
Two challenges led the list as areas that respondents planned to resolve: generating more leads and tracking ROI of marketing activities.
Irony flows through those results because lead gen and ROI are among the oldest struggles facing marketers, yet they still persist. Perhaps illustrating their exasperation, ROI also got the highest number of respondents who indicated it was a challenge but they were not planning to not resolve it.
Given the full slate of challenges noted in Figure 4, almost two-thirds of respondents said their companies will increase marketing budget investments within three to six months to tackle these demands.
Areas of Decreased Spending
ZoomInfo also asked respondents about what areas their companies would decrease spending in over the next three to six months.
Since early 2020, reductions in spending have taken on new emphasis as organizations struggled with the public health measures and economic fallout caused by the coronavirus pandemic.
No single budget area garnered a majority of responses, indicating that companies do not share a standardized approach to cost cutting. Staffing, IT, operating expenses (those that directly tie to product development) and overhead costs (those that don’t directly tie to product development) all showed significant risk of cutbacks.
Specific items on the hot seat that were mentioned numerous times included advertising, event sponsorship, office rent, power, printing, and travel.
Perhaps the brightest sign was that nearly one-quarter of companies will not reduce spending. Those that chose this answer often indicated their firms enjoyed good financial performance during the pandemic.
On the bleaker side, 7% of respondents said everything under the budget could be up for reduction.
Companies Show Near-Term Spending Patterns
When it comes to spending, COVID-19 wields lingering influence on future budgets.
However, respondents to ZoomInfo’s survey show patterns of near-term investment, particularly in the area of IT security.
While it’s not business as usual quite yet, it’s clear that certain areas — data protection, for example — still attract significant dollars.