The fast and vast federal response to coronavirus has exposed weaknesses in some agencies’ information technology. In fact, some members of Congress are calling for new investments to modernize. What about the private sector, to which the government often looks for models. Has coronavirus sparked investment there? For some answers, Federal Drive with Tom Temin turned to the vice president and principal analyst at Forrester Research, Andrew Bartels.
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Tom Temin: Mr. Bartels is good to have you one.
Andrew Bartels: Thank you very much.
Tom Temin: Let’s begin with the commercial side. I understand there has been some uptick in it investment during the pandemic, what have you seen and where has it been happening?
Andrew Bartels: Well, the private sector actually is moving in both directions both upward and downward in their tech spending. One of the areas we’ve seen an uptick in business investment in technology has been in support of these remote workers work from home arrangements that come to them suddenly, we need to spend more to support those initiatives if we’re going to help employees working productively. from home. At the same time, though, many private sector companies are looking at the potential of revenue drops of 10, 20, 30, in some cases 70, 80, 90% drop in revenues, those companies are looking much more skeptically at their tech budgets. Yes, there are some areas that they want to increase such as work from home arrangements, employee experience or customer experience to support customers. But other parts of their tech budgets are going to be cut in some cases quite significantly, because of those revenue declines. Now, the federal government is in a slightly different position. Federal government, along with a handful of other industries looks to be in a situation where its overall spending is likely to rise. And certainly, as you mentioned in your intro, there have been a number of agencies that have been the front lines of this project, especially small business administration. They’re found that their system simply are not up to the volume of requests that they are having to deal with. So we expect that we’ll see more investment in certain federal agencies that are directly tied into the pandemic, CDC for example, SBA, you know, others but other agencies, you know, EPA, for example, could get squeezed. So I think it’s gonna be a mixed picture for federal government spending. Some agencies are in the frontlines of dealing with both a pandemic or dealing with economic stabilization efforts. We’ll see more funding, specifically to address some of the shortcomings we’ve seen, but other agencies may well find that their budgets are fixed or even declined, as Congress and administration adjust to this whole new level of selectivity.
Tom Temin: It sounds like though on the industrial side or the commercial side, they too are kind of caught short when it comes to the ability to support large numbers of teleworkers. I mean, this was something that government found but it sounds like industry wasn’t all that far ahead on that count either, was it?
Andrew Bartels: No, that’s correct. In general companies have not invested heavily in employees working from home. And many have had to scramble to put in places to VPNs. Put in places, the remote working systems, etc. However, there have been some positive trends. You know, adoption of SAS technologies in the private sector has been fairly advanced. And this allows employees to access those systems remotely. There’s been an upsurge in the private sector adoption of systems like Microsoft Teams that allow employees to collaborate remotely unworking, the same document or same reports or same objects. And of course, video conferencing has been well established in the private sector often use primarily for engagement with customers or with prospects, but now being used extensively to engage with employees and allows employees to collaborate together. So there are some parts of the private sector that actually were in well positioned, but mobilizing those aspects, those collaboration technologies, those video content technology, and redeploying them, refocusing them on employee work experience has been a challenge for the private sector as it has been for the federal government.
Tom Temin: And talking about the investments that even the squeezed industries might be making in customer experience types of systems, doesn’t that really, though, get at basic it investment and might take a lot of money because you have to redo your applications. And you also have to redo your infrastructure to some point, maybe virtualize older applications and put them in the cloud, for example. So it’s a non trivial thing, is it not, to get to a better customer experience through it investment?
Andrew Bartels: To a certain degree, you’re correct, but remember their stages of customer experience, you know, there’s a stage in involve finding customers, alerting them to your value proposition during marketing during sales, then there’s the actual sales engagement, of actually closing a deal. And then there’s the ongoing support and customer service. A lot of companies have done a lot of work on the first piece of it. And that’s fairly advanced. It’s been the activities around supporting new channels for fulfillment, for example, or new channels of customer service where there’s been work that’s needed to be done. But the initial parts, reaching customers, identifying customers, finding customers, that’s been pretty widely adopted.
Tom Temin: So in the case of an agency, like the Small Business Administration, they’ve got some basic investment to do to really have just the raw capacity for the numbers. I think they’re doing loans at a rate that they would normally do over a period of 25 years. So the question is, how much is too much? How much do you invest for peaks, so that you don’t spend yourself to death when the peaks go away?
Andrew Bartels: That’s a challenge that I think the SPS certainly feeling to a very high degree. This is where the use of public cloud infrastructure resources like AWS, or Microsoft, Azure, or Google is coming into play. The government, federal government has been steadily encouraging and agencies to take advantage of these cloud resources. Some agencies have moved ahead much more rapidly. Others have not. But certainly I think you’ll expect to see federal agencies who’ve had this on their list of available resources will tap into this much more aggressive especially when they are situations like SBA, they suddenly find that their application volume to your point increases by a hundredfold from what it normally would be. So yes, those cloud resources are available to federal agencies, but the take up of them has been also hit or miss but it’s been uneven. But I expect to see that be much more broadly adapted this especially to deal with Skill up issues that certain agents are facing right now.
Tom Temin: And what about cybersecurity investments? How have those changed, if they have during the pandemic? Because the whole remote working situation creates new vulnerabilities of its own, as does some of the movement to the clouds and so forth.
Andrew Bartels: You’re correct. As we’re looking at the portfolio of new project spending, there are four areas that we see both in the private sector and by corollary in the federal sector are still at the top of the list of projects that will be supported will be continued, even other things are cut. And they’ll certainly include security and cybersecurity, which also includes employee experience would also mention customer experience, but ultimately include increasingly risk management systems. I think a lot of companies are now realizing that these types of disruptions like the pandemic are not one offs. They’re part of what process we expect to see more often and that we need to be prepared for it in terms of being identify, respond to, and deal with new unforeseen risks as they emerge. So risk management would be the fourth one, along with cybersecurity, that would be on that priority list of what public sector and private sector will be investing in.
Tom Temin: Sounds like good or bad, the CIO is always at the center of these types of issues, isn’t he or she?
Andrew Bartels: Certainly the CIO was part of is very much at the center of this. But as technology has become more and more infused into both business processes and government processes, the CIO doesn’t operate in isolation. The CIO has to work in close partnership with the business counterparts, who in many cases are trying to come as knowledgeable at least about how technology can support their business activities as a CIO can. So the partnership between CIOs and there business partners is even more critical than ever has been. CIOs play a critical role in highlighting and making sure security risks are addressed making sure that systems work together it makes sure that systems scale but their business partners are equally involved in terms of identifying needs, and where technology can add value to business operations and the partnership which I think is so critical.
Tom Temin: Andrew Bartels is the Vice President and principal analyst at Forrester Research. Thanks so much for joining me.
Andrew Bartels: You’re welcome and thanks for the opportunity.