Channel should brace for tightened end user spending, analyst says

Forrester says partners should buckle up for a year where frustrations will build among end users, and says automation will be a key trend to help

End user customers will have to learn to do "more with less" next year as COVID-19 weighs heavy on their IT budgets.

Forrester VP and principal analyst Thomas Husson claims that end users will want to invest in technology next year to help them endure the COVID-19 crisis, but lack the budgets to do so.

As a result, customers will be more demanding than ever of their IT suppliers, Husson claims.

"Companies will have to do more with less meaning they will have to make some cuts and reprioritise some of their investments. And clearly we see what is happening is that they are more demanding than ever," Husson said.

"Into next year they are likely to feel more frustrated, because they will have to deal with lower purchasing power, and some of them will unfortunately face unemployment.

"We do expect more companies to go bankrupt and so it will create a lot of tension."

Husson's advice is for companies to spend on technologies that enable them to better understand their customers.

And a key trend for 2021 will be a move towards automating more "mundane" administrative processes within businesses so they can scale faster.

Europe is lagging behind Asia Pacific and the US in investing in tools such as digital decision platforms, robotic process automation and digital process automation.

Principal analyst Husson says the crux of customer frustrations is that business cultures have not changed as rapidly as procurement habits over the last year.

"Satya Nadella, the CEO of Microsoft, has said that we've witnessed two years of digital transformation in just two months.

"And we have many conversations of that kind with our clients. But the challenge is that business cultures are not evolving that quickly to meet this challenge.

"Especially in a context where many companies are having their employees work remotely more. It's a big change in terms of how you manage people. It's a change in leadership, and it's also a massive change in processes, so it requires a lot of collaboration between the different C-level executives within an organisation."

He added that European governments are writing policy to try and stem a rise in unemployment due to COVID-19, which will likely look to discourage businesses from adopting automation solutions..

"The EU recovery programmes are focused on avoiding rising unemployment during the pandemic. And therefore, these recovery funds are bound to try and keep workforces untouched, instead of shifting it to automation."

More broadly, Forrester says that 2021 will not see a plethora of net new purchasing behaviours but rather an exacerbation of existing trends.

"We expect that in 2021, 30 per cent of companies will invest more in cloud automation, security and mobility," Husson said.

"And this will increase the gap between those who do, and those who don't, have some sort of a technology debt, where they're not necessarily making the most of current technologies."

Forrester also warned against "artificial idiocy," or placing too much trust in machines without applying critical thinking.

"We strongly recommend avoiding this, meaning doing what machines tell you to do without broader thinking," Husson said.

"We all know this is a big mistake. But this also requires from a societal point of view, what we are calling automation literacy, which has to become part of the educational curriculum.

"Adults as well have to be made aware about the limitations and also the risks of automation. So, this will also an important aspect for 2021."