IT equipment finance, as an asset class, has been one of the survivors in the asset finance sector from the Covid-19 hit to the economy here in the UK and abroad. 

According to recent data from the Finance & Leasing Association (FLA), total asset finance new business in the UK fell by 47% in April 2020 compared with the same month in 2019.

A closer look suggests IT equipment finance, which fell by 18% year-on-year in April, has not done as badly as other asset classes during the Covid-19 outbreak. Meanwhile, performing much worse were: commercial vehicle finance (-65%), plant and machinery finance (-30%), business equipment (-43%), car finance (-57%) and Aircraft, ships and rolling stock finance (-19%). 

Looking at the broader business outlook, Rena Bhattacharyya argues below that Covid-19 is likely to mark a significant change in how businesses view IT infrastructure and spending.

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Covid-19, as well as being a human tragedy, is one of the biggest threats to the global economy in living memory. Depressed and volatile stock markets have been accompanied by record rises in unemployment and significant redundancy announcements from some of the world’s largest corporations. 

However, behind the headlines, there is a degree of confidence among many businesses that they will bounce back from the crisis. 

Most businesses do not see redundancies as a primary response to Covid-19 and recent economic data suggests that businesses will step up their hiring activities in 2021. 

GlobalData’s research shows that the majority of senior decision-makers within businesses feel that their own company and their sector of the economy as a whole are well-positioned to withstand the impact of Covid-19. 

Furthermore, most enterprises believe they need to invest to respond to Covid-19, and IT/technology is a key focus for that investment. 

No going back

Business leaders who have spoken to GlobalData almost unanimously agree that there will be no return to the way things were before Covid-19. 

Increased levels of home working and flexible working practices were already trends before Covid-19 and those trends have been magnified and solidified by the crisis. 

Businesses also expect travel to be less frequent and for a greater percentage of internal and customer-facing meetings to be conducted remotely rather than in person. 

Collaboration technologies (such as Zoom, Microsoft Teams) are seen as long-term mission-critical to remote working trends in all businesses. These technologies will also perform vertical-specific roles, such as supporting telemedicine or enabling retail banks to do more business via video meetings. 

These changes, in part, indicate why very few businesses are reducing their IT spending and around 50% of businesses have said they have increased their IT budgets in response to Covid-19, according to new research by GlobalData. 

But the process goes deeper as enterprises are reconsidering their whole approach to technology. 

Automation

Covid-19 has tested many businesses’ contact centres to breaking point. The closure of (most) brick and mortar branches has left contact centres as the only means of contacting most businesses, whilst the pressures of lockdown have increased call volumes.

In response, businesses have turned to technology providers to see how they can improve their customer service solutions – and in many cases, the answer has been through automation. This includes both the use of Interactive Voice Response platforms and also through increased use of chatbots. 

These technologies are not new, but many businesses who had, for reasons of either doubt or inertia, not yet invested in them are now finding that they can deliver flexibility and high levels of customer satisfaction.

Robots

The trend for automation goes beyond customer contact. Manufacturing has been one of the most heavily affected industries as lockdown has meant that factories have had to close down. 

Automation in a factory is more difficult than in a contact centre, but technologies such as 5G, edge computing, and the Internet of Things (IoT) mean that greater levels of automation are achievable in sites such as factories, warehouses, and mines.

Remote control

Covid-19 has also underlined for businesses the importance of being able to manage people and systems from anywhere – whether that is giving contact centre managers/supervisors the ability to monitor calls from a separate location or allowing the IT manager to monitor network performance whilst not in the office. 

Digital transformation

These are only a few examples of technologies that businesses are turning to. GlobalData’s research makes it clear that the rate of change will increase as necessity forces even more conservative industries to embrace technological change. 

Covid-19 will change the way businesses and people interact, either as employees or customers, forever. 

Rena Bhattacharyya is research director at GlobalData