More than half (61%) of EU businesses expect IT budgets to rise in 2021 to manage the Covid-19 pandemic and enable employees to work from home, according to new research by 3stepIT.

The average increase in European IT budgets will be just over 21% from 2019 levels. The largest increases are anticipated in Norway (37%) and Germany (27%), with the lowest increases in the UK (16%) and France (15%).

54% of businesses cited Covid-19 as the top factor driving spending changes in the next 12 months as IT strategies focus on facilitating social distancing (47%) and increased home working (46%) in 2021.

IT budgets 2021

According to the ‘State of Business IT 2020’ report commissioned by sustainable technology lifecycle management Finland-based provider 3stepIT, 25% of businesses surveyed believe budgets could increase by as much as 30% within the next 12 months.

Given that the average IT budget is approximately £2.7m across EU businesses, this could mean additional investment of over £800,000 in new technology.

Carmen Ene, chief executive at 3stepIT said: “Priorities for businesses across Europe have shifted dramatically this year and our research shows that, for the most part, companies have successfully responded to the challenges of remote working forced upon them by Covid.

“It’s now clear the mobile workforce is here to stay, and while IT budgets for many firms will increase to cover the costs of this digital transformation, IT managers are being asked to demonstrate the value of every expense.

“Alongside more flexible working solutions, businesses are now looking to introduce different purchasing models that demonstrate a lower total cost of ownership, accelerate digital and workplace transformation, and offer greater flexibility in IT procurement. The increasing popularity of subscription-based models, technology lifecycle management and transition to the cloud is testament to this trend.”

Survey background

The research was carried out using an online questionnaire and conducted through specialist B2B sample panels conducted by independent research house Omnisis that identify the individual with overall responsibility for IT budgets in organisations employing more than 50 people.

In total 1,010 Interviews were completed using indigenous languages with key IT decision-makers, of which 28% were C-level executives. Interviews were completed during July and August 2020 across the UK, France, Germany, Switzerland, Austria, Norway, Sweden, Finland and Denmark.

At an overall level results are accurate to +/- 3% at 95% confidence levels assuming a result of 50%. At a country-specific level, results will enjoy lower levels of statistical reliability but precise error margins can be provided as necessary.