'Delay or cancel' large IT funding approvals in wake of Brexit and falls in value of sterling, advises KPMG

But leaving EU "need not drive innovation into the ground" says consultancy

Professional services firm KPMG has advised CIOs to "delay or cancel large funding approvals" in the wake of Brexit, taking care to negotiate "the pound's fall" and recalculate planned projects.

The advice comes the day after the Bank of England cut interest rates from 0.5 per cent to 0.25 per cent in a bid to stimulate the economy amid signs of a downturn following the recent vote to leave the EU.

Adam Woodhouse, director of KPMG's CIO advisory panel, advised that IT leaders may look at options to "delay or cancel large funding approvals and the pound's fall may require them to recalculate planned projects, especially where they are buying software, services, hardware or using foreign-based teams".

Woodhouse suggested that the "short, medium and long-term risks" from Brexit need addressing.

"Staff from the EU may feel uneasy about their future. Firms which heavily depend on foreign expertise may be worried about losing those staff or attracting talent from EU countries," he said.

However, Woodhouse was also keen to illustrate that Brexit does not have to be all about woe.

"For many it will pose a significant operational challenge. But, for those who can lift their heads from contingency planning and take a more strategic view, it can also present opportunities," he suggested.

Specifically, Woodhouse believes that Brexit could "offer the investment or acquisition of niche and startup technology innovators" as their "traditional sources of funding may become more cautious".

"Many funds are sitting on the fence until things settle down, allowing bold CIOs to get the jump on the competition and pick up the best of the bunch," he said.

Skills-wise, Woodhouse also believes that "the UK could be on the verge of becoming a destination for corporates to near-shore technology skills and digital work" due to a UK population that "has many highly-skilled digital professionals, including scientists and cyber-security specialists, as anywhere in Europe.