Budget should spark channel to drive more AI and automation

The 2024 Autumn Budget made mixed reading for those concerned about the impact of National Insurance (NI) hikes and capital gains tax changes, but it should also create opportunities for the channel.

National Insurance will increase from 13.8% to 15% from April 2025, and capital gains tax also climbed from 20% to 24%, adding to the strain faced by companies looking to dispose of assets.

But those pressures, which could negatively affect customer staffing decisions, could spur a further acceleration by users towards using managed services and embracing emerging technologies.

Ross Teague, CEO of Nebula Global Services, said that NI increases would translate into more money being taken from the bottom line, and it could have an influence on small and medium-sized enterprise (SME) leaders: “That might have an impact on organisations’ abilities to issue pay rises and remunerate their employees further.” 

He added that some sectors – retail and hospitality, for example – that had been through a tough time during the pandemic would be more vulnerable to pressure, with minimum wages rising by 6.7% in April 2025.

“The increase in minimum wage, which is coming down the pipe, is going to affect that sector more, perhaps more than it would in the IT channel,” he said. “There’s some things that are going to be real challenge, in terms of how organisations can invest in more staff and how they can remunerate their staff more, because they do have these incremental costs.”

Teague said that the situation presented opportunities for the channel to plug skill gaps, provide more services and encourage customers to adopt technology that helped with some of the heavy lifting.

“In the channel, I think there are plenty of opportunities with further automation and further digitisation of organisations. Technology is the driver behind that, which plays well into the channel,” he said.

“Some of these initiatives [included in the Budget] might force the hospitality and retail sectors again to look even deeper into automation. From an IT channel perspective, that might accelerate and continue to drive opportunity around automation technologies and integration technologies, which would be good for the channel.”

Teague said that there were also opportunities to work on a more global basis to take the strain from customers beyond just the UK: “International expansion, and that doesn’t necessarily mean hiring and opening offices overseas, but perhaps trying to do more with your customers and having a greater wallet share with them and helping them on a more global capacity, [is an opportunity].

Teague said that the channel has already placed itself behind automation and artificial intelligence (AI), and the need for those technologies will accelerate.

“From a simplifying their supply chain, to delivering a more end-to-end suite of services for them over a wider geographical footprint – I believe that is that is an opportunity. The shift of transformation and automation-type technologies and the move towards AI and how that’s going to help business and individuals, there’s a lot of opportunity to do that.”

He added that the Budget could provoke some introspection about direction and where the channel could make an impact: “How can I perhaps impact some of the challenges and wider market forces as well? They’re not just exclusively this Budget – driving greater automation, greater transformation, as well as trying to do more of the things for my customers over a wider geographical footprint.”