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IT Spending Hits a Wall, Injuries Expected

 
 
 
 
 
 
 
 

"IT spending projections for 1st Quarter 2009 are abysmal - the worst ever for a ChangeWave survey dating back to 2001. An unprecedented 45% of respondents say their company's IT spending will decrease (or there will be no spending at all) in the 1st Quarter - 16-pts worse than our previous survey."

Well, that's not very cheerful. Neither is the headline, "A historic collapse in U.S. corporate IT spending."

Companies are spending on smart phones, but not much else. They're paring back not just on projections, but on spending for the current quarter.

 
 
 
 

5 Comments for "IT Spending Hits a Wall, Injuries Expected"

  • Chris November 26, 2008 7:15 pm

    In my company, we're being asked to reduce spending while we can, but to continue to buy hardware / software to support manufacturing and development projects. While spending may level off or decrease slightly, there is no desire to cut back entirely right now. Too much of our manufacturing relies on detailed records of processes / materials / personnel.

  • Charlie November 26, 2008 2:54 pm

    This is a time for the leadership in IT to provide significant value to the CEO. It is a time to dislay your business acumen and savvy. Spending on IT is a function of the condition and vision of the company. IT investment should be intensely reviewed in terms of CEO/CFO endorsed business plans and spending levels. IT exists in varying degrees of maturity and capability. I recommend creating a risk model with attributes and measurements that are relevant to the company, it's business and the 12-24 months objectives in light of the economic realities, maturity of IT capabilities and resource constraints. Create a renewed executive paticipation and alignment as shareholders in the IT governance process. Make IT completely transparent. For some companies this is a time to take market share from competitors, potentially increase revenue or at least create greater customer awareness and company affinity. For others, it is a time of retrenchment protecting the existing asset base, minimize market decay and reduce costs intelligently while preparing for the eventual upturn. For some it is a time to balance both prospects. As major initiatives get postponed the change in focus provides a break to optimize the remaining workforce by executing a plan against outstanding maintenance work and high impact, low capital cost projects. If the feedback from your people is that they can't even maintain the status quo that should be a key indicator of areas to improve. These types of projects should be evaluated to improve structural costs, increase efficiencies in business process and provide added, possibly unexpected customer value. Invest in training the existing staff to improve morale. The payback should be the freeing of capital and people to take on more strategic work in the future. No one can call the bottom of the macro trend but you can impact the micro economics of your specific company. The net spend may be minimal but the long term preparedness is priceless.

  • doug November 26, 2008 1:06 pm

    I tend to agree with Danny that you gotta spend a little to save a lot. Smart investments in things like virtualization and document management technology can have quick and significant ROI. Regarding Joe's comments on re-packaged garbage, we all can read between those words and most would agree that rushing to market and trying to shove an unbaked cake down the buyers throat just makes them suspicious of all technology. Thanks to MS Wonders for that and for its role in casting out the evil word "problem" from the English language and retreading the word "issue" to replace it. Personal pet peeve of mine and I demand our support people call a problem a problem and an issue an issue. The two are not synonymous. I think the practice contributes to a disdain for technology and the attitude that technology is worthless.

  • joe November 26, 2008 9:52 am

    I'm not surprised spending is being cut down. First, there is absolutely no reason to spend on any products out there. Most are bloated re-packaged garbage that is seldom used. Some, a famous "outasight" OS, is a useless anvil on any organization. Second, there is no reason to spend on technology because there are still too many users using older technology. New technology will only create more spending and accomplish very little that should have been accomplished before. Users were being forced into upgrades and newer releases when there was no need for them. that's my take on this bit of good news. joe

  • Danny November 26, 2008 8:55 am

    Not sure who they were talking to, but right now is for IT to shine. We are the ones who will streamline and save the company a ton of money. Our IT spending will increase this year and we already have enough work booked to keep us busy through 2009 if we don't even land one other job. There is always a shortage on great IT people.

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