Recession fears squeeze tech budgets
Summary
Topics
Any resulting belt-tightening by organizations will usually hit the IT budget first and half of IT chiefs on silicon.com's 12-strong weekly CIO Jury panel said they are already planning for tech spending cuts or changes because of the current economic climate.
Analyst IDC also predicts the US economic downturn will hit global technology spending next year, with growth rates down from about seven per cent in 2007 to six per cent in 2008.
David Suthers, CIO for Masterlease, said: "Along with increased rigor on all investment decisions (i.e. can we defer non-essential hardware spend) the existing investment portfolio is, quite rightly, being refocused around strategic growth and revenue generation."
For others spending cuts aren't yet biting but are looming on the horizon.
Sue Yoe, director of technology, information and facilities for UK payment industry body Apacs, said: "We are keeping in mind the potential need to reprioritize projects and maintaining a flexible budget which can be focused on different strands of activity."
But the credit crunch isn't yet hitting tech budgets across the board, with reducing operational costs now a constant feature for most IT departments.
Kevin Fitzpatrick, European CIO for Sodexho, said: "We are expected to reduce 'like for like' operating costs each year anyway so nothing extra--yet."
Ric Francis, executive director of operations at the Post Office, said: "Once again we will attempt to take a further reduction in business-as-usual costs (non discretionary) with a strong focus on investment in the improvement programs."
Today's CIO Jury was…
Bill Ashworth, IT director, Countrywide Surveyors
Ian Auger, IT director, ITN
Alastair Behenna, CIO, Harvey Nash
Chris Clements, IS director, RM
Kevin Fitzpatrick, European CIO, Sodexho
Ric Francis, executive director of operations, The Post Office
Paul Haley, IT director, University of Aberdeen
Tony Johnson, IT director, Navvi Entertainment Group
Jacques Rene, CTO, Ascend
Richard Storey, head of IT solutions delivery, Guy's & St Thomas' Hospital
David Suthers, CIO, Masterlease
Sue Yoe, director of technology, information and facilities, Apacs
Talkback Most Recent of 7 Talkback(s)
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Wouldn't Be In A Recession
If a certain clown wasn't in the White House spending our money left and right searching for WMDs.
itanalyst28th Jan 2008 -
EXCUSE ME?!?!
I believe you mean clownS!!! He might be the lead clown, but without all the other jack@55s up there, he wouldn't be able to do NEARLY the damage he has done. So basically I am agreeing with you LOUDLY!....
All hail the new king, same as the old king!!!
ben_scribner@...28th Jan 2008 -
I Concur...Sadly I Concur....
But the emporer does look good in his shiny new clothes, doesn't he?itanalyst29th Jan 2008 -
Agree, But Wider Group of Clowns
You are right to pluralize clown into clowns. The current problem is because the current goverment believed the reports that the US had a surplus in 2000. It was not so much a surplus as a projection for a surplus. Banking on unlaid eggs, the current administration decided that the surplus be given back to the people instead of spending it to reduce the national debt.
The administration needed the help from the other branch of clowns in congress to cut tax rates on those who can afford it most and move the burden onto those who could afford it leaast- uh, in the name of fairness.
Moral of this tale- don't look to governments for solutions.
sboverie@...30th Jan 2008 -
'splain, please
How GWBush is the SOLE CAUSE of a recession in the UK?
nancyjones36507@...13th Mar 2008 -
RE: Recession fears squeeze tech budgets
Yes, in the US. But other places on the planet earth are expanding ten times faster than the US. Look over the sales report at IBM, Microsoft, HP, and Sun most growth is outside the US.
bill.gallagher@...30th Jan 2008 -
Dead on...
A US recession, even a fairly protracted one, isnt going to "crash the world markets"
Long term, the world isnt ready to survive without US consumer spending, but the conditions are nowhere near dire enough to predict that consumer spending is going away.
So many times the analysis and reaction to these normal cyclic trends mirror the overreaction and emotion that leads to them to begin with.
The rate of US consumer spending was not sustainable. House values were growing too quickly. The world actually needs a timeout. It is going to be the jobs of the economists and central banks to carefully chart the course through this period. And contrary to what the "eminently qualified" web masses believe (you know, the basement dwelling Einsteins), these guys are not "all idiots and morons". Oddly enough, PhD Nobel prize winners in economics sometimes have some clue about the market.
Out of the other side of this will come more regulation on the markets, which will then find the next scam in an unregulated area. Even with the MASSIVE subprime fallout, net growth was positive and these guys made a ton of money. Even if they end up given a huge chunk of it back in write downs, they will still come out ahead of not having taken the risk. Boom and bust and boom again is part of the normal cycle of economics.
The key for an individual (or a business really) is to learn how to insulate ones self (hint - dont have 5 figure high interest debt as a start!) so you are positioned to not only weather the storm, but even thrive in it. Every recession creates a ton of new millionaires. This time around, since most Americans these days seem to prefer to pine for a savior and complain loudly as they look for the next lawsuit, most of those millionaires will probably be overseas.
I have a bunch of middle class working friends in the UK already looking to team up and take advantage of the weak dollar and real estate slump by investing in NY real estate. Long term they will have made a GREAT investment. That is what the global economy is all about. The days of being able to sort of just drift ignorantly and blissfully through a sheltered life are long over. Unfortunately, too many Americans wear blissful ignorance like a badge of honor.
mlambert890@...30th Jan 2008
Talkback - Tell Us What You Think
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