By Andy McCue, 24 January 2008 12:50
NEWS
Tech budgets are starting to feel the squeeze on the back of the credit crunch crisis and fears of a recession.
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A crash in the global markets this week caused economic panic and heightened fears the UK and other economies are heading for the toughest year for more than a decade.
Any resulting belt-tightening by organisations 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 rigour 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 reprioritise projects and maintaining a flexible budget which can be focussed 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 programmes."
Today's CIO Jury wasÂ…
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
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Comments
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1. Gary Ashworth
Unlike in the last economic downturn, where the dot.com bust led to recession, technology is one area that will be relatively untouched by the current boardroom doom-and-gloom. Over the last few years, IT has become a business necessity, integral to many organisations’ current function and future development.
Indeed it is interesting to note that demand for skilled IT workers is stronger than ever, and salaries in the industry continue to climb. Surely this is proof of the critical value of the IT sector to UK businesses? And if the suggested recession means a case of ‘survival of the fittest’, investment in technology will be key to driving efficiencies, cutting costs and powering competitive edge.