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IT to boost economic recovery in 2010

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14th Dec 2009
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Cost cutting may have been de rigeur last year, but this year's boardroom strategies will see IT investment driving the race towards economic recovery.

According to a recent Gartner survey, 62% of CEOs view IT as vital to their post-recession strategies, whilst 71% of respondents claimed turnover growth was a key objective in 2010. Cost-cutting proved the most important objective in last year’s survey, and it falls to the fifth most important driver over the next 12 months.

“With business leaders progressively shifting their time and attention away from the introspection of restructuring and tactical cost cutting, and back towards customer value propositions and servicing during 2010, IT leaders should propose new ways in which technology can be used to support existing and new customers. They should also discuss talent-management issues and consider special provisions for key talent,” said Mark Raskino, research vice president and Gartner fellow.

Nearly a third of respondents (29%) expected a return to turnover growth, whilst 10% admitted they do not anticipate growth to occur in 2010.

"These preliminary results will help CIOs and their teams with the planning and budgeting work they are doing in the next few months,” said Raskino.

“Business leaders are gasping for growth after a long period holding their breath, and they are expecting to increase the importance of IT in their post-recession approach. It is critical that CIOs review business leaders’ rapidly changing tactical business priorities and often unstated new expectations of where IT can help as the economy turns. CIOs are in a good position to have that conversion right now. They should also take advantage of business leader’s relatively positive attitude towards IT investment during budget negotiations.”

Going for growth
Backing up CEO claims of IT’s importance in 2010, is news that 43% of respondents will increase the level of IT investment next year, with a further 45% maintaining 2009 levels. Just 13% of respondents admitted they’d decrease IT spending next year. Raskino commented positively: “These findings reinforce Gartner’s IT spending forecast of 3.3% growth in 2010. With this warm attitude to IT, CIOs should stand their ground if peers attempt to gain investment share at IT’s expense.”

The survey also found CEOs and executives are expecting only low growth in 2010; out of the 49% of respondents expecting a level of core-business growth, half predicted growth of less than 5%, with three-quarters expecting it to be less than 10%. “This further suggests very few business leaders are anticipating any sort of V-shaped recovery, and business volumes will not recover quickly,” said Raskino. “With the expectation of a modest rise in business activity, CIOs should control infrastructure investments accordingly.”

He added: “Now is the time for CIOs and their teams to help power economic recovery and make a major contribution to the future prosperity of their businesses.”

For more on this story, see our sister site, FinanceWeek.co.uk.

 

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By onesys
18th Dec 2009 20:36

Need to Repair the Flaws Exposed by the Recession

Although this Gartner survey was based on feedback from larger organisations, small and mid-sized businesses will have their own specific reasons for increasing investment in IT during 2010.

One reason may be the fact that when the time came to make crucial business decisions and the management team asked for the data to base their decisions on, detailed, accurate information just wasn't available, or they were overtaken by events before this data could be presented in a useable form.

Legacy and fragmented business management systems just aren't suited to crisis management. Forecasting tools may have been non-existent and very fast changing customer demand took on a whole new dimension.

Now faced with lean management structures and the loss of IT staff, businesses may decide that an intuitive, low maintenance, integrated software system or cost-effective networked PSA software add-on must be in place to provide control tools and a clear business overview before increasing customer demand puts them on the back foot again.

The real-time stock, productivity and profitability overview that these systems can give business owners, large or small, should enable them to get the most from their current resources and workforce, even when the preasure starts to mount.

CRM software (Contact Management Software) is another crucial tool that can propel a business out of recession. Before the slump many relied on loyal clients and referral business but now proactive marketing and sales campaigns can really kick-start a company's recovery.

The very flexible purchase options offered by many IT and software partners at the moment, will enable many companies to sort their problems now without it affecting their still fragile cash-flow.

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