The Hindu Business Line : Gartner sees cut in IT budgets in 2009

Bangalore, Oct. 14 Research firm Gartner Inc said global economic problems could impact next year’s IT budgets while lowering growth forecast by more than half from its earlier estimates.

However, Gartner said the cut in budgets would not be as dramatic as one saw during the dotcom bust.

“In a worst-case scenario, our research indicates an IT spending increase of 2.3 per cent in 2009, down from our earlier projection of 5.8 per cent,” said Mr Peter Sondergaard, global research head, Gartner, in a statement.

“Developed economies, especially the United States and western Europe, will be worst affected, but the emerging nations will not be immune. Europe will experience negative growth in 2009, while the US and Japan will be flat,” Mr Sondergaard said. Gartner said the events of the past two weeks will have an impact on IT budgets in the fourth quarter, but it will not change 2008 substantially.

Hard to reduce

Organisations now view IT as a way to transform their businesses and adopt operating models that are much leaner. Gartner believes that IT will not see more severe reductions because IT is embedded in running all aspects of the business.

The shift to multi-year IT programmes is aligned with business and they are difficult to cut immediately. IT spending decreases lag the economy by at least two quarters, it added.

Changing roles

Gartner said the IT industry went through dramatic reductions during, and after, the recession of 2001, where the role of executives has also changed.

“We learned that in tumultuous times CEOs want their executives and managers to be advisors and counsellors, not just great implementers of directions given to them,” Mr Sondergaard said.

“What they want now most of all is agile leadership that can guide through simultaneous cost control and expansion.”

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