IT departments across all industries are having to postpone big budget projects with lengthy ROIs as cash positions tighten due to the current financial crisis. However, there are some arguments as to why IT spending may actually rise in 2009.
1. Technology investments can make a difference (and a profit) for companies looking to cut recurring costs. For example, Software-as-a-Service or SaaS (download the 4Q 2008 RedChip Review for a complete explanation and analysis on this emerging technology) allows companies to avoid making hardware purchases and upgrades such as servers, CRM and DMS applications, and database installations while improving workers’ productivity and efficiency.
2. Staff reductions (see the U.S.’s increasing unemployment numbers) place additional demands on IT managers to find automated and practical solutions. Tools that take on routine IT procedures will help free up IT directors to focus on more important big-picture problems including how to leverage their IT infrastructure to aide the company’s bottom line.
3. Competitive advantages often rely on a business strategy supported by a well-implemented IT infrastructure. As competition increases and fights to grab additional revenues heat up, companies need to distinguish themselves from their peers. Economic slowdowns can be death to an antiquated business which will have many CEOs trying to get up to speed or stay ahead of the curve.
One of IT’s biggest players, Cisco Systems Inc., recently stated the networking vendor’s IT spending will increase 10% next year, regardless of how the economy fairs.
I see IT spending focused on several areas over the next 2 years: business intelligence, server and application virtualization, cloud computing, off-site storage and backup technologies, and social networking. Oh ya and how about accounting software to be sure that your business is getting every penny it is owed.
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